Loss prevention and the economic recovery

There's no doubt that the retail sector has been one of the hardest hit industries by the recent economic recession. Many loss prevention executives have been forced to cut payroll over the last several years and asked to do more with less resources while organized retail crime has increased.

The question of loss prevention departments and how they are going to rebound from the recession was the topic discussed by a panel of industry executives Monday at the National Retail Federation Loss Prevention Conference & Expo in Atlanta.

In his opening remarks to the audience, William Titus, vice president of loss prevention for Sears, said that companies have gotten used to their LP departments doing more with less and that moving forward, LP managers need to have a plan in place to deal with these structural changes.

"When we start coming out of this downturn, we're going to have to justify bringing these (LP programs and technologies) back," he said.

Bob Serenson, senior vice president of loss prevention for Duane Reade, said that the recession has taught LP department managers the need to show the value of their company's loss prevention program.

"How do you take wins from a shrink level and turn that into sales?" he asked.

Titus explained that loss prevention departments will also have to focus on the growing problem of external theft which has grown drastically in recent years in comparison with shrink and internal theft.

"External theft is absolutely eating us alive," Titus said, adding that necessity-type incidents of shoplifting seem to be on the rise.

Jeffrey Fulmer, vice president of loss prevention for Barnes & Noble, says that the economy has fostered an environment where people can use job loss as an excuse to shoplift. In many cases, Fulmer said these same people will continue to steal even when the economy gets better.

"These people aren't going back to the straight and narrow," he said.

One way that loss prevention professionals have been able to effectively combat shrink and retail crime during the recession is through the use of security technologies.

Keith White, senior vice president for loss prevention at Gap Inc., says that he's seen several advances in solutions for the retail sector including remote video monitoring, which has quickly become a viable tool for security managers.

"I'm really pleased with the advances in technology," he said.

White added that Gap is currently working on an intelligence platform that ties its exception reporting, CCTV and HR tools together and allows them to communicate with each other.

According to Fulmer, Barnes & Noble is also using a new display security technology, which alerts store personnel if someone removes multiple items, such as CDs or DVDs, from a rack at the same time.

Moving forward, the panelists agreed that LP departments with forward thinking leaders that can overcome various budget hurdles and the inevitable corporate culture changes brought about by the recession will be in the best shape.