15 minute read
SOLUTIONS SHOWCASE
How to Protect Retail Inventory This Holiday Season
This year’s holiday shopping season is expected to be strong, according to data released by the National Retail Federation (NRF). Retail sales during November and December are forecasted to be as high as $682 billion, a 4 percent increase from last year.
The picture isn’t entirely rosy, however. The NRF’s 2017 National Retail Security Survey shows that two-thirds of LP budgets are flat or declining, and the average inventory shrink rate has increased to 1.44 percent, with 36.5 percent resulting from shoplifting and organized crime and 30 percent from employee theft. In order for retailers to make the most of the booming holiday season, they will need to find new solutions to prevent loss in stores.
With items such as baby formula, razors, and pharmaceuticals high on the list for theft and counterfeiting, retailers, consumer packaged goods companies (CPGs), and brands are beginning to collaborate to develop solutions that turn packaging into a deterrent for would-be criminals.
For example, QuadPackaging and Checkpoint Systems have joined forces to make packaging more effective as a loss prevention tool. In fact, QuadPackaging has presented the latest packaging protection for retailers trying to thwart organized retail crime and loss in-stores at recent Checkpoint-sponsored Annual National Source Tagging events.
Reliable Physical Security
For applications requiring reliable means of physical and tamper-evident security measures, consider two primary solutions—microperforations (or “microperfs”) and EAS tags. Microperfs aid in making any package tampering very evident to the retailer and the consumer, while EAS tags alert shop owners when packages leave the store without being cleared.
Microperforations. QuadPackaging understands that by adding small perforations in the carton along the carton flaps, accompanied by a simple wafer seal, consumers can be immediately alerted to any tampering with the packaging. Microperfs can be placed on the carton without disrupting the messaging or appearance of graphics, elements that are critical to brand positioning and consistency. Microperfs are built into the carton die, eliminating the need for extra steps in the production process. A potential thief attempting to remove a seal placed over a microperf will create a large tear that’s easily noticeable. Microperfing is also very effective when used with a wafer seal over the bar code of a product as the UPC can be scanned as normal.
Source Tagging with EAS Labels. EAS labels are placed either on or in a package coded with a signal that alerts personnel when a product crosses a certain barrier if the item is not first sold and deactivated at the point of sale (POS). For optimal cost and performance, these labels are applied “at source” to the package automatically during the folding and gluing production stage, eliminating the need for an extra step in the process at a distribution center or store. A complete source-to-shopper EAS solution serves to improve on-shelf availability, enhance customer shopping experiences, and increase sales.
Overt Approach. In the past, CPGs gravitated toward covert security tagging as a measure to ensure brand messaging and imagery are not compromised; however, research demonstrates that overt solutions that are visible to consumers are more effective in the fight against theft. These solutions also streamline the security process for retailers by avoiding employees confronting theft at checkout. Examples include brand authentication codes or retailer-specific messaging printed on EAS labels.
New technology is continuously being developed at QuadPackaging and Checkpoint to assist in loss prevention. Ongoing education and the ability to combine loss prevention solutions in interesting and creative ways will help brands and retailers stay ahead as organized crime gets even cleverer.
What Can Brands and Retailers Do?
QuadPackging understands that your packaging represents a critical decision point in a consumer’s experience with your brand. Providing collaborative solutions and deep expertise—and backed by one of the largest printers in the world—QuadPackaging is committed to delivering your brand in its finest form.
Checkpoint Systems provides a full range of source-to-shopper solutions that address shrink. Its intelligent retail solutions deliver a unique offering of connected hardware, applications, cloud-based software, and EAS and RFID for high-theft consumables. “At Checkpoint, we value our strategic partnership with QuadPackaging for integrated, visible EAS source tagging. We understand the importance of reducing high-theft shrink for our retailers, including improving on-shelf availability and reducing loss,” said Keith McUmber, director of source tagging at Checkpoint Systems.
The Disposition of Shoplifting Cases Confronting the Challenges and Balancing the Benefits
Once you catch a shoplifter, what do you do with them? Do you prosecute and risk the wrath of the local police department and media for creating an undue burden on the system or, in some communities, even risk monetary fines for “unfair and disproportionate use” of police resources? Do you warn and release them knowing it will not only do little to prevent a repeat offense but also likely empower them to steal again? Do you use civil demand, which also holds little promise in changing behavior? Or do you try and do what is best for all parties and offer them—with the blessing of the local police and prosecutors—an alternative, education-centric program?
In a good-faith effort to address complaints surrounding the overuse of police resources, many retailers are embracing alternative programs that offer education as a means to hold offenders accountable and reduce repeat offenses without overburdening law enforcement and other criminal-justice resources. Unfortunately, they are now facing political and legal challenges to these nontraditional but valuable options. Seemingly lost in the political and legal wrangling is the fact that such alternatives will not only relieve the “overuse of police resources” pain point but also begin to close the long-standing gaps in the current system that have led to the ongoing proliferation of retail theft.
The Gaps
In the current construct, the gaps left between apprehension, arrest, prosecution, and sentencing allow the offenders to get away with it and end up empowering them to offend again—having “learned” that the reward was worth the risk. With shrinking resources and competing priorities on the rise, those gaps continue to widen, and while the various entities bicker and blame, retail theft in all its many forms continues to thrive. In order to close those gaps—gaps that only serve to promote the growth of both shoplifting and professional or organized retail crime (ORC)—it is imperative that retailers and communities unite to battle the common enemy. It is not just the offenders we must confront but also the community complacence that leads to the acceptance and growth of retail theft.
The Game Changer
The Crime Accountability Partnership (C.A. Partnership) program is designed to marshal the forces and provide them collectively with a means to close the gaps in the system without undue time or expense for any one entity. With a keen eye to curbing the inevitable challenges that result from disrupting the status quo, the policies and procedures of the C.A. Partnership are ever evolving to meet each new challenge, mitigate any risk, and build partnerships that will indeed close
the gaps between stakeholders. Of paramount importance is the guarantee that the alternative education-based program meets the needs of all parties involved—from retailers to law enforcement to criminal justice and community—and even those of the offenders. While state law and local regulations are foremost, the C.A. Partnership ensures that law enforcement authorities in each jurisdiction have the opportunity to provide input and oversight in the execution of the program in their jurisdictions.
Supporting Retailers
Faced with competing priorities for police resources coupled with the constant barrage of offenders in their stores, retailers need a better way to handle these petty offenders. Providing an educational option for offenders who qualify and choose to participate allows them not only to examine their own behavior but also to build their competency to make better choices for themselves in the future. With juvenile offenders, the C.A. Partnership allows LP agents to turn a negative interaction with a parent—who is likely a customer—into a positive learning experience for their child.
Police resources, like so many publicly funded resources, are limited. Of late, there has been a focus on retailers’ overuse of these resources, which is ironic and unfair but nonetheless a pain point. Retailers who participate in the C.A. Partnership have successfully reduced their calls to local law enforcement by 40 to 60 percent or more and by extension have saved more than $100 million in offender-processing costs of criminal-justice resources.
Reducing Incarceration
Yes, you read that right. With a nationwide priority on reducing incarceration for low-level offenses, there is a corresponding effort to decriminalize petty crime including shoplifting. Allowing, supporting, and even legislating retailers’ use of the C.A. Partnership program to offer education to first-time offenders, especially youthful and young adult offenders, is a far better option to address shoplifting than decriminalization—either outright or de facto. Education is a first line of defense in the fight to keep young people—for whom shoplifting is often their first foray into criminal behavior—from entering the criminal justice system. The C.A. Partnership uses the National Association for Shoplifting Prevention’s (NASP) Y.E.S. Program for Youth, which is proven not only to reduce shoplifting among youth but also to reduce their involvement in juvenile crime in general—a clear benefit to any community and its youth.
Stopping the Revolving Door
Even with all the benefits to the various stakeholders, such a program cannot become a revolving door for offenders. The C.A. Partnership is a one-time chance for everyone to choose to take civil responsibility for their actions. To ensure this, Turning Point Justice’s (TPJ) technology provides a means to begin to track repeat offenders across retailers and jurisdictions providing an invaluable intelligence and investigative tool for ORC and police investigators alike.
Stemming the Tide
A collaboration between NASP and TPJ, the Crime Accountability Partnership is an innovative yet collaborative solution to address the age-old shoplifting problem that, even with the most sophisticated measures in place, continues to grow and evolve. While there will always be ebb and flow of shoplifting in our nation, education and accountability offer the best promise to stem the tide of retail-theft offenders. Reducing repeat offenses provides everyone with the opportunity to focus more resources on identifying and tracking those who are indeed professional offenders yet, in the current system, are falling through the gaps and flying under the ORC radar.
Offered free of charge to retailers and their law enforcement partners, the Crime Accountability Partnership program is truly a partnership and a collaboration in which no single entity’s priorities trump another’s and one in which all entities contribute effort and reap benefit in equal measure. This is the future of truly effective shoplifting prevention.
Industry Innovation Continues Protos Security Unveils New Technology to Incentivize Better Guard Vendor Performance
In this day and age, it takes real change and thoughtful disruptive innovation to lead an industry forward. We’ve seen it with Apple and Tesla, and in the loss prevention industry, we’ve seen it with Protos Security.
Over the last eleven years, Protos Security has revolutionized security guard management, saving retail companies of all sizes from the traditional headache of manual processes, continuous audits, and lots of last-minute scrambling. Its end-to-end security guard management ecosystem drives measurable direct and indirect cost savings for clients all across North America.
“The Protos team lives and breathes innovation. We understand how technology can empower companies and benefit their bottom lines,” said Kris Vece, LPQ, director of client relations for Protos. “Even before I joined Protos in 2015, I watched what they were doing and decided I wanted to be a part of it. The last two years have easily been some of the most exciting in my career. The Protos team has created a cutting-edge, cloud-based management platform, increased transparency, and enforced a ‘no punch, no pay’ policy to ensure accounting accuracy for LP professionals tired of finding overpayments and having to manage the invoice reconciliation process.”
Owner and cofounder Patrick Henderson said, “Our system uses a variety of techniques that have been successfully deployed in supply chain, logistics, and other service industries. We reworked the tools and operating models to fit a loss prevention scenario. We help connect the dots and benchmark performance, so everyone knows what they are getting and can quickly and easily change behavior as needed to get the results they seek.”
“After all, you can’t manage what you can’t measure,” Vece added.
“Despite the technology’s reputation for success, when we meet with prospective new clients, we still get asked, ‘How do you manage guards that aren’t on your payroll?’” Chris Copenhaver, Protos owner and cofounder said. “And people are always so surprised when we explain our tools, technology, and methods. They’re always like, ‘Wow, why didn’t someone think of this sooner?’” Using technology to operate a series of clear, easy-to-read user interfaces that can be accessed from desktop, laptop, tablet, or phone, Protos Security helps clients, vendors, and their own quality-assurance specialists to communicate and manage security guard performance. The Protos team built their system from the ground up and, in the process, created a methodology and culture that supports consistent and measurable program success. From introducing instantaneous and fully customizable alert notifications to vendor KPI dashboards, Protos has rewritten the rules on what it takes to run a modern LP shop. Unlike its competitors, Protos does not sell technology as an add-on
The Protos Vendor Portal The newest addition to the service or up-sell solution. Its Protos management ecosystem high-tech tools are “baked in.”
At its core, Protos is a technology company that is working to solve loss prevention industry challenges, the same way Apple taught the world to “think different.” Many of Protos’s offerings are revolutionary, saving clients countless hours and measurable budget percentages immediately upon rollout, but many of its advancements are just the obvious next steps in a world dominated by automation, big data, and higher management expectations.
“To us, it didn’t seem revolutionary for clients to be notified when an officer was late or to relay important incident details near real time,” Copenhaver said. “In today’s day and age, it was a question of simple automation, and it seemed inevitable. So that’s what we set out to do. We just wanted to make program transparency a reality. It was already an expectation in other industries, and we wanted to see the loss prevention world catch up.” What More Can Be Done?
While Protos has been offering performance-benchmarking tools to clients for many years, first for internal monitoring and then for client transparency and reporting, it hasn’t stopped moving things forward. For example, by the end of the year, it will release a vendor portal that allows independent guard vendors to see the performance trends on each of their Protos assignments.
This access will allow guard vendors to compare their delivery to industry standards and benchmarks and manage to customer expectations in real time. This access empowers them to deliver quick and necessary course-correcting actions before it hurts their companies’ reputations.
Protos, of course, is always monitoring these performance trends and filling client assignments with vendors who are engaged and responsive and provide consistently high-quality service.
“There is real incentive for guard vendors to be a part of the Protos Approved Guard Network,” Copenhaver said. “We’ve proven that a good vendor can grow their business faster with us than they could on their own.”
The Bottom Line Protos has earned an exceptional reputation for having security officers successfully engage with a common timekeeping and integrated invoicing system. Its reporting procedures have cleaned up LP budgets industry-wide and increased situational awareness from coast to coast. The Protos team lives and breathes “I no longer must call stores to ask if an officer is on-site. I can check in to see if a guard innovation. We is on-site from my cell phone. understand how technology can I also get real-time incident reports from Protos,” customer Eric Williams, loss prevention empower companies and beneft their manager at the City Gear store support center said. “When it comes to billing, Protos gave me bottom lines. at least two days a month back.” “There was a lot of concern Kris Vece, LPQ around how to seamlessly Protos Security transition to another guard Director of company. We were expecting Client Relations bumps in the road during the first couple of months of the transition and were pleasantly surprised that we received nothing but positive feedback,” said Andrea Quinn, Staples senior manager of global loss prevention. “Protos has made every aspect of managing guard service so much easier, and we could not be happier with our decision to transition to Protos six months ago.” So from coast to coast, customers are already happy, but if the leadership team at Protos Security has their way, this is really just the beginning. “Stay tuned; there is no way we are done innovating,” Vece said. “I am personally excited for what comes next. Hold on tight; the ride’s not over yet.” For more information on Protos Security, visit their website at protossecurity.com.
No Punch, No Pay
“We’ve always had a ‘no punch, no pay’ policy, and that has served us well, but now we’re focused on what’s next. What else can we do?” Henderson said. “The hope is to get each individual guard vendor management team more involved and more active in addressing any quality issues.”
Protos has led the industry in technology innovation, guard vendor engagement, and client service since it pounced on the scene in 2006. The company claims to save clients’ money and pay their vendors much faster than industry average. Their stunning growth continues to prove they are doing something right.
