EVIDENCE-BASED LP
Data Analytics and Audit Research Y
ou walk into your favorite doctor’s office for your annual physical. You and your doctor both want to see how you’re doing and check for any upcoming issues. So, what does your physician check and why? It’s pretty simple. Neither of you have the time or resources for every single body part or function to be examined, only the most important, the most likely, the most relevant. This should sound eerily similar to conducting store and distribution center audits. Nobody has the time or resources to check everything. Best practices probably dictate that you focus on the most meaningful measures of the most likely and harmful problems. But there’s often a huge gulf between what your doctor has to work with to guide efficient diagnoses versus what the LP practitioner has. As I’ve mentioned many times, physicians are largely evidence-based experts. They practice medicine based on a ton of research. They tend to measure (for diagnosis) just what the preponderance of the relevant theory and evidence indicates. They then discard the rest. And, they look for fact-based, meaningful levels in the most critical measurements.
When conducting store and distribution center audits, nobody has the time or resources to check everything. Best practices probably dictate that you focus on the most meaningful measures of the most likely and harmful problems. For example, if they’re monitoring heart performance, they’ll probably be looking at resting heart rate, blood pressure, body mass index, family history, smoking, inflammation, exercise, and stress levels, as well as blood fat, cholesterol, and sugar levels. They look at these or other metrics because multiple rigorous research studies indicate that they should do so. But most important here, based on research, and the current patient’s profile, they’ll be looking for specific ranges of those metrics. Most
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by Read Hayes, Ph.D., CPP Dr. Hayes is director of the Loss Prevention Research Council and coordinator of the Loss Prevention Research Team at the University of Florida. He can be reached at 321-303-6193 or via email at rhayes@lpresearch.org. © 2012 Loss Prevention Research Council
retailers haven’t yet come close to this type of precision. Therein lays our industry’s opportunity.
Audit and Performance Management R&D
Research across chains and multiple stores over time, combined with field experiments, will provide practitioners with more precise information on the most efficient and meaningful measures and ranges to include in ongoing data analytics and audits. The industry associations as well as the Loss Prevention Research Council (LPRC) among others are working to greatly refine diagnostic and treatment measures to achieve this end. The process will take a while, and needs to be exhaustive, but should prove powerful. Here are just some of the audit questions the LPRC’s Predictive Analytics Working Group…a retailer-led coalition…is working: ■ What should really be measured? ■ Why should this be measured? ■ How and how often should it be measured? ■W hat are meaningful and actionable performance ranges? ■ Who should measure? ■ How and by whom should follow-up action be taken? ■W hat performance rewards and consequences provide the best impact? This working group is using sophisticated data analyses to help determine the best answers to some of these questions and others.
Action Teams
In the March-April issue (page 56), I mentioned the currently forming action teams. The Sporting Goods Action Team is the first action team to come together, with initial members Cabela’s, Dick’s Sporting Goods, Walmart, and Gander Mountain setting objectives, deliverables, process, timing, and resource needs. The group is also reaching out to recruit other sporting goods retailers into the group. The team is initially planning to conduct firearms/ ammunition protection and selling innovation and evaluation before moving on to other priorities. Other action teams are in the process of forming: ■ Auto parts chains Pep Boys, Advance Auto, and AutoZone are working on their group. ■ Chad McIntosh of Bloomingdale’s is leading department stores, lease department manufacturers, and mall-based chains. ■ Brian Bazer of Dress Barn is forming an apparel retail team.
July - August 2012 | LPportal.com
