We’ve all been there, we are on our way to work and the next thing you know you come to a standstill. Cars backed up as far as you can see and no one is going anywhere. The clock is ticking away and you begin to worry knowing you are going to be late getting to the office. You look for a side street to try to get out of the mess then, someone with a little bit of guts and a four-wheel drive truck pulls onto the shoulder of the road and speeds by everyone to get to their destination. Everyone gets to where they are going but some people are determined not to let obstacles get in their way and they take the fast track to get there. They went the same route they just overcame the obstacles that would get in their way.
Retail can be like that too. A new store may start off doing pretty well and may even see growth the first few years. Over time the store does nothing new, profits stagnate or start to decline a little but it is just blamed on a slowdown in the economy.
The media and industry trade journals attribute the decline in sales in brick and mortar stores to online competition and the ease of shopping at home. I liken this to getting stuck in traffic and not being able to see more than a hundred yards ahead of where you are. You guess there is an accident or you assume there is a traffic light out and it is certainly not your fault you are going to be late for work. Does that HAVE to keep you from getting through to your destination? I argue that it does not. The innovator takes a risk, gets on the shoulder of the road and blazes on by everyone else in the traffic jam. Is there risk? Yes, and notice I did not say the innovator plows through all the other cars leaving mass destruction in his wake. The risk is to the driver and his vehicle because he could run over an unseen hazard in the dirt or run into a ditch. The other vehicles are safe as they idle and slowly start to run out of gas. The risk taker measures the risk and determines that the payoff is worth the risk he/she is taking.
So how does all of this relate to shortage and profitability? Some store owners have chosen to operate their businesses without the use of any type of retail anti-theft devices. The store may conduct inventory and losses show up but the owner decides that the losses are related to operational issues rather than theft or fraud. Another inventory cycles and shrink goes up a bit but there is little thought given to the Impact of shoplifting. Over the years the shrink gradually creeps up just a little at a time and sales remain basically where they have been. That shortage is eating into the profit line of that retailer but no one takes notice. Eventually theft impacts the store to the point where it is too late to regain control and the owner is forced out of business. He’s just sitting in the backed up lane of traffic waiting to run out of gas and get pushed off to the side of the road. Had proactive steps been taken the problem could have been avoided. Had the owner chosen to install an electronic article surveillance towers at the doors and use tags on merchandise theft would have been prevented before things spun out of control.
Improving shortage means improved profits for store owners. The use of retail anti-theft devices and looking for fresh, new ideas to bring in additional customers can be the combination that keeps a store from falling by the wayside. You have the green light to get in the fast lane and pass up your competition.
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