EVIDENCE-BASED LP Data Analytics and Audit Research By Read Hayes, Ph.D., CPP

Data Analytics and Audit Research

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

You 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.

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

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.

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? ■ What are meaningful and actionable performance ranges? ■ Who should measure? ■ How and by whom should follow-up action be taken? ■ What 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.

Offender Research

Two retailers are working with LPRC scientists to study employee deviance, while individual shoplifting offenders are being run through a specially set up CVS/pharmacy store to learn more about tweaking the “see it, get it, fear it” components to achieve “overload” or deterrence with varying levels of shoplifter experience and motives.

Likewise, the team is working with multiple retailers and MeadWestvaco from the Packaging Innovation Working Group on enhancing deterrence via persuasive messaging, as well as more durable and less concealable packaging designs.

The Benefit Denial Working Group is also working on similar questions, along with setting up two store technology pilots to tweak anti-theft technologies that preclude product use until the item is legitimately purchased (benefit denial).

Impact Conference in October

The LPRC has put out research findings and discussed implications at Impact conferences now for the past seven years, with the 8th annual event scheduled to be hosted on the University of Florida campus in Gainesville this coming October 15 – 17. This year’s workshop and conference promises even more collaboration via numerous breakout groups, interactive sessions, and case studies, as well as networking opportunities at the opening reception and barbeque dinner at the Hayes family farm the second evening.

There will be a special panel discussion around how criminologists can and will support LP practitioners. There will also be a special interactive session on mobile POS and the digital journey to plan protective innovation research. Please email operations@LPresearch.org or visit our website, LPresearch.org, for more information.

Future Industry Talent

It is also worth mentioning to retailers and solution partners alike, that both Dr. Richard Hollinger and I are teaching some really bright students what we believe to be cutting-edge loss prevention strategies and tactics as part of their University of Florida curriculum. Incidentally, if you have not heard, Dr. Hollinger has been named the new chair of the UF Department of Sociology, Criminology and Law, which is a great honor.

Students are being exposed to real-world environments, current crime- and loss-control theory and practices, incident and offender interview video footage, and multiple site evaluations. Some of them are even taking the Loss Prevention Foundation’s LP Qualified certification program to supplement their academic studies. I would encourage both retailers and solutions providers to take a look at these students for internships and possible employment. We would also love to have industry representatives as guest speakers for these classes.

As always, I look forward to your insight, comments, and questions. Please consider getting involved with the LPRC to advance our industry. Email me at rhayes@lpresearch.org with your suggestions, comments, and questions.

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