preventing shrink

An Attitude Of Service Or Just An Attitude? Attitudes Affect Customer Service

This is going to seem a bit odd to some of you but I want to know if you have an attitude? Store owners, do you have an attitude? Store Managers, do you have an attitude? Has anyone taken a look at the attitude of their employees? EVERYONE has an attitude, the statement isn’t necessarily a negative it can be positive. The problem is we have grown accustomed to thinking of it with a negative connotation. Why is that? Because in some form or fashion we have adopted the idea that an “attitude” shows our independence or ability to be self-reliant regardless of what others think. At times it can be very course and abrasive to others. If that is your “attitude” how does that relate to your customers, or those who work for you? I would like you to consider for a moment that an “attitude” may look more like a chip-on-the shoulder than some sort of independence (in some cases if looks like a boulder more than a chip).

An owner with a poor attitude makes the job more difficult for the managers who work for her or him. The “I’m the boss” temperament may be unstated but if that is how an owner thinks it can reflect into how they give direction and interact with their managers. It frequently means that no one else can have a better way of doing things and leads to a stale operation. I will also tell you that the negative attitude rolls downhill. The way you interact with your managers will be reflected in how they interact with the store associates and they, in turn, have attitudes with the customers. I have seen it in action and I can tell you I have experienced it and have allowed it to impact my interactions with my team in spite of my best intentions. By the end of a workday, everyone leaves in a grouchy mood.

The attitude of the owner affects the attitude of the managers has a direct impact on your customers who don’t have to shop at your store. I happen to work for a company that has two stores in the immediate area. On more than one occasion we have heard comments from customers that they don’t like to go to the other store. They tell us the customer service is poor and the employees are not friendly. On the other hand the manager of the store where I work makes a point of telling the managers they are to do whatever they can to keep customers happy (within reason and without violating policies). Employees may get busy but they enjoy working for this manager. The atmosphere is welcoming and we make every effort to greet our customers and offer assistance when they walk into the building. I have gone into the other store and the climate is different. If a greeting is offered it is more of an obligatory hello that a genuine one.

What is the climate in your store? What do your managers and employees think about your management style? If you aren’t concerned think again. If your store employees are providing poor customer service to customers because of the treatment they receive it as a direct impact on sales and a direct impact on theft prevention. Shoplifters who have been interviewed have said that they target those stores where employees are unhappy. They don’t have to worry about someone trying to give them too much attention. If shoplifters aren’t receiving service, neither are your customers and that means no one is trying to sell let alone up-sell for a store.

Customer service starts with leadership. When the management team seeks to make the climate one where employees enjoy coming to work that attitude will be reflected in the interactions between workers and customers. Owners and managers cannot assume the team is happy. Truly anonymous employee surveys will help gauge what employees are thinking. They can also be a tool for seeking ideas about what employees might want to see done differently or an outlet for ways to improve. Happy employees make a world of difference. What is the climate in your world? Is everything great or is an attitude adjustment in order?

What is Shrink And What Does It Mean For Your Profit And Bottom Line?

What is shrink? Obviously, that will depend on the context in which you are referencing it. It may be what happens when we wash a new pair of jeans in hot water. Maybe it is what happens to our household budget when our children get older and require more food, clothing, and school supplies. In retail, it has a different meaning altogether. Shrink is not a downsizing of a store or reduction of staff (although it can lead to those things if not addressed). Retail shrink is merchandise we cannot account for due to any number of reasons. It impacts the profit margin of a store and since those losses directly affect the retailer there are usually steps the store owner takes to try to offset those lost dollars. If not well thought out those measures the store owner takes could hurt the business further. There is a vicious circle that follows and can lead to a store closing down.

In Retail Loss Prevention we generally identify four primary causes of shrink, shoplifting, employee theft, vendor shortage/fraud and administrative errors. According to the 2017 National Retail Security Survey, approximately 66.5% of shrink is attributable to shoplifting and employee theft combined. 21.3% of shrink is due to administrative and paperwork errors, 5.4% is related to vendor fraud or error and 6.8% was unknown (pg. 8). The same report states that the average retail shrink rate in the U.S. was 1.44% in 2017 (pg. 6). Since this is an average that means there are industry sectors that are higher and others that are a bit lower so where your store may fall can depend on what you sell.

What mistakes do retailers make when trying to cover the profit losses from shrink? Often they increase prices on merchandise. Those price changes may be a few cents per item or a few dollars but no matter how small the increase regular customers notice those hikes. There comes a point when customer loyalty takes a backseat to customer’s budgets. No matter how minute you may feel a price increase is there is a threshold that customers will finally say enough is enough and they relent and shop at a big box retail store. Some store owners will make up for the lost revenue through reduced payrolls. This may include getting rid of full-time positions and making them part-time positions saving on benefit expenses. Employee hours may be reduced all around with the store owner picking up more of the workload themselves. The impact of this strategy is a blow to employee morale and loyalty. It can also lead to increased employee theft as those employees feel the financial pinch of the reduced hours and feel cheated. Reduced employee hours also means fewer people on the salesfloor providing customer service which results in more shoplifting, ergo more shrink. As you can see taking the wrong steps to address shrink can lead to a cycle that is hard to break and can lead to a store shut down.

So if a retailer opts not to raise prices what is the resolution to solving the problem of shrink? Retailers cannot afford to continuously bear the costs of shrink. Assuming over 60% of a store’s shrink is incurred through theft then anti-theft measures are a logical starting point. Sensormatic security systems and tags play a critical role in theft prevention. They are proven to significantly cut into theft related shortage. They also help reduce a portion of administrative shortage. If it is tagged, merchandise overlooked in a shopping cart will activate an alarm and be paid for or returned to the store. Requiring vendors to check in and out of the store on a sign in sheet and making them talk to a manager about what they have done that day holds them accountable. Store managers should be doing weekly reviews of vendor credits to ensure they are not losing money for product removed from the store.

Shrink can cut into your profit margin and if that isn’t bad enough addressing it improperly can make the situation for your store worse. Taking positive steps to address each of the areas where losses occur will improve shortage results. It will make you, your employees and your customers happier when your actions are directed towards the real culprits of shortage.