ECR Retail Loss

Enabling the Retail Sector to Sell More and Lose Less

Security Guards: Exploring innovations in the retail guarding model

Retailers spend millions, and some hundreds of millions on security guards. In our mini benchmark study, 81% of the thirty six retailers who responded shared that their budget for guards will increase and at least, stay the same over the next 12-18 months. Yet retailers remain agitated about the role security guards play, and troubled by the difficulty in being able to accurately determine their return on investment. Each year, we get a chance as a working group to hear from the retailers in the group and over 120 registered for this years meeting to swap notes and hear new ideas from their peers. The full recording is available to retailers, if this is of interest, please send email to colin@ecrloss.com but in the meantime, please see below three of the topics we discussed and then a short video recap of the meeting with Professor Adrian Beck. #1: Guards Vs Extra Store Associate Hours in Convenience Format? Ask 100 convenience store managers whether they would prefer additional store associate labour hours or a security guard to help them reduce shrink, and you are likely to get an even split, it's not at all obvious to many store managers that security guards are the right first choice when resources are limited. To test which of these choices delivered the better return on investment, one of the retailers in the group ran a trial in one hundred store and shared on the call their findings. And the results proved that for this retailer, the gain in losses and sales did not cover the additional cost of the store associate hours, however the results from the extra security guard investment did, proving that delivering cover from opening to closing, lead to a gain in sales and loss that was greater than the cost of the the additional guarding hours. Who knew that security guards grew sales? :) #2: Community Guards. In a breakthrough programme, Whole Foods USA retailer shared how they had moved from using armed security guards in uniforms in cities such as Chicago, to using plain clothed community guards in these very high risk stores. To deliver this community guarding programme, Whole Foods partnered with a charity called "We Push for Peace" who support communities with mental health assessments and supporting resources, employment assistance (resume development, mock interviews, job placement) and pre-employment training (various workshops, skills training) Their store based Community outreach guards focus on building up a rapport with the most prolific offenders, individuals that are in the most need of help. Over time the guards are able to build the trust that is needed with those most in need of the help to the point where they ask for and accept help. They act as a visible deterrent to theft, violence, and business disruption, with their guards trained in violence prevention and de-escalation techniques to provide a safer working and shopping environment. This community guarding programme is now operating in seven states in USA, with over 150 guards. The Whole Foods team presenting the case study shared in the meeting how this programme has helped those stores be and feel safer for their customers, with stores reporting lower shrink numbers. #3: The Evergreen Dilemma: Internal or Third Party Guards In the mini benchmark survey, 85% of the retailers shared that they were using third parties, so it was refreshing to hear from a retailer who was using their own internal guards. Presenting their case, the retailer shared the many benefits that their business saw in the in-house model but they also shared the limitations, which were becoming more apparent as their business changed, from just one store format, to now multiple formats, including convenience stores. Whether the retailer was using their own or third party guards, we asked them about metrics did they use to inform their cost benefit equations. Non Financial measures were #1 & 3. See chart. There was discussion as to whether retailers should explore additional metrics, for example, if store associates did feel safer, did it lead to fewer leaving the business, and if so, what were the cost savings from not having to rehire and train new store associates as often? We will catch up with this dilemma again in 2025. See below the interview with Professor Adrian Beck who shared his key takeaways from the meeting.

2024 Retail Risk, Security and Safety Innovation Challenge

We are excited to announce the launch of the 2024 Retail Risk, Security and Safety Challenge and a search new ways and technologies to solve for retailers most pressing risk, security, and safety problems. In advance, we had a chance to interview the heads of security, safety and risk at five leading retail organisations, namely Walmart, Tesco, Aholddelhaize, Carrefour and S Group. This has helped us focus on finding innovations in People, Product, Process and Property. If you are an innovator with new ideas on how your technology can solve for the briefs below, please email Colin Peacock @colin@ecrloss.com 1) People Protection Objective: Ensure colleague safety through integrated, innovative technology and comprehensive training programs. Body-Worn Cameras: What's new in body camera technology that can help monitor interactions, deter aggressive behaviour, and provide clear evidence for prosecutions. Enhance with integration capabilities to connect with headsets, radios, and panic alarms. Lone Worker and Real-Time Protection: What can be some new wearable panic alarms and real-time communication systems to support colleagues during incidents, ensuring immediate assistance and guidance. Behavioural Training and Education: How can new technology help expand the use of AR/VR immersive training simulations to provide realistic, engaging training experiences. And help make training more accessible through continuous learning platforms and regular updates. Biometrics: New ways to implement biometric solutions, with multiple attempts, to enhance security and access control. Violence Innovation: Exploring innovative solutions to address violence in the workplace. Panic Alarms: New wearable panic alarms for employees to signal distress and alert security in real-time. Connection of Technologies: New ways to more seamlessly integrate of technologies to enhance communication and response during security incidents. Training Academy: New ways to deliver a comprehensive training academy to educate employees on safety protocols and procedures. AR/VR Immersive Training: New ways to utilise AR/VR technology for immersive training simulations to prepare employees for real-life scenarios. Dotcom Driver Safety: New safety measures and training programs for dotcom drivers to ensure their protection during deliveries. 2. Product Protection Objective: Safeguard products through advanced tracking technologies, real-time monitoring, and behavioural insights. Product ID, RFID & Visibility: New Product ID and RFID technologies to enhance inventory management, providing real-time tracking and visibility of products. Biometrics and Item Recognition: New biometric technologies and live AI for real-time product and facial recognition to monitor and prevent theft, especially for high-value items. Real-Time Detection: Innovate in real-time detection technologies to prevent shoplifting, with AI-enabled CCTV and analytics to identify suspicious behaviours, such as loitering or excessive product handling. Root Cause Analysis: New technologies and ways to identify root cause analysis to address behavioural factors leading to product loss, such as improper equipment use or procedural lapses. Shelf Moves vs Shelf Protectors: New technologies and measures to prevent product theft, such as shelf protectors and strategic shelf arrangements. Item Recognition: New technologies to recognise specific items and detect anomalies in their handling or movement. Cargo Theft Prevention: New advanced tracking and monitoring solutions from industries like pharmaceuticals to prevent cargo theft, especially for high-value items like tobacco. 3. Process Protection Objective: Secure payment and transaction processes with advanced fraud detection, real-time alerts, and behavioural strategies. Payment Protection: New technologies to enhance security for cash and credit card transactions with AI-driven fraud detection systems, focusing on real-time identification of suspicious activities. Customer Transaction Security: New technologies to protect against online and in-store fraud, including account takeovers, refund fraud, and gift card scams. Address emerging trends like catfishing. Fraud and Loss Reporting: New AI-driven solutions to streamline the reporting and handling of fraud-related incidents, integrating data from various sources for comprehensive insights. Behavioural Insights: New service providers for educational programs for customers and staff to understand and mitigate the impact of fraudulent activities, encouraging responsible behaviour. Hub Team Fraud Response: New ways to help scaled a specialised team to respond to fraud and payment issues, leveraging data analytics and CCTV footage for investigation. Gas / Petrol Station Security: New technology responses to prevent drive-offs and other theft incidents at petrol stations. Self-Checkout Optimisation: New technologies for the self checkout to detect non scanning, ticket switching and other forms of fraud. Waste Recording vs Theft: Easier, faster and less expensive technologies to more accurately record damaged, spoiled and expired products. Product Loss / Shrinkage Analysis: New data lead approaches to help analyse loss / shrinkage data to identify patterns and develop strategies for reducing product loss. Stock Taking: New technologies and methods to the stock take processes that can improve accuracy and identify discrepancies more efficiently. Data Governance: New ways to ensure proper governance of data to maintain data integrity and security across all processes. Pricing Operations: New ways to help response teams handle legal and pricing operations, ensuring compliance with regulations and internal policies. 4. Property Protection Objective: Secure physical premises against theft, environmental hazards, and unauthorized access through advanced technology and behavioural insights. Perimeter Protection: New, faster, better, cheaper, etc, advanced surveillance technologies, including AI-enhanced CCTV, infrared cameras, and motion detectors, to detect and respond to intrusions effectively. Cash Handling: New, more secure cash handling systems that protect against tampering, ensuring safe transport and storage of cash. Access Control and Biometrics: New technologies to enhance access control with mobile devices and biometric solutions, ensuring secure entry to restricted areas while addressing behavioral resistance to change. Environmental Risk Management: New technologies and approaches to identify and then mitigate risks from natural disasters, such as floods and fires, with a focus on preparedness and behavioural response strategies. ANPR and Facial Recognition: New technology enhancements in ANPR and facial recognition technology for car park and perimeter security, enhancing asset protection. Real-Time Alerts and Monitoring: New technology to support real-time alert systems and live monitoring capabilities to enable rapid response to security incidents before they get a chance to escalate and lead to loss Physical Security Solutions: New physical security solutions such as door access systems, bollards, and security bars to deter intruders and protect assets. Response and Field Teams: New ways for business to deliver response teams to investigate incidents and follow up with corrective actions, ensuring compliance with security protocols. Collaboration with Authorities: New technologies that will help business's work more closely with law enforcement agencies and national business crime units to address security threats and share intelligence.

OSA: What if Toyota Managed Retail Replenishment?

The Toyota Production System revolutionised quality management in car manufacturing, establishing Toyota cars as a market leader. Their system that sought to remove waste, such as inventory, was initially inspired by supermarket retailing. In this meeting, attended by over 70 retailers, we posed the question, what would Toyota do to improve retailers replenishment system? A full recap of the discussion with Dr Paul Chapman is below, here though are three takeaways for retailers. #1: They would drain the back room! A recent study on where inventory could be found in the store revealed that just over 21% of the inventory could be found in the back room, which went up to nearly 39% on frozen food. The study also showed that around 12% of the inventory that was in the back room was NOT on the shop floor (NOSF) , this metric rose to 25% with frozen. Anyone who has had the job of filling the frozen category in store will recognise these numbers and the difficult task of finding items missing on the shelf in the back room in a category where the inventory arrives from the DC in brown boxes, where the space in the back room for frozen is limited, dark and cold! Exploring the data more deeply using R2 analysis, there was a very strong relationship identified between the quantity of inventory in the back room and the quantity that was not to be found on the shop floor. Simply put, the more in the back room, the higher the shelf out of stock number. This is not a new finding, a COO from Best Buy made this same observation two decades ago, where his observation was that the items most often out of stock on the shelf, were items that arrived at the store in case quantities that could not all be placed on the shelf, meaning that the excess items needed to go to the back room [never to be found again!] It follows that to fix shelf out of stocks, first, you need to discover the causes of over-stocks in the back room #2: They would prioritise "One Touch" Planogram Designs Toyota have adopted the "just in time" system with a view to reducing inventory in the system. In their system, parts that are needed on the production line are available at the exact time they are required. See video. The retail equivalent would be a system where the shelf would be replenished, with inventory from the Distribution Centre (DC) arriving at the store and then the shelf, at the exact time the last item on the shelf is sold. It is clear that retail is significantly more complex than a car factory, for example, a big retail store will carry up to 30,000 stock keeping units (sku's) and unlike the car factory, there are non-paying customers, also known as thieves, who corrupt the accuracy of the inventory records upon which the expensive replenishment systems depend. What we did hear though from a number of retailers was an increased emphasis on "one touch" planogram / modular designs that maximised the percentage of inventory shipped from the DC that could flow straight to the shelf with no excess quantity needing to go go the back room. Retailers adopting these "one touch" and JIT planograms have recognised that to achieve them, there is a requirement to increase cross functional collaboration between functions such as store operations, category management and supply chain. Cross functionally agreed choices need to be made on the speed of the supply chain, the minimum ship quantities and frequency of deliveries to the store. Choices also in the store on shelf capacity and the space that can be allocated to every sku, and acceptable levels of OSA per sku. Where there are competing incentives and rewards per function, retailers will need to explore ways to remove those functional KPI's as barriers to collaboration. There was no sense in the meeting such collaboration was or would be easy, however, what was clear was that to deliver more "one touch" JIT planograms, retailers will need to consider building new capabilities and skills behind a more collaborative approach to planogram design. #3: They would increase the automation of Shelf Replenishment Routines Research from ECR Retail Loss revealed that sixty percent of all the inventory records in a typical store are wrong, that means that the system thinks there are either more or less items per record than was found at the time of the physical count. There are multiple reasons that explain why those records might be mismatched, including master file errors, pick mistakes at the DC, items shipped to the wrong store, or items being stolen or damaged but the system records not updated. Retailers believe that counting errors are also a big contributor. For example, an associate may find a gap on the shelf, see that the system says that there are (say) twelve of these items in the store, the associate then tries but fails to find those twelve and zeroes the inventory on that item to zero to trigger replenishment. But what if those twelve were actually in the store, for example, the items were on a secondary location, and the associate did not find them? In that case, when the audit takes place, the auditor will find twelve more than the system is stating. The feedback from many retailers interviewed in our research is that the more you ask store associates to inspect, count and adjust inventories, inventory record accuracy worsens. So how could retailers increase the automation of the shelf replenishment process? Examples of such technology possibilities include the use of shelf images from drones, robots or fixed cameras could replace the manual gap scanning processes. Then there is the possibility of using data science and smart algorithms to predict, identify and then "auto correct" phantom inventory. And then in the back room, computer vision can help store associates more easily find the items that can flow from the back room and onto the shelf. In our working group, many of the retailers are experimenting with these technology approaches, in a meeting planned for November 19th, retailers are going to share their learnings. Retailers, CPGS and academics can register for this meeting by clicking here. If you are a retailer, CPG or academic, please send me an email at colin@ecrloss.com if you would like to see the recording of the full meeting. In the meantime, in the video below, Dr Paul Chapman, recaps his key takeaways from the meeting.

OSA: Eleven Fresh Ideas to Reduce Shelf Out of Stocks

We are very happy to share the pitches and retailer Q&A's from eleven of the top 30 OSA innovations. Click here for list of the Top 30. We present them in the order of their pitches from the online showcase. We highly encourage you to view each one and / or, view all eleven in the recording at the end of this section VusionGroup - They utilise wireless mini cameras to provide live updates and analytics for optimal shelf stocking in retail environments. Contact: roy.horgan@vusion.com  ImpulseLogic  - They enhance retail availability and performance with a cloud-based platform that optimises the final steps of the supply chain. Contact: alh@impulselogic.com  NomadGo - They automate supply chains using advanced technology to improve inventory management and operational efficiency. Contact: andrewm@nomad-go.com EVERYANGLE  - They use AI-powered CCTV analysis to prevent losses and optimize staff costs in retail environments. Contact: malachy@everyangle.ai  Traxlo   - They provide local gig workers for retail store operations to enhance productivity and reduce costs. Contact: paul@traxlo.com Badger Technologies   - They use autonomous robots in grocery stores to address stock and planogram compliance issues, improving store operations. Contact: William_Santiago@jabil.com Retail Insight   - They offer an inventory management system that uses POS data and machine learning to correct stock inaccuracies in retail stores. Contact: dave.b@retailinsight.io Vispera   - They standardise data collection for retail and suppliers globally through an image recognition-based platform. Contact: d.gentry@vispera.co Simbe   - They provide AI and robotic solutions to retail, significantly reducing pricing errors and improving stock management and order fulfillment times. Contact: brad@simberobotics.com ParallelDots   - They offer real-time retail shelf monitoring using image recognition technology to improve sales productivity and drive sales. Contact: jen@paralleldots.com  Gather AI  - They provide drone-based inventory monitoring solutions to enhance accuracy and productivity in retail warehouse operations. Contact: Charlie.reverte@gather.ai The full showcase is here: 

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The research priorities are determined by its members – they drive the agenda to ensure ECR delivers research that meets the need of the industry bringing new insights, tools and techniques that enables retailers to sell more and lose less.