Taking the intelligent route to solving the loss protection problem
Adopting an intelligence-led approach to loss prevention, by utilising data from across its business, has enabled B&Q to deliver six years of continuous improvements to this critical part of its operations.
Speaking ahead of his appearance at the 4th Retail Bulletin Loss Prevention Summit 2013 on 10 September Ray Palmer, head of asset protection at B&Q, says this approach is different to the traditional way of often relaying on gut reaction.
Making this strategy possible is the rich data that B&Q has access to, which gives it stock loss data down to the line-level (SKU) for each store. This enables it to identify specifics such as organised criminal activity, issues relating to certain products, and by certain stores or geographic locations.
“We know the seven particular brands targeted by organised criminals. These are high risk, high loss lines so we have a strategy to better protect these lines,” he says, adding that this might involve having conversations with the suppliers to change how the goods are packaged or require some action by B&Q in how they are presented in its stores.
Never Miss a Retail Update!This valuable knowledge from its data helps the company determine whether lost items are down to theft or inaccuracies in the master data, incorrect sizes being delivered to the store, or incorrectly picked goods from the warehouse that have been then delivered to the store. “It can be very muddy determining whether it has been down to theft but it has become more transparent,” Palmer suggests.
Addressing the non-theft aspect of loss prevention has involved improving the logistics functions at B&Q, which has given the manager in-store greater much confidence in the stock accuracy when they receive goods at their store.
B&Q has also utilised its line-level data to work closely with its top 10 suppliers to construct action plans around loss prevention as the rich information gives it visibility on the “what and how” of goods lost, which enables a plan to be constructed to improve the situation.
“This could involve the changing the packaging of goods, improving the returns mechanism or changing poor customer instructions that lead to damaged goods,” says Palmer, who adds that loss prevention solutions are determined centrally and then fed out to the retailer’s 365 stores so there is no wastage of resources.
By taking the intelligence-led route Palmer says: “The level of gut reaction to loss prevention has been reduced, although it will not ever disappear, which is better than procrastination.”
He adds that if you put the energy in to addressing loss prevention then it’s a “free quid”. Palmer explains: “In today’s shrinking market you either take more money, get better terms from suppliers, or you address your [stock loss] gremlins. You need to do the first two but for every pound saved on shrinkage it is a pound of profit.”
Hear the latest loss prevention strategies and network with like-minded peers at this interactive event. Click here for programme details and registration.
