The fight against losses always starts with the management of business processes. According to experts, known losses (write-offs, damage to goods, etc.) account for the bulk - about 70% - and only a small proportion are unknown (shoplifting, manipulation of documents, etc.). Some experts distinguish between several other types of losses, e.g. anticipated losses. If you have an increase in staff turnover and new, untrained staff, then you can assume an increase in losses, because newcomers are more likely to make mistakes than the "old-timers".
There are also image losses, which are difficult to anticipate. For example, a security guard or salesperson behaved inappropriately, and visitors filmed the episode and posted it on the internet. Such a story can have a huge impact on customer loyalty.
That is why one of the main tasks of the security service is loss management and control of internal regulations: identifying violations among salespeople and cashiers, working with security personnel to prevent not only crimes, but also unpleasant situations that affect the company's reputation.
Piloting new technologies
Today, it is possible to control business processes with effective solutions such as cash register analysis, remote video monitoring, facial recognition, etc. Despite the fact that these tools have long proven themselves in the security market, not all retailers are eager to implement new technologies and pilot projects. Why?
The reason may be an elementary unwillingness to try something new, a lack of initiative when the security management is "fine". Sometimes, on the contrary, the security service is very proactive, but there are a number of decision-makers between it and the top management who can "sink" the project at the very beginning in pursuit of their own interests. For example, operational directors sometimes write off some of the known losses to unknown losses in order to get bonuses. It is important to understand: where the SB has little weight, owners must personally make decisions on pilots.
But more often than not, a banal fear of failure becomes a barrier to piloting new technologies. And this contradicts the culture of piloting abroad, where 10% of successful projects are considered the norm, i.e. 9 out of 10 are unsuccessful pilots. We do not have such a culture of innovation, but innovation directors responsible for implementing new solutions are slowly emerging in networks.
Knowing one simple rule will help reduce the risk of failure: if a company is planning a safety pilot, conduct it only in the home region. It is always important to monitor the implementation of new technology at the start-up, which cannot be done if the pilot is launched in a remote region away from the head office. Such pilots fail 80% of the time because of the administration, which for the reasons listed above will do everything to prevent fraud from being detected.
How to choose the right contractor
Of course, not all retailers are resistant to pilots - there are those who are trying to implement effective solutions. But how do you choose a competent security contractor who won't let you down and offers something that works?
The first thing to look for is the contractor's transparency. Why is it important? Key banks today openly state that they are obliged to provide information to the Central Bank about all dubious transactions of their clients. And if a security company suddenly failed to pay taxes and disappeared into obscurity, the customer will pay for it. As the results of the retail survey at Imperator-Forum 2021 showed, the market has not yet recognised the importance of cooperating with transparent contractors.
To understand how transparent the contractor you have chosen is, it is worth looking at public websites where you can see the contractor's revenue and compare it with the amount of taxes paid. Also note the number of registered employees: it often happens that a company employs 20 people but has a turnover of 500 million. Such figures are very telling.
There are few loss management contractors on the market, and it is important to share experiences. You can always call the head of security of a large network and ask for an opinion on the security companies you are considering, ask for a recommendation.
There is no magic pill
People in retail, and security in particular, complain that they get a lot of offers, but very often they sound like "we don't have a loss management solution, we can build something tailored to you". And that's another problem: no one wants to waste time on untested tools.
But don't forget that this has been the case with all innovations: someone was first anyway. So who are these companies: the fools on whose skin the product was tested, or the advanced companies who are not afraid of taking risks and were the first to implement a cool solution?
Yes, you can wait for proven universal technologies to appear on the market, but that's not how it works in retail. There is no magic pill for all chains, everyone has their own experience and their own types of losses: some have spoiled products, others have shattered goods, others lack frost resistance. Losses also depend on access to goods, the method of payment, dispensing goods, the availability of loyalty cards... A new solution in any case needs to be customised for a particular customer, and that is always a launch of a pilot project.
And it is up to the COO and security manager to develop a loss management strategy and decide which tools are worth testing and which are not. Fear of failure and wasted time is normal, but nothing prevents you from trying out a pilot on 10 out of 500 shops, as long as the risk is literally pennies