These stores now have the honor of being named a “target” shrink store! As exciting as that sounds, no one is really honored to receive this title. Many companies have ideas about how to approach shrink reduction in the high loss stores. J. Crew has seen some great success in the reduction of inventory shrink in these locations. The key to our success has been looking at ourselves first as the leaders in shrink reduction and then educating the store with a very basic program.
First, we look at our field loss prevention staff. Do we have the right person to get the job done? As an LP professional you cannot be an individual who is a “teller.” Successful shrink reduction starts with being an “educator.” LP not only has to review the store’s opportunities but also educate the store team on the “why’s” and “what ifs” behind the policy or best practice. Knowing we have the right educator to get the job done, we then conduct an LP audit to identify any operational opportunities. The LP audit we have created focuses on everything from face saving statements and company policy knowledge to front- and back-end operations. Always remember: normally the store team wants to do the right thing, but just may not know how. Getting the buy in and support from the store team as well as other business partners will ensure a strong foundation is laid.
Second, look at the store from an outsider perspective. We have found many times that high shrink stores have a very low morale. Morale can be quickly assessed by making an unannounced visit, stepping back and seeing the interaction with our customers as well as each other. Take a walk to the associates’ break area and quickly look at how we treat our associates’ space. As they come to take a break/lunch, is the microwave clean? Is the table clean and open to sit down and have lunch? These areas may sound like simple things to look at, but having these areas well maintained shows our associate that we care about them, thus increasing morale.
Third, do a complete investigational look into the store. High shrink stores normally indicate internal theft. We always have conversations with at least 20 percent of the staff. The conversations are kept very general. These conversations many times have led to an admission of a theft, which plays a huge impact in shrink reduction. These conversations also have identified the answers we are looking for simply because we asked the right questions. We have found that store associates for the most part have a pretty good idea about what is wrong in their location. These conversations have led us to delivery theft cases where a driver delivering our merchandise was taking items, as well as to instances where the store team completely lacked understanding of our company’s policy and procedures. We also use this time to get to know the staff, developing relationships with them, so they will feel comfortable picking up the phone and letting us know if something is not right.
Follow up and testing for understanding
Once we have completed this three-prong approach, all that is left is to ensure we continue educating our store management team and testing for understanding. We do this through target store conference calls (one a quarter) and store visits. We audit our stores once a quarter as well. By auditing the store this frequently we are testing to ensure their understanding – thus ensuring success!