STORES Magazine - May 2009 - (Page 54)

LPINFORMATION / PRODUCT PROTECTION Rx for Shrink BY LEN LEWIS CVS collaborates with vendors, suppliers to reduce external theft ny retailer will tell you that an increase in theft — internal and external — is an unfortunate side effect of the recession. But shrink, including the sharp rise in organized retail crime, can be effectively managed and significantly reduced by a chain-wide approach to the problem that includes fostering closer relationships with law enforcement, vendors and solution providers. A This is the path being followed by CVS Caremark, whose 6,900 CVS/pharmacy and Longs Drug stores make it the largest pharmacy and retail health care provider in the country — and one of the most pro-active practitioners of loss prevention. “Without a doubt, our shrink is lower than it has been,” says product protection manager Jon Roberts. He declined to cite specific figures, but says that “the holistic approach we took five years ago has driven shrink down to a level that is best in class within the industry, and we intend to keep it there.” Roberts agrees with the conventional wisdom about the correlation between shrink and the state of the economy. “Historically, it gets worse in hard times and, as time goes on, there will be more pressure on people to make bad decisions,” he says, “but we haven’t yet seen a dramatic spike.” CVS, which generates nearly threequarters of its revenue from the pharmacy, has long recognized the need to be pro-active. “There’s a dual force at play in retail,” Roberts says, “the challenge of reaching top-line sales numbers and the intense pressure on the bottom-line num- bers from internal and external theft.” Internal shrink is always a concern, but a combination of store training and prudent use of technology has kept many employees from making what Roberts terms “bad decisions.” With external theft on the rise, however, a dual focus is a business imperative. “Like other retailers, we are facing great pressure from organized retail crime,” he says. “That activity has spiked over the last four or five years.” As a result, the use of data mining and analytics has increased. “We look at the data coming through the systems and we hold a quarterly training program on internal and external theft practices,” “There’s a dual force at play in retail: the challenge of reaching top-line sales numbers and the intense pressure on the bottom-line numbers from internal – Jon Roberts, CVS and external theft.” Roberts says. “This includes additional resources being applied against e-fencing. “I have a person that monitors online activity, looking at sellers and fencing locations in a timelier manner. Data mining tools help us identify employees that are selling product online.” CVS is taking the initiative when it comes to building ORC cases. “Typically, when our investigators come across a case, we build the intelligence and work with ORC teams at other retailers and pool resources,” Roberts says. “Then we bring the case to law enforcement agencies.” 54 STORES / MAY 2009 WWW.STORES.ORG http://WWW.STORES.ORG

Table of Contents for the Digital Edition of STORES Magazine - May 2009

STORES Magazine - May 2009
Executive Editor's Page
President's Page
Facts to Chew On
What Shoppers Think
Deals "R" Us
10 Things You May Have Missed
Numbers Worth Counting
Full Price/Markdown
Retail People
Cover Story: Brand X Power
Home Improvement
Credit Where Credit's Due
Locate, Locate, Locate
New Playbook
Staying in the Fast Lane
Clean and Green
Driven to Please
Farm System
Rx for Shrink
Zeroing Out Zombies
Rogues Gallery
Ounce of Prevention
Loeb Retail Letter
Chain Action
Optimism Rocks
ARTS Update
Point of View
Retail Crossword
Retail Industry Calendar
End Cap

STORES Magazine - May 2009