The Bunker Blog

These tough economic times create real challenges for all of us in the loss prevention industry. Many retailers are closing doors, meaning lost jobs, including loss prevention jobs. Those in the industry who are still working are, in most cases, being asked to do more with less.

With retailers looking to cut costs, loss prevention programs can be viewed as non-essential, and therefore be either cut back or altogether cut from the budget. Retailers are looking to save money where ever possible, and loss prevention is in a position to either show real savings through shrink reduction or face cutbacks in many cases.

One would think that the increase in criminal activity against retailers would secure a position for loss prevention professionals at every retailer, but this may not be the case.

SecurityInfoWatch.com posted an article by Mark Doyle of Jack Hayes, Intl today that summarizes the latest Annual Retail Theft Survey. Not surprisingly, the survey found that overall apprehensions were up 10.8% over 2006, and recoveries were up 9.73%. What was surprising was that the average case value was actually slightly down, at -0.33%.

According to a survey conduct by Aberdeen Research back in October 07, 60% of retailers reported shrink of 1.75% or more for that year. And friends, that’s where the real bang for the buck exists. Having an increase in cases is great, and indeed does help to reduce shrink. But if the shrink percent is high, then something is not working.

This same survey also found that retailers see four major challenges when it comes to their shrink reduction strategies. They are listed below in order of importance:

1. Lack of Employee Training On Loss Prevention Procedures
2. High Incidence of Internal Theft
3. Store Location Demographics (Crime Rates, etc.)
4. Organized Retail Crime

You’ll notice that the top challenge or concern is training. If associate awareness is low, shrink will be high. Loss Prevention must go beyond the weekly meetings and become intimately involved in the LP training in stores. That means one on one, personal training of key employees who will pass along the information and help to build a culture of awareness.

Next on the list is Internal Theft. Since 40 – 50% of shrink is attributed to employee theft or fraud, it only makes sense to put the investigative focus in this area. Shoplifters are a problem, but not THE problem in most locations. The biggest issue employers face when it comes to losses is the fact that up to 30% of their employees are stealing from them at any given time.

Store location issues are a tough problem. I recommend regular risk assessments. That means going to the local police department and requesting property crime statistics. For about $10.00, you get a great deal of information that, along with your specific shrink results, will help you customize your strategy for shrink reduction. I also recommend networking with other local Loss Prevention departments and sharing information about habitual offenders, high theft items, etc. Together, this information can really make a difference in how you protect your merchandise.

Finally, retailers are concerned about organized retail crime. There seems to be some debate in loss prevention circles as to just how much of a problem this is. On one hand, there are those who maintain that ORC is a huge contributor to retail shrink, and that the answer is to work with law enforcement to go after the leaders.

On the other hand, there are those who argue that, if proper training, awareness, and protection standards are in place, ORC is a minimal issue because the boosters are being stopped before they can seriously impact shrink.

Both sides make good arguments, and I think it will take some time before we see which approach makes the biggest impact on the problem.

So, loss prevention professionals face tough challenges in tough economic times. My goal here is to share the “big picture” concerns of retailers in general so that LP professionals can manage their workload and focus to make the biggest impact possible on the shrink in their stores, markets, etc.

But we also have to be keenly aware of what our companies’ specific goals, challenges, and concerns are. At the end of the day, it’s about the shrink. If you catch 1000 shoplifters and dishonest employees, but your shrink remains high and unchanged, then the focus needs to be re-assessed.

So, how about it? Do you agree? Disagree? Want to add your own thoughts? Please leave a comment so we can discuss.

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Recently, I was invited to take a look at LPCommunity.com, a new loss prevention website aimed at career development and training for loss prevention professionals. I wrote an article about it earlier this year. As I began to explore this site, I soon realized something: These guys are providing a valuable service that I wish I had 10 years ago when I jumped from specialty security to loss prevention. This site is a rare find in that it is very informative and entertaining, very easy to navigate, and it provides information that is valuable and pertinent to all levels of loss prevention, from the in-store agent to the VP.

There are other good Loss Prevention sites out there, but many of them offer information that is so high-level that they miss the bigger audience: the field agents, etc. Others appear to be more like an online advertisement for every new technology coming and going. Then there are those that, although well intentioned, are still using very old technologies, are hard to navigate, and honestly, have become more of an insult to the profession than anything else.

LPCommunity.com is different. It is easily navigated, looks great, and provides honest to goodness training in several formats including video, audio, and written. I have to say I’m impressed. So, I reached out to Barry McDonnell, founder and president of LPCommunity.com, and asked if he would be interested in answering a few questions for an interview here on Joe’s Bunker.  Barry graciously agreed, and below is the entire interview.

I encourage all loss prevention professionals to visit and join LPCommunity.com. You will definitely be impressed.

• Introduce us to your staff, including yourself. Who are the folks behind LP Community? What are their areas of expertise?

My name is Barry McDonnell, and I’m the President and founding father of LPCommunity. I’ve been in the world of Loss Prevention for almost 10 years, having started at the bottom of the barrel and worked my way up the ladder. My years have been spent at both big box & specialty retail stores, and now I find myself in a completely different arena, looking at the industry with a whole new perspective, which is both exciting and challenging. I do the majority of the work on the website, with help from a few very talented individuals, former employees and mentors, who help me with creative ideas and weekly topics. Our weekly pod cast wouldn’t be possible without my good friend, Mark Thomas, who has been in LP for over 20 years and has spent most of his career dealing with ORC.  Also, my nitpicky, English major wife makes great contributions in helping me with my writing & grammar throughout the site and on our newsletters. Matt Downey and Adam Little are the designers and engineers of the site, and we have many other colleagues that contribute ideas and help focus the direction of the site.

• What was your inspiration for LP Community? What do you see as the site’s mission?

I love Loss Prevention – the apprehensions, the interviews, and the business of LP.  When I was working with a certain specialty retailer, we had a challenge given to us during one of our meetings: If we were given the Loss Prevention VP title, how would we run things? It was a thrilling proposition and suddenly, we felt, the sky became the limit. After a day of thought, we returned and shared our laundry lists of what we could do with such power. After we all gave our presentations, the Director who assigned the challenge, Aristotle Ginarte, got up and gave us a little perspective on the situation; that no one created a business proposal, no budget was taken into account, no annual goals set, etc. Instantly I saw that I never truly addressed the challenge or question. It was a lesson I took with me as I began to form the ideas that became LPCommunity. I have been lucky enough to work under many such people who have given me valuable perspective not only in my career, but in life as well. James Neal, Chad McIntosh, Paul Paglia and many others along the way have inspired me and what I want to do with this website is create a place where wise & working perspectives and advice can be learned from those doing outstanding work within the industry – and taken advantage of by everyone in this field.

I look at the site as a career building site, but not your average bland site, filled with dry articles and flow charts – I want it to be dynamic, constantly changing, and the place people in the LP industry go to learn more about how to advance their careers, or move their careers to a different venue.

I want LPCommunity to be seen as definitive Loss Prevention website. I see it as a viable, growing, expanding resource where people can learn information from people working in the industry, w/ tools that are easily accessible, informative, and also, entertaining. I also intend for the site to remain free so anyone can find what they need to grow their LP career.

Just like any other industry, in LP there are politics and red tape that hold up progress along the way. I want to work through the politics, duck under the red tape and create a truly honest resource for people to learn from, where we can be the voice of the people in a medium and format that you just can’t get from YouTube alone, or anywhere else for that matter.

As I was doing my research on other LP sites, what I consistently found was shoddy workmanship. From glaringly ugly and outdated web design, to dry and unexciting articles, to outdated material, I was floored by the lack of choice in premium content for LP professionals.  And I have been working to change that option since! We use an almost entirely video-based format, which, as our attention spans grow smaller, is on the forefront of internet media and communication. We also have a pod cast that consists mainly of interviews with outstanding people in the industry, and we also often field calls from average LPCommunity website visitors to get their perspective on what’s happening on the site.  We also keep our site  regularly updated – at least four times a month. I would also like to take this time to compliment you on your site. Joesbunker.net is very clean, easy to navigate, updated, and full of interesting information. You have put together a fabulous website!

Well, as I mentioned, we do have a weekly pod cast with industry leader interviews, and lp topics discussed. We do plan to grow the pod cast even further. Eventually we’d like to integrate a forum of sorts as part of the site, where visitors can upload their own videos and pod casts, creating the definitive space where place where LP professionals can meet, share, and collaborate in ideas about their careers.

We have touched on ORC a little bit already, but it is definitely something I intend to return to again and again – ORC will be part of the LP industry for quite some time, it seems. We are actively pursuing information on how to best handle this type of theft and last week we presented a couple of new ways to fight it! We are also working with a few people to create a national e-mail chain, that would give you relevant information in your local area on ORC activity, and regional information on bigger cases. We hope to roll this new program out in the next few months.

We have the infer structure on the site to do this, and we will eventually expand to some sort of social forum, but right now we’re focusing on different ideas and tools for career building.

LPCommunity offers professionals a chance to see, hear, and learn from the advice and experience of industry professionals that they might not otherwise have access to. It’s a place to hear about ideas and solutions facing the problems that they are encountering on a daily basis, and it offers a new perspective on how to excel at what they are doing. It’s unlike anything else out there for LP professionals.

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