January - February 2013

LPportal.com | V12.1 January-February 2013

LOSS PREVENTION

MAGAZINE THE VOICE OF LOSS PREVENTION

Traffic Counting and Conversion Rate What LP Professionals Need to Know and Why

INTERVIEW WITH PUBLIX’S DENNIS WAMSLEY LULULEMON'S CULTURE OF HONESTY AND INTEGRITY MOBILITY AND CLOUD COMPUTING

Contents

15 6 PUBLISHER’S LETTER Big Show Opportunities

By Jack Trlica

Traffic Counting and Conversion Rate

8 ON THE WEB

What LP professionals need to know and why

10 RETAIL SPONSORS

By Mark Ryski, HeadCount Corporation

12 INTERVIEWING Cognitive Interviewing

By David E. Zulawski, CFI, CFE and Shane G. Sturman, CFI, CPP

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26 ACADEMIC VIEWPOINT Self-Checkout: What Constitutes “Real” Customer Service?

By Richard C. Hollinger, Ph.D.

Managing LP and Safety in a Customer-Service Culture

38 ASSOCIATIONS IN ACTION Thinking Differently Is Your Greatest Asset

By Rhett Asher

A conversation with Dennis Wamsley of Publix

48 EVIDENCE-BASED LP Opinion vs. Fact

By Read Hayes, Ph.D., CPP

By James Lee, LPC, Executive Editor

59 SOLUTIONS SHOWCASE - Alpha

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60 INDUSTRY NEWS - ECR Europe Announces Shrink Study - From Mail Order to Big Box…and Back - LP Vendor Executives Retire - Newly Certified LP Professionals

By Robert L. DiLonardo

Asteya and the Attitude of Gratitude

lululemon athletica’s culture of honesty and integrity

By Erik Newcomb and Rich Groner, lululemon athletica

62 CALENDAR 62 PEOPLE ON THE MOVE

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64 ADVERTISER DIRECTORY 65 VENDOR SPONSORS

Mobility and Cloud Computing

66 PARTING WORDS Good Things Do Happen to Good People

By Jim Lee, LPC

The impact of emerging technologies on loss prevention

By Phil Belena, Enfatica, and Richard Marino, the Stores Consulting Group

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January - February 2013

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Publisher’s LETTER

MAGAZINE

Big Show Opportunities

700 Matthews Mint Hill Rd, Ste C Matthews, NC 28105 704-365-5226 office, 704-365-1026 fax

I

n the last few months I’ve attended two conferences I rarely attend. The first was ASIS International’s annual mammoth exhibition of all things security held each September. Most recently I visited the NRF’s Big Show held in New York City each January. Following are some thoughts on these shows from a retail loss prevention perspective.

ASIS If you’ve never been to ASIS, imagine row after row of literally thousands of exhibitors spread over multiple floors with everything from high-tech surveillance vans to drug-sniffing dogs to razor wire. Some LP solutions providers, such as Tyco and Axis, exhibit at ASIS because they offer solutions across a broad range of industries, not just LP, which makes sense. My guess is that a retail-specific vendor would be lost at ASIS. ASIS does have a retail council that sponsors a few educational seminars, though the majority of the educational content is aimed more at corporate and industrial security. That being said, LP professionals who also have corporate and physical security responsibilities can benefit from visiting ASIS. I know the retail council would love to have more retail LP professionals attend to build their segment. It’s also possible that you could find some non-LP providers with solutions that could be adapted to retail.

Big Show While I have attended ASIS numerous times over the past two decades, primarily when I worked for Pinkerton, I had never attended the Big Show. I went to New York with low expectations. From what I had heard, I didn’t expect to see any LP vendors exhibiting nor any LP professionals walking the hall. I was wrong.

Even though the show is really big…not the size of ASIS I’m guessing…but still big compared to LP conferences, I ran into a fair number of people I knew. Quite a few LP solutions providers were exhibiting, including i3 International, SIRAS, StopLift, as well as Axis and Tyco. And I saw a

number of LP executives talking to these and other exhibitors. I asked many of them why they attended the Big Show. Visit our EyeOnLP page (EyeOnLP.com) to hear some of their reasons.

One of them, David George of Harris Teeter, gave me an explanation I hadn’t considered. He told me that he had been coming to the Big Show for several years along with other members of the Harris Teeter team, including executives from IT and operations. They either walked the exhibit hall together or compared notes in order to visit suppliers that touched the larger organization, including companies that may not exhibit at LP shows. That caused me to think.

Cross-Functional Teams As technology integration continues moving forward, attending conferences with your internal partners across the organization has benefits. Whether you as an LP executive visit a broad retail or security show like ASIS or the Big Show, or whether you invite your IT and operations peers to RILA, FMI, or NRF loss prevention conferences, having a number of stakeholders talking and listening to solutions providers jump starts the decision-making process. Now you, as the LP practitioner, don’t have to go back to sell a solution on your own.

Now you can go back as a team with many of the decision-makers already familiar with the solution and possibly already on board.

Don’t get me wrong. I still believe that the LP-specific conferences remain the best place to engage with LP suppliers, hear the most appropriate educational sessions, and certainly engage in the best networking venue for loss prevention professionals.

Still, don’t disregard alternative conferences and don’t exclude your internal peers from the LP shows. There is much to gain from both.

Jack Trlica Editor and Publisher

January - February 2013

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EXECUTIVE EDITOR James Lee, LPC JimL@LPportal.com CONTRIBUTING EDITORS Robert L. DiLonardo Walter E. Palmer, CFI, CPP, CFE Amber Virgillo CONTRIBUTORS William A. Alford, LPC, CFE Read Hayes, Ph.D., CPP Richard C. Hollinger, Ph.D. Mike Marquis, CFI Gene Smith Shane G. Sturman, CFI, CPP Kelby Woodard David E. Zulawski, CFI, CFE DIGITAL EDITOR John Selevitch JohnS@LPportal.com CREATIVE DIRECTOR Larry Preslar PROOFREADER Amy Trainor DESIGN & PRODUCTION SPARK Publications info@SPARKpublications.com 704-844-6080 A D V E RT I S I N G

ADVERTISING MANAGER Bonnie Dodson 828-479-7472 office, 704-943-5797 fax BonnieD@LPportal.com WEST COAST REPRESENTATIVE Ben Skidmore 972-587-9064 office, 972-692-8138 fax BenS@LPportal.com S UB S CR I P T I O N S E R V I C E S

NEW OR CHANGE OF ADDRESS www.myLPmag.com POSTMASTER Send change of address forms to Loss Prevention Magazine P.O. Box 1088 Lowell, MA 01853 LossPrevention aka LP Magazine (USPS 000-710) is published bimonthly by Loss Prevention Magazine, Inc., 700 Matthews Mint Hill Rd, Ste C, Matthews, NC 28105. Print subscriptions are available free to qualified loss prevention and associated professionals in the U.S. and Canada at www.myLPmag.com. The publisher reserves the right to determine qualification standards.

International print subscriptions are available for $99 per year payable in U.S. funds at www.LPportal.com. For questions about subscriptions, contact circulation@LPportal.com. Periodicals postage paid at Matthews, NC, and additional mailing offices.

LossPrevention and LP Magazine are service marks owned by the publishers and their use is restricted. All editorial content is copyrighted. No article may be reproduced by any means without expressed, written permission from the publisher. Reprints or PDF versions of articles are available by contacting the publisher.

Statements of fact or opinion are the responsibility of the authors and do not necessarily represent the opinion of the publishers. Advertising in the publication does not imply endorsement by the publishers. The editor reserves the right to accept or reject any article or advertisement.

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EDITOR AND PUBLISHER Jack Trlica JackT@LPportal.com

LPportal.com

© 2013 Loss Prevention Magazine, Inc.

ON THE WEB

EYEONLP

Editorial Board

Check out the new EyeOnLP.com page for the latest LP-related videos, blogs, career advice, and ORC news from the magazine and around the web.

Amber Virgillo has an entertaining talk with Cita Doyle of InstaKey about her company’s services and how they help loss prevention professionals.

Columns

There are a number of new articles on the magazine website you may have missed. Visit the Columns page at LPportal.com for these and many more.

Jim Carr, CFI Director, International Loss Prevention, Rent-A-Center

Randy Meadows Senior Vice President, Loss Prevention, Kohl’s

Ken Cornish Vice President, Retail Operations, The Kroger Co.

Dan Provost, LPC Vice President, Global Loss Prevention, Staples

Francis D’Addario Emeritus Faculty Member, Strategic Influence and Innovation Security Executive Council

Tom Roan Group Vice President, Loss Prevention, Macy’s Tim Shipman, LPC Director, Corporate Investigations and Crisis Management, Delhaize America

Patti Felz Vice President, Loss Prevention, Polo Ralph Lauren

Mark Stinde Vice President, Asset Protection 7-Eleven

Barry Grant Senior Vice President, Operations & Loss Prevention, CPI Corp

Paul Stone, LPC Vice President, Loss Prevention and Risk Management, Best Buy

Five Questions You Should Ask the Interviewer

By Herman O. Laskey, Jr., LPQ, CFI

Bill Heine Senior Director, Global Security, Brinker International

Going from Law Enforcement to Asset Protection

By Curtis Bridges, CPP Going from Asset Protection to Law Enforcement

By Officer Joseph Alvino Internal Theft Solved

By Amber Virgillo

Sonya Hostetler Vice President, Asset Protection & Safety, Walmart Stores U.S.

LP Insider

Be sure you get the latest news and features with our weekly e-newsletter.

■ Current LP, retail, and technology news, ■ Original content from magazine staff and contributors, ■ Latest white papers from solutions providers, ■ People on the Move listings, and ■ A little fun to brighten your week.

If you are not receiving the LP Insider, visit the magazine home page at LPportal.com and click on the links under e-newsletter to read the latest issue or to sign up. If you would like to contribute articles to the e-newsletter or have any comments, contact us at newsletter@LPportal.com.

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Chris McDonald Senior Vice President, Loss Prevention, Compass Group NA

Charles Delgado Vice President, Manager of Asset Protection BJ’s Wholesale Club

Ten Steps to a Perfect LinkedIn Profile

By Bill Petropoulos

Go-to People in LP - Scott Draher, Lowe’s - Kevin Plante, Staples

By Jim Lee, LPC, and John Selevitch

Ken Amos, LPC Divisional Vice President, Loss Prevention Walgreens

January - February 2013

Frank Johns, LPC Chairman, The Loss Prevention Foundation Gary Johnson Vice President, Loss Prevention, Vitamin Shoppe Paul Jones, LPC Senior Director, Global Asset Protection, eBay Bob MacLea Senior Vice President, Loss Prevention, TJX

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Bill Titus Vice President, Loss Prevention, Sears Holdings Bill Turner Senior Director, Retail Operations, Cole Haan Claude Verville, LPC Vice President, Loss Prevention, Safety & Hazmat, Lowe's Stanley E. Welch, LPC Vice President, Director of Loss Prevention, jcpenney Keith White Senior Vice President, Loss Prevention and Corporate Admin., Gap Inc.

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LP Magazine | January - February 2013

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interviewing

by David E. Zulawski, CFI, CFE and Shane G. Sturman, CFI, CPP

Cognitive Interviewing I

n our last column we discussed another type of interview called the PEACE interview, which is a method of interviewing victims, witnesses, and suspects in the United Kingdom and other parts of the world. In a PEACE interview the investigator uses open-ended questions to develop a narrative response from the individual. In the later stage of the interview, suspects are offered an opportunity to explain evidence developed by the investigation that contradicts their story. Unlike the United States, and unique to the U.K., if the suspect offers no explanation to the evidence when he is first interviewed, but offers one later at trial, it will be held against him.

Another type of interview an investigator may use is called the “cognitive interview.” Knowledge of this interview is part of the body of knowledge required to become a Certified Forensic Interviewer (CFI). This interview was developed by Ronald P. Fisher and R. Edward Geiselman to assist cooperating witnesses to more accurately recall the details of an event. In an eyewitness interview, the problem is always to obtain as much accurate relevant information as possible from the witness without contaminating the memories. This interview is not designed to obtain a confession from someone withholding information and is useful only with cooperative individuals.

The cognitive interview was developed using the latest research in cognitive psychology with heavy inclusion of practical field experiences of seasoned interviewers. Research studies of the approach have shown increases in relevant information obtained by 47 to 55 percent after training in the cognitive interview. So, with structure and training an interviewer can significantly increase an individual’s recollection of events in greater detail than ever before.

The Problem with Memory

The most significant problem is memory, which is still somewhat of a mystery to even the most learned researchers.

Recently, there was discussion that a retrieved memory may not recall the actual memory, but the memory of the last recall and telling of the event. Certainly, we have all had incidents in our lives where an event was recalled significantly differently from the others who were present at the time.

Memories can be thought of in three phases—encoding, storage, and retrieval. But this is not as simple as thinking of a memory as a video filmed and placed on a shelf for retrieval. The memory may be influenced by a huge number of factors, such as our psychological state, emotions, context, similar experiences,

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Zulawski and Sturman are executives in the investigative and training firm of Wicklander-Zulawski & Associates (www.w-z.com). Zulawski is a senior partner and Sturman is president.

Sturman is also a member of ASIS International’s Retail Loss Prevention Council.

They can be reached at 800-222-7789 or via email at dzulawski@w-z.com and ssturman@w-z.com. © 2013 Wicklander-Zulawski & Associates, Inc.

attention, and personal biases to name but a few. To a large extent the cognitive interview focuses on the retrieval of the memory, rather than the storage or observation components. We have all forgotten something only to later recall the information; so it was there, but our recovery strategy needed to be improved.

The cognitive interview can be thought of in two components—the person’s memory and his communication of it to us. The interviewer can cause problems for the witness with frequent interruptions that disrupt the flow of the memory, making the process feel rushed or like some information is not worth reporting. Another factor reducing detail from subjects was jumping around the memory, forcing the witness to leave memories before their recall was complete. Details were omitted as the jumps occur, making them harder to retrieve later.

Another problem is the witness’ expectation that the interviewer is going to control the interview, especially if the person has just been victimized. However, the interviewer must convey to the witness that he plays a key role in generating information during the interview.

It makes sense that the way to begin is to set the ground rules for the interview, since many people have never participated in giving testimony to an investigator.

Setting Ground Rules

Following are some general instructions to tell the witness when setting the ground rules for the interview: ■ Explain that the witness plays a key role in generating information.

■ Explicitly tell the witness to be as detailed as possible.

■ Encourage the witness to concentrate and use imagery and pictures to help recall information.

■ Caution the witness that it’s normal to not know all the answers to questions, but not to guess or make things up.

■ If there are questions that the witness does not want to answer, have them simply say, “I don’t want to answer that question.” This instruction is important in cases relating to sexual abuse or harassment where the victim may be embarrassed about what happened. This does not mean the interviewer will never return to this area, but postpones it until the end of the interview where rapport is greatest.

■ If the witness does not understand the question, tell them to request to hear the question in a different way by saying, “I don’t know what you mean.” continued on page 14 |

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continued from page 12 ■

xplain that you may ask the same question more E than one time, which doesn’t mean you do not believe the witness or that they should change their answer.

Rather, it will help add details, so the witness should answer with whatever they recall as best they can.

Structured Steps

The structured techniques incorporated in the cognitive interview that are utilized to enhance the recollection of the victims and witnesses are as follows: Establish rapport—The interviewer starts the process by establishing rapport with the witness or victim and gives the ground rules outlined above.

Reconstruct the circumstances of the event—The interviewer begins by asking the witness to reconstruct how the incident began and the circumstances surrounding it, but begins before the event so the witness has a context for the memory. This effectively allows the witness to warm up before actually

The cognitive interview was developed using the latest research in cognitive psychology with heavy inclusion of practical field experiences of seasoned interviewers. Research studies of the approach have shown increases in relevant information obtained by 47 to 55 percent after training in the cognitive interview. attempting to retrieve the memory of the event. The interviewer instructs the witness to think about what the environment looked like from the weather to lighting to the cleanliness of the room. In addition, they also ask the victim or witness to recall their emotional mindset at the time of the incident. Asking the witness to use imagery helps in retrieving details of the event.

Instruct the eyewitness to report everything—The victim or witness has been informed not to omit any details, no matter how small. The interviewer has explained even very minor pieces of information may be important to the investigation. This is important since no witness is really trained on what is relevant to report. The interviewer uses open-ended questions to elicit information from the witness.

Then the interviewer uses open-ended probes using the witness’s own words to further expand the memory without contaminating the account with his own words, which may reflect assumptions or biases. The interviewer should limit any interruptions of the witness account and use closed-ended questions only after the full account has been made.

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January - February 2013

Recall the events in a different order—The interviewer may instruct the eyewitness to start from the middle or end and move either forward or backward through the story at a number of different points.

Change perspectives—Ask the witness to change roles or positions with another person in the incident and to consider what he or she might have seen. Ask them to mentally change their position and ask them to imagine what they might have seen from their new location.

The cognitive interview’s basic value is that it reconstructs the circumstances in a number of different ways in the witness’ mind. The non-law enforcement person rarely has an idea of what may or may not be of value to the investigator, and the small details obtained by this method often lead to other details being remembered.

Specific Techniques

The cognitive interview also has developed five specific techniques to develop specific items of information.

Physical appearance—The witness is asked to think about the suspect in terms of “Did he remind you of anybody and why?"

“Was there anything unusual about his appearance or clothing?”

Names—If the suspect spoke a name during the incident, what was the number of syllables or what was the first letter of the name?

Numbers—If a number was involved, was it a low or a high number, how many digits were in the number, were there any letters that were in sequence? This is especially valuable in attempting to remember license plate numbers.

Speech characteristics—Ask the witness if the voice reminded him of anyone and why was that? Were there any unusual accents, words, or tone of voice used by the suspect?

Conversation—The eyewitness should be asked if there were any reactions to what was said, if any of the reactions were unusual, and if there were any unusual words or phrases included in the conversation?

The methods used with the cognitive interview are not inconsistent with the PEACE interview and, in many cases, there is an overlap of applications since both may be used to obtain details of the event from victims and witnesses. The primary difference between the two is the confrontation of the individual who has been lying about the incident.

Listen to Podcasts of Interviewing Columns |

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Go to the Podcast page on the magazine website, LPportal.com, to download or listen to podcasts of select past columns and other articles from the print magazine.

Cover Feature

Traffic Counting and Conversion Rate What LP Professionals Need to Know and Why

By Mark Ryski © 2013 Mark Ryski

Traffic Counting and Conversion Rate

W

hile traffic counters are not generally considered part of the loss prevention domain, increasingly LP professionals are being called upon to get involved in traffic-counter projects. Since traffic counters are part of the in-store technology ecosystem, LP personnel…masters of the in-store technology ecosystem that they are…make good conscripts to help implement and sometimes even manage the traffic-counting system.

The idea is not too far-fetched when you consider that LP has plenty of expertise and experience with installing structured cabling; connecting devices to internal, centralized networks; and keeping it all up and functioning. Looks like a pretty good fit to me.

However, there’s another connection between LP and traffic counting that seems to be getting some buzz that I’m somewhat skeptical about—leveraging existing LP systems to capture traffic-count data.

Before we get to some specific uses for traffic data, let’s start with the biggest “why”—why even bother?

What’s Store Traffic Going to Tell Us That We Don’t Already Know?

If this question has crossed your mind, you’re in good company. Many senior executives have asked me this very question. It’s especially relevant when you consider the

Using LP Infrastructure to Count Traffic—More Sizzle than Steak

While I am a big believer that LP and traffic counting… along with in-store analytics for that matter…are a natural fit, the LP experts I talk to say that the idea of using existing LP surveillance systems to track store traffic and in-store shopper behavior is still very much a work-in-progress. Trying to get multiple uses from the same camera often means that something gets compromised, and so traffic counters are still largely separate, standalone systems.

Regardless of how LP gets engaged (or drafted) into the traffic-counter discussion, it’s important that the LP organization have an understanding of the business rationale for installing traffic counters in the first place; that is, the business “whys” for traffic counting, if you will.

Any retailer today still arguing against the value and importance of fundamental metrics like traffic and conversion will find themselves on the wrong side of the argument. The retail industry has reached the tipping point with respect to traffic counting…finally. Tracking store traffic and measuring conversion rates have evolved from nice-to-have to must-have for retailers of all sizes and categories.

Traffic Matters and Conversion Is Critical

Any retailer today still arguing against the value and importance of fundamental metrics like traffic and conversion will find themselves on the wrong side of the argument. The retail industry has reached the tipping point with respect to traffic counting…finally.

Tracking store traffic and measuring conversion rates have evolved from nice-to-have to must-have for retailers of all sizes and categories. While formal industry penetration data on traffic counters are hard to come by, a quick stroll through any mall will reveal that more major retailers track traffic today than those who do not.

Part of the reason that traffic counting is becoming so ubiquitous is because the insights have so much practical value across so many functional areas. From store operations and merchandising to HR and marketing, basic store traffic and conversion data can help inform a multitude of important decisions.

If your chain doesn’t have traffic counters installed at the front door today, there’s a very good chance it will, probably sooner rather than later.

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LPportal.com

Traffic Counting and Conversion Rate significant investments retailers are making in sophisticated customer relationship management (CRM) and point-of-sale (POS) systems that seem capable of capturing every imaginable morsel of customer data. So, what can a simple traffic counter tell you that you don’t already know? A lot.

Traffic and conversion analytics focus on what happens before the transaction is recorded in your POS or CRM system…if one is ever recorded at all. That’s what makes traffic and conversion data especially useful. Together, they tell us about the sale we almost had—a perspective on what might have been. No transaction-based system, even the most sophisticated, can tell you about the sale you almost had.

It all starts with traffic. If prospects don’t visit your store, you have no chance at making a sale. So, understanding prospect visitation is vital to understanding the sales opportunity. But getting prospects to visit your store is merely step one. Step two is “converting” the traffic into a sale.

Conversion rate (sometimes called “close rate”) is a measure of the percentage of buyers to visitors. Think of it as the store’s batting average. Conversion rate is calculated by simply dividing the number of sales transactions by the traffic counts. If you don’t know your traffic count, it’s impossible to calculate your conversion rate.

So, the big “why” of traffic counting is that it enables retailers to understand the potential sales opportunity (traffic) and helps measure how well stores are doing at capturing the

opportunity (conversion rate). Without knowing something about the sales opportunity, how can you fully understand how your chain is performing? I say you can’t. Here’s a simple example to illustrate.

Let’s say your same-store or “comp-sales” are up 5 percent compared to last year. In isolation this may appear to be a good result. Without traffic data for context, we have no way to understand how good a 5 percent sales increase is. Now consider the 5 percent increase in same-store sales, but this time you have traffic data for context. What if you knew that overall traffic in the store was up 15 percent compared to last year? The opportunity (traffic) got 15 percent larger, but sales were only up 5 percent—an improvement that seemed good until we understood the opportunity. I would argue that the store under-performed versus the traffic opportunity.

Now consider the same 5 percent sales improvement, but this time we discover that store traffic was actually down 15 percent. If the traffic opportunity shrunk by a whopping 15 percent, but same-store sales were still up 5 percent, this suggests that the store over-performed compared to the shrinking opportunity.

Without traffic data it’s impossible to tell if the 5 percent sales improvement is good, bad, or great. Context can dramatically change how we view results and help guide what actions we take, and that’s what makes it so important.

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Traffic Counting and Conversion Rate

Conversion rate (sometimes called “close rate”) is a measure of the percentage of buyers to visitors. Think of it as the store’s batting average.

Conversion rate is calculated by simply dividing the number of sales transactions by the traffic counts. If you don’t know your traffic count, it’s impossible to calculate your conversion rate.

There are plenty of other really great uses for traffic and conversion data, and I’ll review some of the most important ones.

Driving Store Sales Performance

Just like a fingerprint, each and every store in a chain is unique. Think about it—each store is in a unique geographic location, it has a different staff, different demographics of the customers in its immediate market, different competitors, climate, and microeconomic conditions. You get the picture.

Stores generally don’t control traffic, but they do control what they do with traffic that comes into the store. Stores with low traffic, but higher conversion and average ticket values, need more traffic. Traffic for these locations is the key sales driver.

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Stores that have high traffic, but low conversion and average ticket values, need to focus on driving these metrics.

Perhaps it’s staffing levels, perhaps it’s training or inventory, but whatever the driver is, we know it’s not traffic.

Traffic and conversion analytics put store results in context, providing the operations team with critical insight into not only how results are being driven at store-level, but more importantly, what they need to focus on to improve results for each store.

Once you have a bead on how stores are performing relative to their unique traffic opportunity, you quickly turn your attention to improving performance, and one of the most important ways to do this is by optimizing staff scheduling.

Traffic data is critical for this.

Staffing to Traffic

Scheduling staff effectively is hard, but the rewards are huge. Even with the most sophisticated workforce management tools at your disposal, the quagmire of government labor regulations, huge swings in seasonality, and the complexities of managing human capital make this one of the most critical challenges retailers face.

Staff scheduling is a double whammy. Under-staff and you miss sales opportunities and run the risk of ticking-off prospective buyers. Over-staff and you hurt profitability.

Retailers that don’t have traffic counters often rely on sales transaction counts as a surrogate for actual store traffic.

They then use these transaction counts to schedule staff. The problem is that transaction counts only represent the number of people who made a purchase; they do not account for those who visited and did not buy—the missed sales.

With traffic data, retailers can schedule staff relative to the traffic opportunity that comes into the store. According to workforce management expert Larry Leibach of Workforce Insight, “relying on transaction data to schedule staff is a mistake...traffic data gives you the best, most unbiased future forecast to base your staff scheduling on.”

If retailers used traffic counters for nothing more than helping schedule staff, the investment would be well worth it.

But there is so much more that can be done with the data, like gaging the quality of in-store experience.

Conversion Rate—An Important Measure of Store Experience

Pursuing the “ultimate” store experience has become an obsession with retailers. From online surveys and social media monitoring to good old-fashioned customer-satisfaction surveys, focus groups, and mystery shopping, retailers go to great lengths…not to mention expense…to measure the shopping experience in their stores.

While it’s undeniable that measuring in-store experience is an important thing to do, retailers often find it hard to turn the insights that come from traditional store experience measures into action that delivers better sales results.

January - February 2013

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LPportal.com

Traffic Counting and Conversion Rate Measuring customer experience is important for any retailer interested in driving sales and competing effectively, but to really make sense of these measures you need to understand store traffic and conversion rates.

Great customer experience scores should translate into commensurately positive in-store sales results, but the fact is they often don’t. Stores with high sales can have poor customer experience scores, while stores with low sales can have high customer experience scores. Part of the problem is that you can’t directly connect sales results to customer experience scores because there’s a moderating variable—store traffic volume.

Think about it. What’s it like to shop in a very busy store? The isles are clogged, it’s hard to find a sales associate, and there’s a line-up at check-out; not a very good in-store experience. You can imagine that the mystery shop or customer survey results in a store like this wouldn’t be very good. However, given the high volume of traffic, despite the fact that many people have a poor in-store experience, and many probably leave without making a purchase, overall sales still look pretty good.

Now consider the in-store experience of a store that has very little traffic. The isles are free and clear, sales associates are doting on you, and there’s no line-up at check-out. It’s a wonderful in-store experience, but the lack of store traffic results in modest sales even if most everyone buys. In this case,

improving customer experience won’t deliver higher sales.

Rather, this store needs traffic.

Store traffic data provides critical context that enables management to better understand what’s impacting in-store experience scores, and conversion rate helps pinpoint where and when lapses in customer service are likely to be occurring.

Sags in conversion rates are telltale signs that customer-service issues are occurring. By knowing where and when these conversion sags occur…by hour, by day…management can focus their efforts on where they are most needed.

Traditional customer-experience measures are still important, but store traffic and conversion data make these traditional customer-experience measures even more meaningful and actionable. The result—better in-store experience scores and higher sales.

Before a prospect can have a store experience, she needs to visit the store, and that’s what advertising and promotions are largely about—getting prospects to visit the store.

Measuring the Impact of Advertising and Promotional Activity

Looking at sales results to understand the impact of advertising programs is like trying to measure room temperature with a tape measure—it’s the wrong measuring device. But that’s essentially what retail marketers do when

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Traffic Counting and Conversion Rate they try to measure their advertising programs by store-level sales results.

Sales don’t walk-in to your stores; prospects do. To a great extent, advertising and promotional investments are made to create in-store sales opportunities, that is, to drive store traffic.

Once in the store, the question of whether a prospect makes a purchase is an entirely different matter. There are literally hundreds of variables that can make or break the sale that have nothing to do with the advertising. So the advertising may have been effective, but the sale could still be lost.

If your advertising is effective, there should be a measurable impact on store traffic levels. To be clear, store traffic is not the same as “transaction count.” Lots of retailers seem confused about this. Transaction count only represents the number of people who bought, while store traffic includes both buyers and non-buyers. If you want to understand what impact your advertising is having you need to measure store traffic; transactions won’t cut it. Here’s an example to illustrate why.

The marketing team rolled up their sleeves, carefully assessed the media options, scrutinized and tested the creative, and then brilliantly executed a chain-wide, one-day promotional campaign that ran on the third Saturday of the month.

The campaign launched and the marketing team held its collective breath. The sales results came in, and they weren’t good. Compared to other Saturdays during the

The big “why” of traffic counting is that it enables retailers to understand the potential sales opportunity (traffic) and helps measure how well stores are doing at capturing the opportunity (conversion rate). Without knowing something about the sales opportunity, how can you fully understand how your chain is performing? I say you can’t.

continued on page 22

OUR BEST TO YOU. On behalf of the dedicated team of attorneys and legal professionals at Palmer, Reifler & Associates, we wish you a happy, safe and prosperous 2013. We wish to thank our clients for putting their trust in our law firm. Rest assured, we will continue to give our very best in representing your brand in matters of Civil Recovery Law.

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January - February 2013

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Traffic Counting and Conversion Rate

Traffic counters are fast becoming a core store system, and if you haven’t gotten a call on them yet, don’t be surprised when you do. In fact, as a loss prevention professional who is looking to add value to the organization beyond just your LP expertise, perhaps you should be the one making the call to your operations and marketing peers.

store traffic counts, this campaign clearly delivered prospects, but what happened to sales? That’s where conversion rate comes in.

Since sales are a function of traffic count multiplied by conversion rate multiplied by average ticket, plugging the results into this basic formula would reveal that in-store conversion rates tanked, and that’s why sales were down. The good news—the advertising worked. The bad news—stores didn’t take advantage of the traffic.

Now how do you feel about the effectiveness of the promotion?

Conversion rate can also tell us something about how effectively we are targeting and reaching qualified prospects.

For example, a highly targeted advertising campaign might not result in a significant increase in overall store traffic volume, however, a measurable increase in conversion rates could indeed indicate that the campaign motivated more qualified prospects to visit the store.

The point is this—store traffic and conversion rates, combined with transaction data, provide retail marketers with the context they need to truly understand what impact their investments are having. Using sales and other transactional data as the primary measure of advertising and promotional effectiveness is inconclusive at best and potentially misleading.

Make Sure You Are Ready

continued from page 20

month, as well as last year’s comparative sales, results were embarrassingly underwhelming. Sales results for the day of the event were down 5 percent from the prior week and flat compared to the prior year. An analysis of the sales data showed that transaction count was down 5 percent and average ticket was flat. Based on these results, the big promotion was an unequivocal bust. Tragically, this is often where the story ends.

However, instead of relying on sales and transaction data only, if this retailer had store traffic data, they might discover that, despite sales being down, store traffic was actually up an eye-popping 20 percent compared to the prior week. Based on

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January - February 2013

While there are other business “whys” for traffic counters, I’ve just covered some of the most important ones.

Traffic and conversion are simple, but vital measures that every retailer can put to practical use. Basic traffic counters should be a core component of any retailer’s in-store system portfolio. It should be as pervasive as POS and LP systems.

Retailers who have traffic counters and use the data and insights that come from them effectively have a competitive edge over retailers who do not. It’s that simple.

So, the next time you get a call about traffic counters from a pushy store operations manager, a smart-alecky marketer, or even your mighty CIO, you’ll have a handle on why they are so interested in this data. They should be.

Traffic counters are fast becoming a core store system, and if you haven’t gotten a call on them yet, don’t be surprised when you do. Consider yourself armed. In fact, as a loss prevention professional who is looking to add value to the organization beyond just your LP expertise, perhaps you should be the one making the call to your operations and marketing peers.

MARK RYSKI is author of Conversion: The Last Great Retail Metric and When Retail Customers Count. He is also founder and CEO of HeadCount Corporation (www.headcount.com). Ryski can be reached at 877-463-7004 extension 222 or via email at mark.ryski@headcount.com.

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“I’m certified.

Here’s why.”

Sandy Chandler, LPC, CPP Regional Director, Loss Prevention Rite Aid Corporation

With the evolution of our profession, it is imperative that retail LP professionals become true business partners. Whether you are a seasoned LP professional or just starting out, the Foundation certification courses have valuable content to meet that goal.

These courses contain a wide range of subject matter that validates our ever-changing roles, showing how valuable our position is to our retail organizations. The LPC allowed me to become more proficient on some subjects not previously utilized. For example,

“I have a job.

Why do I need certification?”

Certification not only prepares you for the future, it helps you when you need it most—in your current job.

Certification refreshes and validates your knowledge base while teaching you critical business expertise to roundout your skill set. It not only covers key components of loss prevention, it teaches you solid business skills to prepare you for your next promotion.

“Yeah, but…”

“It costs a lot.” Certification is very affordable and can even be paid for in installments. It is one of the best investments you can make for yourself and will pay for itself over again as you advance in your career.

“I don’t have the time.” Certification was designed by seasoned professionals who understand the demands on your time.

The coursework allows you to work at your own pace and at your convenience.

Everyone is busy, but those who are committed to advancement will find the time to invest in learning.

“I’ve never taken an online course.”

The certification coursework is designed with the adult learner in mind. The online courses are built in easy-to-use presentation style enhanced with video illustrations to elevate comprehension and heighten retention.

“What if I fail?” Both the LPQ and LPC certifications have been accepted for college credit at highly respected universities, and as such, passing the exam demands commitment and study. However, the coursework includes highly effective study and review tools to fully prepare you for the exam. In the event you fail the exam, you can review the coursework and retest after 30 days.

“Okay, how do I get started?”

It’s easy to get started. Go online to sign up at www.LossPreventionFoundation.org.

If you need help or want more information, contact Gene Smith at Gene.Smith@LossPreventionFoundation.org or call 866-433-5545.

the compliance module enhanced my expertise, giving me an edge in our highly regulated retail environment.

In order to promote career knowledge and advancement, the Rite Aid LP department endorses both the LPC and LPQ courses, and selects key personnel every year to receive scholarships. Why?

Because these certifications provide the business skills necessary to maximize our contributions, not only within our department, but to impact the company on multiple levels, substantiating a higher return on investment and further advancing our industry through continued professional development.

SM

POWERED BY THE LOSS PREVENTION FOUNDATION

ACADEMIC VIEWPOINT

Self-Checkout: What Constitutes “Real” Customer Service?

Y

ou may have recently read news articles or heard about discussions regarding a growing debate over whether self-checkout is worth the investment. USA Today featured a piece last April 6 entitled, “Self-Checkout Lanes Boost Convenience, Theft Risk.” Soon thereafter, a discussion on the Retailwire blog appeared entitled, “Does Self-Checkout Cause Theft?” The theme in both focused around the cost-benefits of using self-checkout lanes in retail stores. More recently, I have had a number of conversations with LP executives who have admitted re-evaluating self-checkout in their stores.

After first being used in England, self-checkout slowly spread to the U.S., primarily in grocery and home-center stores. The logical rationale of this technology was that if customers could check themselves out, customer service would improve and labor costs at the front end would be reduced. The net results would be a win-win for the retailer, yielding higher sales, lower overhead, and greater net profits.

Now we are beginning to hear from those who are realizing that there is a hidden down-side to self-checkout that raises serious questions about increasing the use of this technology.

by Richard C. Hollinger, Ph.D. Dr. Hollinger is chair of the Department of Sociology and Criminology & Law at the University of Florida, Gainesville. He is also director of the Security Research Project, which annually conducts the National Retail Security Survey (soccrim.clas.ufl.edu/criminology/srp/srp.html).

Dr. Hollinger can be reached at rhollin@ufl.edu or 352-294-7175. © 2013 Richard C. Hollinger

However, after reading about the self-checkout debate, I remembered that my own retail career started in a grocery store before POS barcodes were developed. I knew our regular customers and often addressed them by name.

Unfortunately, according to some, the personal relationship element in retailing has been lost forever. One could argue that this loss of customer service is exacerbated by self-checkout and is not a good thing for either society or the retail industry.

Customer service is not always about checkout speed and the lowest price. Nor should we in loss prevention forget the deficiencies that self-checkout can create that allows or creates more shrinkage. Without adequate personal attention, the dishonest associate and shoplifter will always take advantage of weaknesses that we often ignore in our constantly increased reliance on technology, instead of people, to prevent loss.

Self-Checkout Continues to Grow

The research and advisory firm, IHL Group, estimates that self-checkouts will increase in North America by 10 percent in the next few years. They see the greatest growth in convenience, hardware, and drug stores. On the other hand, Malay Kundu, founder of StopLift Checkout Vision Systems, reports that users of their video analytic software are discovering higher theft levels…whether intentional or not…that are up to five times greater than checkouts that are completed by human cashiers.

I must admit that when I first found out that I could check myself out at my local home-center store, buy gas directly from the pump, and check myself in and get airline boarding passes before arriving at the airport, I was elated. Just think of the time that could be saved in my ever more complicated life. Buying items on the Internet without ever leaving home or closing my keyboard just seemed like “icing on the cake.”

For technology geeks like me, allowing machines to replace time-consuming human interactions in my life seemed like the natural evolution of technology serving mankind.

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January - February 2013

Removing Self-Checkouts

Mark Gaudette, loss prevention director at Big Y grocery stores headquartered in Springfield, Massachusetts, decided to take out all of their self-checkout registers over a year ago.

Although there were employee and shopper dishonesty issues occasionally related to problems at self-checkout stations, he insists that this was not the driving force behind the decision to abandon self-checkout. Instead, Big Y was most concerned that this regional grocery chain, which prided itself on delivering excellent customer service and personalized |

LPportal.com

human interaction with their clientele, began to notice that self-checkout was interfering with the very element of the retail experience that they prided themselves on most. In short, from reading website blog comments, they worried that they were turning valued customers into “part-time employees.” Moreover, evaluations of video transactions showed clearly that the self-checkout process oftentimes actually slowed down the checkout process. Coupons and “reward coins” that they encouraged customers to use were not easily processed at the self-checkout stations. This frustrated both employees and customers.

In addition, they found that their StopLift video analytics discovered many instances of incorrect scanning that could only be corrected with a well-trained human cashier at the checkout. In short, the self-checkout was slowing down and interfering with a quality shopping experience. This was the final straw and Big Y made the decision to put more resources in placing people interacting with their customers at the checkout. To Big Y this was what true customer service was all about, which leads to increased loyalty and repeat sales among their best clients. No machine could replace this valued attribute of their business.

Shopping Is Not Just Buying Things

No doubt self-checkout will continue to grow in all aspects of retailing. However, as my 90-year-old father always points out, “Shopping is not just about buying things.” To him it continues to be an important part of his daily life experience. The instant name recognition, exchange of good

wishes, and even hugs from those sales associates who have served him for years is the primary value that brings him back again and again to the stores that give him the best customer service.

Customer service is not always about checkout speed and the lowest price. Nor should we in loss prevention forget the deficiencies that self-checkout can create that allows or creates more shrinkage. Without adequate personal attention, the dishonest associate and shoplifter will always take advantage of weaknesses that we often ignore in our constantly increased reliance on technology, instead of people, to prevent loss.

Renew Your Subscription

THE VOICE OF LOSS PREVENTION LPportal.com | V11.5 September- October 2012

LOSS PREVENTION

MAGAZINE

Readers must renew their free subscription every three years. To be sure you continue to receive the magazine, go to myLPmag.com to renew your subscription, change your address, or sign up others in your organization.

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27

PARTNERING WITH RETAILERS

by Scott Sanford

Online Investigations—Partnering with PROACT Investigating online sellers can be much more efficient

Selling price Location and productive when pairing investigative skills with those of ■ Our inventory shortages and location vs. listings eBay’s PROACT Investigators. While criminals use many online venues to sell stolen goods, eBay has been the clear Internet ■T otal percentage of seller listings (current and closed) industry leader in working cooperatively and effectively with retail relative to our retail sector investigators to tackle this problem. Over the years, Barnes & Seller Noble investigations’ team has been productive, largely due to the ■ Feedback scores unique approach taken when addressing prolific shoplifting and ■ 90-day completed listings ORC activity; effectively taking the fight to the bad guys when all ■ Auction history the signs of criminal activity are present. If your bad guys happen ■ Location to be selling on eBay, a good relationship with the PROACT team is ■ Current listings of multiples invaluable as they can provide additional insight that may help ■ Selling categories guide you to successful resolution.

■ Auction history If your bad guys happen to Profitability Equation (backing out costs vs. reasonable cost) be selling on eBay, a good ■ Selling price relationship with the PROACT ■ Shipping costs (packaging and postage if free shipping) ■ Listing fees team is invaluable as they can ■ Commissions provide additional insight Understanding these elements paints a clearer picture of the seller and the likelihood, or not, of their involvement in criminal activities. that may help guide you to ■ ■

Scott Sanford is Director of Investigations and Training for Barnes & Noble, Inc.

successful resolution.

Online criminal sellers often telegraph their nefarious activities when listing items for sale. Listing items as “Brand New” while below your company’s cost is a sign the product could be stolen.

However, you must have a clear understanding of your merchandise lifecycle from purchase order through markdowns and mark out-of-stock. There are legitimate avenues a seller may use to obtain low-cost merchandise. Understanding those avenues and the specifics of the supply chain will help to reduce time spent chasing red herrings.

Barnes & Noble investigators use a multi-step “vetting out” process before making a decision to investigate and ultimately interview suspects. There are literally millions of sellers posting millions of auctions daily, so investigators must carefully choose the battles they fight. Spending precious time and resources investigating sellers before properly weighing the facts is counterproductive.

When conducted effectively, the entire vetting process can be accomplished quickly by a seasoned investigator. The attributes we evaluate prior to committing to an investigation are: Merchandise ■ Selling categories ■ Multiple quantities of the same item 28

We look for consistencies with pricing and product line to further support the likelihood of stolen merchandise. An experienced investigator can usually determine what legitimate venues could provide the seller with this product that allows them to sell it at such deep discounts online—a very important step; do not overlook.

Over the years, Barnes & Noble has identified and addressed hundreds of prolific shoplifters through a refined and efficient process that averages two to three days from start to finish. For those who have conducted such investigations, law enforcement partnership can be a challenge. Yet Barnes & Noble boasts an 80 percent prosecution rate due to a strict focus on dotting the “I”s and crossing the “T”s on the front-end. Any great investigator realizes the value of gaining intelligence and understanding the playing field.

Nothing complements a great case better than, first, a great written statement and, second, world-class report narrative and supporting documents, such as inventory records and incident reports, which are often pulled together after the interview.

The process itself is three-dimensional. How you package a case for law enforcement will most definitely impact the prosecution rate and future decisions by that same agency to accept your cases or not.

The relationship we share with eBay has helped to streamline our investigative process. We value this relationship and encourage all retailers to work together with eBay in closing cases.

January - February 2013

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LPportal.com

INTERVIEW

Managing LP and Safety in a Customer-Service

Culture A Conversation with Dennis Wamsley of Publix

By James Lee, LPC, Executive Editor

INTERVIEW

EDITOR’S NOTE: Dennis Wamsley is the director of loss prevention and safety for Publix Super Markets, Inc. He is a 2010 recipient of Publix President’s Award, which recognizes his commitment to diversity and leadership. Prior to joining Publix in 2005, he served in numerous managerial roles in both loss prevention and operations at Kmart Corporation.

Wamsley serves on RILA’s loss prevention steering committee, where he is vice chairman, and is a member of the board of advisors to the Loss Prevention Research Council. He is the chairman of the Florida Retail Federation’s law enforcement officer-of-the-year selection committee and is a member of the Florida Police Chiefs Association. Wamsley is a graduate of Montana State University.

EDITOR: How did you get started in loss prevention?

WAMSLEY: My first introduction to the grocery industry was the general store my dad owned in the small Montana town where I grew up. After college I started in retail as a management trainee at S.S. Kresge Company, which later became Kmart Corporation, and worked my way up to assistant manager, store manager, district manager, and then regional manager. One day I got a call asking me to come to headquarters and become director of loss prevention.

that we were really doing a lot of the same things, but we were just doing them independently of one another. It really made sense, and it was a good move on the leadership of Kmart’s part to put an operator in there because we could create some really good synergies, get a lot more done, and have a lot more success if we worked together.

EDITOR: And when did you make the move to Publix?

WAMSLEY: My first day was April Fools’ Day 2005.

EDITOR: Talk a little about the founder of Publix, and the culture he created in the company.

WAMSLEY: Publix was founded in 1930 by George Jenkins in the midst of the Great Depression, which was a pretty bold move on his part to open a store in that economic environment.

The attitude and approach that made him successful then are as important today as they were more than eighty years ago. Our mission statement sums it up nicely: “In order to be the premier quality food retailer in the world, we have to be passionately focused on customer values; we have to be intolerant of waste; and dedicated to the dignity, value, and employment security of our associates. We are devoted to the highest standards of

All of our associates share in stock each year, so the feeling of ownership definitely contributes to our mission as a company to provide premier service. On the LP front we always try to frame everything around helping the stores prevent and reduce their losses, without having any impact on customer service, without any impact on the quality of the merchandise or the selection of the merchandise.

30

My first reaction was, “You have got to be kidding me. Why would I do that? Why me?” They told me that they were making changes and thought that I would be good for the department. You don’t really say “No” to a request like that.

stewardship for our stockholders, and involved as responsible citizens in our communities.” Today we are a big company with more than 1,070 stores in five states. So, to live up to that mission statement, we have to be quality focused.

EDITOR: How did you manage the transition from the operations side to the LP side?

WAMSLEY: Coming from operations, I was already involved with my loss prevention team at the store level. But in those days the involvement was really asking, “How many shoplifters are you catching?” Today, that atmosphere has certainly changed, and rightfully so. But, as an operator, I didn’t know exactly what the LP group did, and the LP group didn’t really have a good understanding of what the operating group did. So, I found out

EDITOR: How does being a privately held company impact the LP mission?

WAMSLEY: All of our associates share in stock each year, so the feeling of ownership definitely contributes to our mission as a company to provide premier service. On the LP front we always try to frame everything around helping the stores prevent and reduce their losses, without having any impact on customer service, without any impact on the quality of the merchandise or the selection of the

January - February 2013

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LPportal.com

INTERVIEW

merchandise. We don’t have EAS systems. Although we studied EAS, it didn’t fit with our customer-service culture.

look at the operational aspects of the stores and specifically the policies and procedures that are designed to control losses.

EDITOR: When you arrived at Publix, what were some things that you saw early on that you felt you could change to make an impact on the LP program?

WAMSLEY: My first focus was on shrink numbers. While we were a successful company, there were things we could do better.

There was still money we were leaving on the table that we didn’t have to. At that time there was also a lot of focus on the theft aspects of the loss prevention program. Everybody knows you can’t catch your way to improved shrink results. So, we started to change the focus of the department from a reactive to a more proactive approach.

EDITOR: How often do you perform audits in your stores?

WAMSLEY: It really depends on how they score. We use a weighted scored audit. If a store scores 90 percent, they’re not going to see us as often. If they score below 80 percent, they will get a follow up probably within ninety days. If they score much lower than that, they will have a follow up within thirty days. It’s all based on what the opportunities for improvement are in the stores. We focus on the stores with the greatest opportunities to improve.

EDITOR: How have you organized the LP function within Publix?

WAMSLEY: We’ve followed the structure of our retail operations group. They currently have four divisions, and I have four divisional loss prevention managers who support those divisions.

While they report directly to me, I tell them, “You may report to me, but you better be working for your divisional vice president.”

We have a fairly small field staff, which is indicative of the supermarket industry. Each of the divisional managers has four or five regional LP specialists who are assigned to forty or fifty stores. We also have four or five LP auditors in each division, who

EDITOR: I suspect your audit encompasses more than just a traditional LP audit to include operational and expense issues.

WAMSLEY: That is correct. We’ve even folded in a lot of safety questions. Both our loss prevention auditors and our safety specialist focus on raising awareness. If a department manager is scoring low on their LP audit, we’re going to take the time to show them the right way to do things. And then we’re going to follow up to see if they did them.

Nobody likes the term “auditor.” People immediately think “IRS” with all kinds of negative connotations. We tell them that we’re the type of auditors who are there to find money and put it back in their pockets. Going back to the fact that our associates

LP Magazine | January - February 2013

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INTERVIEW

are also shareholders, we can make the case that, “Look, not only is this going to help your store, but it’s also going to help you and your fellow associates who are co-owners with you.” In effect, we are really sales people. We’re trying to sell our ideas to help them put more money in their pockets.

EDITOR: When you talk about shrinkage in food retailing, what goes into the shrinkage bucket that’s different from traditional retail?

WAMSLEY: In traditional retail accounting, companies have products with established selling values. For example, you have a television that’s valued at $297. If you lose that, you lose $297. That’s the way we look at our non-perishable grocery items. But for fresh and perishable items, it’s more complicated.

Some items we bring in and convert to other products. For example, in the bakery you buy flour and other ingredients that you turn into bread, which is produced fresh in our stores each day. Because we’re focused on delivering a quality product, we don’t sell day-old bread. We don’t sell reduced-price meat. If

unusual. The challenge becomes, “What’s an acceptable amount to throw away at the end of the day,” and “Can we save any money there without having a negative impact on sales, service, quality, or the selections that we insist on having?”

EDITOR: You said you don’t have EAS, but are there other technologies that you have put in place at Publix?

WAMSLEY: First, we implemented an exception-reporting tool that integrates with our POS system that we can throttle up or down to identify specific cashier activities, whether it is coupons or cash shortages, that allow us to focus in on certain individuals where we could have dishonesty or simply a training issue.

Following that we looked at our CCTV systems, which were totally analog at the time. We switched over to digital video recorders. Now we’re interested in pursuing IP technology for all of those systems so that we can eventually convert to remote monitoring. You’re always fighting that new technology wave.

The latest technology is always something better than what you have today.

Nobody likes the term “auditor.” People immediately think “IRS” with all kinds of negative connotations.

We tell them that we’re the type of auditors who are there to find money and put it back in their pockets. Going back to the fact that our associates are also shareholders, we can make the case that, “Look, not only is this going to help your store, but it’s also going to help you and your fellow associates who are co-owners with you.” it’s not fit to sell at full price to our customers, we’re not going to sell it at all. So what’s thrown away becomes part of the shrinkage numbers.

EDITOR: Is that product literally thrown away, or do you donate to food banks and organizations like that?

WAMSLEY: We do donate what we are able to through our perishable recovery program with Feeding America. But, for example, when you’re donating something that requires refrigeration, the organizations that we’re donating it to must have refrigerated transportation.

EDITOR: How do the donations affect shrink?

WAMSLEY: Donations are all counted as part of shrink, and that’s the same for whether it’s a grocery item or a perishable item. Really everything that we don’t sell at full retail price is counted in the shrink numbers, which is probably a little bit

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EDITOR: Are there any other technologies you’ve taken advantage of?

WAMSLEY: Our organized retail crime [ORC] taskforce uses a mapping tool to identify losses and try to track the criminals who are involved. Using cameras you eventually get a picture of a face, you get a partial tag number, and you’re able to do all kinds of things to then identify the criminals.

EDITOR: As a retailer with an ORC taskforce, how do you measure success and ROI on that investment?

WAMSLEY: We’ve had a lot of success in the five years that we’ve had our taskforce. But we can’t measure success by recovery rate because normally you don’t recover a whole lot of merchandise from these groups. Organized retail crime investigations take a long time to resolve. I think our average case runs between seven and eight months of investigative effort.

We don’t have a lot of people doing that. Each investigator is

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INTERVIEW juggling seven or eight big cases that they’re working on at all times. The one thing we can measure is arrests.

EDITOR: How many arrests have you had?

WAMSLEY: We only count arrests if they’re fence-level people because boosters…the people who actually come in the store and take the product…are so easily replaced. If we make an arrest on a booster today, they’re going to immediately have a replacement for that person, or that same person is going to be out of jail and back at it tomorrow, assuming they even go to jail. We try to use boosters that we catch to provide information on who they’re selling to. If they have a bad enough criminal record and are looking at some serious jail time, we can often get them to assist us. But, to answer your question, I think the number of fence-level arrests we’ve had is 249.

EDITOR: That sounds like a big problem.

WAMSLEY: It is a big problem that represents a lot of money.

We don’t value the cases ourselves, law enforcement values them for prosecution purposes, and they have put the number somewhere around $250 million. So, we’ve had really good success.

We are also proud of the fact that we work well with other retailers because, really, we’re never the sole victim in these cases. By combining efforts we can resolve cases a lot faster, plus you end up with a lot more evidence to present to law enforcement.

EDITOR: Over the years Florida has gained a reputation as a hotbed for ORC. Since you’re based in Florida, but you’re also in other states, do you find that to be true or not?

WAMSLEY: I do. Florida is probably our most active state in terms of ORC. And, even if it’s not organized retail crime, other types of schemes, like credit card fraud, always seem to crop up in south Florida and then move north. But, we also see lots of activity in Atlanta and South Carolina.

EDITOR: What are the sorts of targets that ORC groups are going after in your stores?

WAMSLEY: Right now it’s mostly the health-and-beauty items, especially razor blades. But this changes. You put one group out of business and your losses go down on one thing, but they pop up on another. We had a previous problem with infant formula.

We actually put a lot of those criminals out of business and in jail, but we’re starting to see that creep up again because it’s a crime of opportunity. It’s like any other type of business. Competitors in the underworld figure out, “Hey, this market is open. I’m going to take it over.” Other targeted items include teeth-whitening products, high-end facial creams, and stomach aids. We do have people who target meat and seafood, particularly shrimp, but, usually those groups are not as large as those that are targeting the health-and-beauty products.

EDITOR: I understand you recently took over responsibility for safety, correct?

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INTERVIEW

WAMSLEY: That’s correct. I picked up responsibility for safety about two years ago.

EDITOR: What are a few of the initiatives that you’ve put in place that are having a positive impact?

WAMSLEY: We started with a safety department that knew what needed to be done, but was held back by a lack of manpower. So, we recognized an opportunity to combine efforts and get more people talking about safety company-wide. I try to equate safety to our focus on customer service. If someone gets injured in a store, that’s not providing the best service. So, we’ve increased our focus on keeping both our associates and our customers safe.

EDITOR: How have you tackled associate safety versus customer safety?

WAMSLEY: It turns out it is a little bit easier to impact workers’ comp incident rates than general liability. Since you have associates who are reporting to you, you can train them to do the right things. We can tell them, “We can’t afford for you to be injured because you’re too valuable to our operation. So, here are some things you can do to work more safely and make sure you go home at night feeling as good as you did when you came in this morning.” Our workers’ comp initiatives have made really good improvement so far.

But…and I think this is true if you look across the whole industry…general liability has been more challenging. The more

litigious society becomes, the more people see it as an easy source of money. Still, we’ve seen those numbers start to turn downward, too.

EDITOR: Let me turn the discussion to your role as a leader in the industry over the last several years. Two organizations come to mind—the LPRC and RILA. Let’s start with LPRC. How long have you been involved, and what is the value that you get from the organization?

WAMSLEY: I’ve been involved with the Loss Prevention Research Council for about five years and serve as a member of the board of advisors. I think that it’s important for industry leaders to be involved in things like the LPRC and other industry organizations because loss prevention is really only successful when people band together to try to solve problems. I think the LPRC is unique in the fact that we get retailers and service providers together who are trying to solve the same problem. The atmosphere is such that it’s really a collaborative effort. As opposed to having a vendor try to sell you their solution to a problem, the LPRC turns the table and says to the service provider, “Here’s our problem.” And it’s not just one retailer, but several retailers saying, “We need a solution for this.” So, the LPRC represents a number of retailers, large and small, from different retail segments, who have a common problem and work with multiple providers to find and quantify solutions. continued on page 36

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EDITOR: The LPRC has something called “StoreLabs.” Do you have any Publix stores in the StoreLab program?

WAMSLEY: We do have a store in the StoreLab program, where we pretty much let them test anything there they need. They tested having a camera on the Crest White Strips that would page the manager when the product was gone. We were involved in putting messages and lights on CCTV to see if that affects theft. We’ve also tested using public-view monitors on razor blades in conjunction with their research on keepers and other product-protection devices. We are also involved in the offender interview project where the LPRC researchers interview shoplifters who are caught to gather information on how they respond to LP efforts, why they steal certain items, who they sell to, and things like that.

EDITOR: Are you involved in any other organizations?

WAMSLEY: Five or six years ago the Florida Retail Federation asked me to be a committee member on their panel that selects a law enforcement officer of the year. Two years ago I became chairman of that committee. It is one of the highlights of my year to go to Tallahassee to review the many submissions that have been sent in by the various law enforcement agencies in Florida and help select the winners. My getting to present that award to these outstanding law enforcement officers at the Florida Retail Federation’s awards banquet is truly the highlight of my year.

My Florida-based managers and I are also heavily involved with the Florida Police Chiefs Association. We attend their conferences and have developed very strong working relationships with that group. They’re anxious to talk to retailers about what we can do to work together to help prevent

We’ve had a lot of success in the five years that we’ve had our taskforce. But we can’t measure success by recovery rate because normally you don’t recover a whole lot of merchandise from these groups. Organized retail crime investigations take a long time to resolve.

I think our average case runs between seven and eight months of investigative effort. We don’t have a lot of people doing that. Each investigator is juggling seven or eight big cases that they’re working on at all times.

The one thing we can measure is arrests.

EDITOR: You also are involved in the Retail Industry Leaders Association. What is your involvement with that organization?

WAMSLEY: I’m excited to be a part of RILA, where I was recently asked to be vice chairman of the LP steering committee, a role that I was happy to take on. At RILA I get to work with Lisa LaBruno, who I think a lot of, and the other fine people there.

I also work with David Lund, who is the chairman for the next couple years. He’s a very dynamic leader in the LP industry. Of course, I’m a little bit biased here, but I think RILA really puts on a good conference. Their events over the last two or three years have just been outstanding. One of the things that RILA does well, and there are many, is they try to be inclusive to the vendors by opening up sessions to them. This allows the vendors to go in and hear what’s on the minds of the people who are potentially their clients. I think that’s a positive for them, which they should get a lot of value out of, and in turn that is a positive for the entire industry.

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problems. We very much appreciate that working relationship and will do anything to help that group out.

EDITOR: What other issues are these state associations involved with?

WAMSLEY: There’s been a major move nationally to raise the felony level for retail theft. We work closely with the Florida Retail Federation and the Georgia Retail Federation to try to keep that number low.

EDITOR: Why is that?

WAMSLEY: Because right now if the felony level is $300, criminals know that threshold and will steal $295. If the felony level was raised to, say, $1,000, they would steal $995 per stop. That would cause losses to retailers to go up dramatically. So, I think it is important for retailers to be involved at the state level on issues like this that can have a dramatic effect on retail losses.

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ASSOCIATIONS IN ACTION

by Rhett Asher Rhett Asher is vice president of industry relations for the Food Marketing Institute, where he is responsible for the association’s asset protection, risk, and safety initiatives, including the annual Asset Protection Conference, Supply Chain Council, and Technology Leadership Board. Asher has over twenty years of retail store operations and trade association experience, including management roles with the National Retail Federation, Loss Prevention Foundation, National Food Service Security Council, and the Retail Industry Leaders Association. He can be reached at 202-220-0774 or rasher@fmi.org.

Thinking Differently Is Your Greatest Asset

D

uring my years of working in various trade associations, I have constantly been asked by colleagues why I am on the phone all the time. I’m not sure if I know exactly, but I have an idea why.

As many of you know, I come from a retail background, I coach soccer, and I am very comfortable interacting with people. In retail we interact a lot, mostly with customers and fellow associates. Likewise, in coaching I interact a lot, mostly with the kids, their parents, referees, and other coaches. So, while I spend more time in an office or traveling, I find ways to channel my love of interacting.

All this interacting over the years has exposed me to many different people, cultures, and ways of looking at things. It has influenced and guided me toward always finding ways to encourage a greater exchange of ideas among the people in my surroundings.

Why? Partly because I enjoy and have a desire to find the value in “out-of-the-box” thinking and how it might help people become better contributors. Not only do I want to make a difference, I want to be different and stand for something different.

I will save the topic of “thinking differently” about coaching for another day, since that particular passion of mine could make for several articles. However, I will say that being a positive influence and mentor to kids these days may be one of the most important things we can do as adults. Kids today are more in need of positive roles models than ever, and I cannot think of anything more rewarding for me, personally.

However, as I continue to embark on my other passion, my career path with FMI, I find myself with a unique opportunity to do professional things differently; now more than ever. As a member of the FMI senior staff with broader exposure and responsibilities in multiple verticals within our membership, I am working to create a much deeper impact on our industry and build stronger bridges between industry executives throughout their organizations. I want to help better integrate organizational value and close some of the loops on how a company can really deliver top- and bottom-line value.

Over the past several years, I have encouraged the idea of raising the bar for executives in the asset protection function by supporting their climb to the C-suite. Through innovative conference sessions, certification programs, strategic leadership initiatives, and unique interaction with professionals from all walks of life, I continue to challenge the status quo of myself and my peers.

All of us should continue to question mediocrity and participation trophies in this industry. We need to lead a new approach to asset protection, risk, and safety; one which has a business mindset and helps current and future leaders concentrate on operationalizing their way of increasing profit by driving process efficiencies, collaborating,

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and challenging the way things have always been done. These and other various risk mitigation and safety strategies work together to help protect the organization’s most important assets—their people, property, and reputation. In my opinion, this is what defines a truly successful business leader.

Over the coming months, the FMI Asset Protection Council and the Risk and Safety Committee will work to do just that. Their focus will shift slightly toward a three-pillar approach—crisis management, future forecasting, and operational efficiencies, with an emphasis on strategy, training, and compliance. These leaders are already working to improve and drive the FMI value within our membership through more focused efforts in these areas. These groups have already embarked on several key project initiatives and have nearly completed the educational development of our third industry conference together, which looks to be our strongest yet.

The Supply Chain Council continues to challenge the way our supply chains operate and is working with their product manufacturers on several key initiatives. These professionals are thinking beyond traditional barriers and working to spearhead true industry collaboration, while driving efficiencies to new levels. Jointly, they are analyzing their distribution and transportation networks to identify occasions for a shared supply chain and investigating opportunities for sharing POS data in an effort to drive down inventory levels to support more flexible and frequent deliveries.

FMI also shares a supply-chain conference with the Grocery Manufacturers Association that is filled with educational sessions geared toward countless ways to think differently.

Supporting the entire organization with the means to integrate like never before is the Technology Leadership Council. This group of senior food retail IT leaders is working to provide business technology strategy though communication and continuous education at many of FMI signature events and other conferences.

They work to provide clear direction on technology solutions that will effect process change in all aspects of our retailing business and help us effectively engage the organizations both internally and externally, and through technology-enabled operational excellence and execution.

All of these groups regularly discuss benchmarking, best practices, what’s working, and what’s not as well as explore ways of adding value and improving their contribution to their organizations. As I communicate regularly with these very dedicated and engaged members, we discuss the various challenges and opportunities occurring in this industry. I find myself waiting for the opportunity to say—thinking differently is your greatest asset! |

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Feature

Asteya and the Attitude of Gratitude lululemon athletica’s Culture of Honesty and Integrity

By Erik Newcomb and Rich Groner

LULULEMON ATHLETICA EDITOR’S NOTE: The success of an employee awareness program at any company is dependent on matching the communication theme and substance to the company culture.

This article is an in-depth look at the thought process for how one asset protection department developed a very unique approach within an equally unique corporate culture. It also includes an alternative approach to deviant behavior that runs counter to the traditional approach used by many loss prevention organizations.

l

ululemon athletica is a yoga-inspired athletic apparel company headquartered in Vancouver, British Columbia. We operate two brands, 226 stores, and forty-four showrooms in Canada, the U.S., Hong Kong, Australia, New Zealand, and the U.K. Through these retail outlets we aim to create components for people to live long, healthy, and fun lives, and by doing so, keep people active and stress-free. Our product focuses on technical fabrics and functional designs, and we work with yogis and athletes in local communities for continuous research and product feedback.

As a culture, we are a group of people who seek to elevate the world from a place of mediocrity to greatness.

We do this through conscious effort and clear purpose, understanding that people in the world reach a place of greatness through creating their ideal lives in living a life they love. Our aim is to provide tools for people to achieve that life. We also believe in the inherent goodness of people, and that great people attract other great people through the law of attraction. We celebrate gratitude. We believe in yoga.

Our loss prevention philosophy is founded in the roots of Yoga, in the Sanskrit word “Asteya” (pronounced ah-STAY-ya), which translates from Sanskrit to “non-stealing.” While this concept can apply directly to merchandise in our stores, its broader and more powerful meaning deals with the way you relate to other people in your life. It is a daily practice. It is a way to being. It is a guiding alignment that all our decisions refer back to. But before getting into the details of how this works in a practical way, let’s take a step back and look at how we got here.

Where We Started

The asset protection department within lululemon began in a form that mirrored some of the basic approaches that many loss prevention departments use—theft prevention and shrink reduction through a combination of inventory result analysis, audits, internal and external theft deterrents, and a heavy policy and procedures framework. This approach was originally established and deployed at the corporate level with limited field resources and headcount. At the time we lacked budget, we were not fully plugged into the business strategy and decision-making process, and people had a misunderstanding of what we did.

The intent and tone of our original program contained a list of what to do, how to do it, and what would happen to you if you did something you weren’t supposed to do. But as we thought about this structure, the questions arose—what message does this send to the employee being trained? Are we trying to scare people?

Does this message really speak to the majority of our people? To this newly hired employee, what is her initial impression of how the AP department feels about her? Are we assuming from the first day that she will steal if given the right opportunity? If so, what

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does that cost us…the AP department and the company…in our relationship with her? Do we build rapport or create alienation?

In reflection, we had a message that was geared toward the dishonest actions of a very small minority of our people, yet was being broadcast to all of our people company wide. It was a message that wasn’t always relevant. In our culture of entrepreneurial store managers, it was often ignored or quickly dismissed.

Our first attempts at creating a new loss prevention awareness program at lululemon were met with varying degrees of success.

We tried to tie the new program more closely to our corporate culture by simply masking and reformatting our existing program and giving it a new name that literally included the word culture—the “Asset Protection Culture and Resource Guide.” We also partnered with a third-party solution provider to handle all investigations and audits. Our new approach was still heavily based on audit, policy and procedure, and it failed. It was still a message that was directed at those who might steal and, because this message was sent to everyone through our training, it treated everyone as that potential thief. At the end of the day we saw the traditional loss prevention norms, both philosophical and practical, were having an oil-and-water relationship within our organization. As an already small department within the company, we risked being further perceived as irrelevant to key business partners if we didn’t drastically adjust.

Our revised goal was to bridge the gap between what was the AP culture and what is the company culture. There needed to be shift, a complete disruption of what we held as “true facts” about how AP should work in a retail environment. We asked ourselves if we could create a message that spoke to all of our people. Instead of directing our AP training at the relatively small population that is likely to steal, what if we created a message that engaged all of our employees and came from a place of encouragement? What if we tapped into the inherent goodness that is already in our people and our corporate culture? More importantly, do we have the confidence to give up seeking more control over our stores and people through policy and procedure? And what if we looked to lower shrink through analyzing and elevating the behavior of our people?

Through this reexamination, we rejected the idea that the best way to lower shrink was through control; the idea that enforcement was key. We rejected the idea that we were inevitably surrounded by people stealing from us.

Instead, we embraced the fact that we work with incredible people and love our business partners. We believe that people are inherently good, and we treat them as such.

There is tremendous power in the idea that you’re in a relationship with people who live in honesty and are in the business of elevating the world around them. What all this comes down to is a focus on the behaviors that are driving individual action, both good and bad, rather than on the actions themselves. What if we can identify, coach, develop, and support situations that arise in the behavioral stage, rather than letting poor behavior progress to fruition and result in a potentially negative or dishonest action?

These questions and realizations were at the forefront of our minds as we developed the current AP strategy |

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LULULEMON ATHLETICA at lululemon. In order to drive this message, to bring our company culture and our ideas around behavior together, our AP department searched through the roots of our business and the roots of yoga. We found a message in which we could believe. We found “Asteya” and adopted is as our company philosophy and theme for a culture of honesty and integrity.

What Is Asteya?

Within the practice of yoga, there is the concept of the “Eight Limbs,” or paths, to pursue a happy and balanced life.

The Limbs give a framework for people to follow a tested structure for living a life you can love. One of those Limbs is known as the “Yamas,” or the moral restraints. Asteya is one of the five Yamas; again the literal translation from the Sanskrit language is “non-stealing” or “non-coveting.”

The connection from the concept of non-stealing to loss prevention seems simple and straight forward. We talk about Asteya because we don’t want our people to steal, thus causing shrink. But this is only a narrow interpretation of the concept, and it goes much farther than simply “don’t steal from the company.” Asteya is a way of being. It is a daily practice, and we always want to elevate ourselves and those around us and show people how to powerfully impact their lives.

talks about refraining from taking something that was not freely given to us, and emphasizes manifesting material things through honest and respectful means (through the law of attraction).

We learn through Asteya that everything we need in life is already within us. When we govern ourselves through the practice of Asteya, we will enhance our culture of honesty and integrity; thus naturally achieving our asset protection goals.

Examples of Non-Stealing

Let’s examine some possible applications of Asteya beyond non-stealing of money and merchandise.

Consider this example of respecting people’s non-tangible objects. If you’re working on a project with a coworker, and you later claim an idea from that project as your idea, when it was actually the other person’s, we would say that your actions are out of integrity and alignment with Asteya. By “stealing” the credit the other person is due, you are failing to recognize what they have earned, and you are taking more than you have earned out of that relationship.

Another example may be illustrative of respecting what you have earned in your own life. Imagine that you’re in a yoga class, and in front of you there is someone performing a difficult inverted posture, balancing on one arm, no sweat, and

Our loss prevention philosophy is founded in the roots of Yoga, in the Sanskrit word “Asteya” (pronounced ah-STAY-ya), which translates from Sanskrit to “non-stealing.”

While this concept can apply directly to merchandise in our stores, its broader and more powerful meaning deals with the way you relate to other people in your life.

We teach our stores that Asteya is a concept to find alignment with, not prescriptive rules or regulations on your actions. You want to set the idea of Asteya as an intention and then recognize when you’re out of character or out of integrity with that original intention and how it potentially impacts your behavior and decision making.

Thousands of years ago, the idea of non-stealing encompassed both tangible and non-tangible objects; all still things people have rights around. This concept could include someone’s time, someone’s joy, an idea that someone has, or something as simple as the space in a conversation for someone else to speak up. Asteya

she looks calm and serene. You have been practicing this same pose for weeks, yet you know that you can’t do that yourself, even after all of your effort. There are two ways you can react, internally, to what you’re experiencing. First, many people would approach it with a sense of frustration or entitlement.

As in, “I’m so jealous right now. It’s not fair. I’ve been going to this class longer and have worked harder. That person just started and can already achieve that pose.” What if, instead, you approach it through a lens of Asteya and gratitude? You say to yourself, “I haven’t earned that pose yet. I need to accomplish X,Y, and Z in my own practice before I can properly achieve that pose, and when I do I will feel even more fulfilled because I have earned it on my own and through my effort.” In this second approach, you recognize that the reward is not the pose itself, but the effort and dedication that it took to get there.

In the first way of experiencing the example above, you would be out of alignment with the practice of Asteya by failing in two regards—you are not giving proper acknowledgement to what she has earned, and you are not taking responsibility in your own practice for what you haven’t earned. Only by accepting 100 percent responsibility for where you currently are—in class, in life, at work—and

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LULULEMON ATHLETICA allowing others the recognition they deserve for where they are, can you begin to align with proper behavior. This example carries off the yoga mat as well, and can be applied to any work or personal life experience where we are in a place of judgment, particularly around the accomplishments of others.

The broader connection, or building on the concept, here is that once you realize what you currently have in your life is what you’ve earned, you realize that everything you need to accomplish anything you want is simply already within yourself (which connects to the further yoga teachings within the “Niyamas”).

By coming to this recognition of actual need versus perceived outside desires, you gain an understanding of how unnecessary it is to take anything at all from another person. If you imagine that everything you need to accomplish your goals you already have, but you also remember that you do need everything you have, then it follows that when you steal from another, you’re actually depriving them of their ability to accomplish their own goals. It’s not simply stealing what you’ve taken in the moment; it has a potential effect in the chain of life.

Asteya can also be expressed as sustainability in taking only that which you require, for if you take more than you require you are necessarily taking from someone else in a world with limited

The concept is first outlined for our employees in their orientation period. Then, when our AP personnel visit stores, we emphasize this message in training sessions on the floor through small examples, or though experiments that help our people examine their actions and behaviors. By showing people how Asteya actively fits into the framework of their personal experience, we can encourage people to begin to use it as a guiding principle in their lives.

Once people are enrolled in what we’re trying to achieve, and see the benefits it brings to their life, you can expand the depth of their knowledge and curiosity by challenging them to think critically about applications of concepts in the work setting, rather than asking them to repeat procedural dogma.

A Philosophy vs. a Policy

While Asteya is our asset protection philosophy, it is not our asset protection policy. A policy is “signing the deposit slip” or “setting the alarm,” and those things exist in our department, but they are separate from the practice of Asteya. It’s also important that we, as a department, do not take a general set of policies, procedures, and guidelines that we develop, and then group those things under a yoga-sounding term. It’s the other way around—all of our actions

We rejected the idea that the best way to lower shrink was through control; the idea that enforcement was key.

We rejected the idea that we were inevitably surrounded by people stealing from us. Instead, we embraced the fact that we work with incredible people and love our business partners. We believe that people are inherently good, and we treat them as such. resources. An example could be looking at limited meeting room space in your corporate office. Do you find that people book recurring meetings when they might not always need a room, or maybe people forget to cancel meeting rooms when they cancel with the individuals? In a sense, they are stealing the ability for people to have a private and quiet workspace with their peers.

The further impact of this is immeasurable. Now that meeting space is not available, it either prevents work from getting done or pushes meetings into common space. Does that now serve as a distraction to those trying to work quietly at their desk? Does it create a new sense of frustration, or entitlement, for people who have to experience loudness due to a meeting now happening near their desk? What further negative actions from that frustrated employee could now result because of the failure to practice Asteya and respect the limited availability of meeting rooms in the first place? When you examine the more complicated costs of small decisions you make, you see why it’s so important to have integrity around the little things.

A challenge with an abstract concept like Asteya is keeping the ideas and motivations behind it active in our stores. There’s no direct measurable you can assign to judge performance or success. One way we’ve found success is by an enrolling period, where we discuss the background and the “whys” to the approach, and then follow-up conversations.

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must have their genesis in the concept of Asteya in order for it to be our authentic philosophy. We must teach and practice the concept of Asteya in the authentic meaning of the term, not use a fancy yoga term to bundle up otherwise mundane prescriptions.

To help make this distinction clear, we use the diagram shown on the next page in training. The idea is to present our main themes of AP culture—Asteya and gratitude, underlined with integrity, as working with, but not the same as the asset protection department in the company (associated with keys, locks, alarms, sensors). It is easy to collapse all of these concepts into one sentence and say something like, “Asset protection at lululemon is the practice of

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LULULEMON ATHLETICA

While Asteya is our asset protection philosophy, it is not our asset protection policy. A policy is “signing the deposit slip” or “setting the alarm,” and those things exist in our department, but they are separate from the practice of Asteya. It’s also important that we, as a department, do not take a general set of policies, procedures, and guidelines that we develop, and then group those things under a yoga-sounding term.

Consider the second alternative approach. What if we can remove negative behavior…everything from missing signatures on bank bags to internal theft…by simply recognizing great behavior and encouraging more of it? What kind of atmosphere does that create?

We know that it’s possible, and in addition to aligning with Asteya, we teach the “Attitude of Gratitude” to accomplish it.

The Attitude of Gratitude vs. Entitlement

Asteya, which means we always have integrity with ourselves and live lives full of gratitude, thereby attracting other great people.”

The reality is that each of those four concepts—asset protection, gratitude, Asteya, and integrity, all operate in different ways, with different definitions, and if we combine them into one general lump of culture, we lose the power they have individually. Instead, we want our people to have an understanding of each as its own concept and having its own power, and then understand where each concept crosses over and supports another.

Working with the Inherent Goodness of People

We believe in the inherent goodness of people, and this guides our behavior toward people. So, let’s look at two ways to alter undesirable behavior in others—(one) punishing undesired behavior versus (two) celebrating a behavior that pulls in an opposite direction of the undesired behavior.

With the first approach, you are creating a fear of an action and an associated punishment. And while this can correct behavior in an individual instant, does it have a long-term effect? Also, consider the cost to the department when AP is issuing the punishment or correction. The department is associated with that punishment, which can create an adversarial relationship between the store operators and field AP team.

In addition to our culture of Asetya, we examine at a behavioral level the impact of the positive emotion of gratitude versus the negative emotion of entitlement, and their respective impacts on the age-old industry challenge of stopping theft. Can reinforcing positive behavior replace “control” over employees or scare tactics? How can we talk to employees about theft in a way that excites them?

To stop theft through behavior you have to examine what is the core behavior inherent in the act of stealing and negate it. If you think about any sort of stealing—a kid stealing candy, a teenager stealing a DVD, an adult committing insurance fraud—all of these actions have entitlement at their core. In some way, each of these scenarios has a person who feels they deserve something they have not earned. Entitlement is at the core of theft behavior, and the acknowledgement of this is central to our training philosophy.

To reduce entitlement we can’t simply go around and yell at people to stop being entitled; that only serves to put people in a defensive mindset and builds animosity. If you want to get rid of entitlement, you need to establish a culture that holds an opposite emotion as a core value. That’s where gratitude comes in.

Gratitude is a celebration of what you have, not what you want. Gratitude is thankfulness for what is in your life and is a focus inward toward that which is present. Gratitude is abundance, wholeness. Gratitude is recognition of the fact that everything you currently have is exactly what you need to accomplish whatever it is you’re after. Gratitude is the absence of expectation.

You can only hold on to one emotion at a time. If you set your intention toward gratitude, it will pull you away from entitlement. It is impossible to live in the entitled mindset if you truly have decided that gratitude is a core value for yourself.

A dedication to a grateful life doesn’t mean you’ll never find yourself in a place of entitlement, and it is important to realize this. You don’t need to be afraid of entitlement; you simply need to be able to recognize when you are in that state.

For example, is my anger with traffic because I feel entitled to having my own lane when everyone else has to get to work, too? The great thing about recognizing the state of entitlement is that through that recognition you pull yourself out from it.

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LULULEMON ATHLETICA Part of the definition of entitlement is that you do not realize you’re acting entitled. If you recognize it, you’re out of it and can move back to your dedication to a grateful life.

Here’s the great thing about focusing an asset protection department around training gratitude-related concepts—it’s fun, it’s inspirational. People genuinely enjoy setting aspirational personal goals and living a life that is full of gratitude. Need convincing?

Imagine you’re working in a store or office with thirty other people.

What does that environment look like if everyone is living in entitlement? Do you want to be there? Now, what does that same place look like if everyone is committed to gratitude? What else is now possible that wasn’t when everyone was living in entitlement?

We know entitlement and difficulties will naturally arise in people’s lives. Knowing that, our goal is to create a culture of gratitude (which starts with the law of attraction and attracting inherently good people to the brand in the first place), so that when those negative feelings arise, we leverage the inherent goodness within our people and naturally offset the behavior before it turns into action. Think of a teeter-totter where entitlement is never strong enough to offset the gratitude, or a glass ceiling where as entitlement climbs, it bumps into the glass ceiling of gratitude and can no longer proceed, thus not transforming into negative or dishonest actions.

When these behaviors become apparent, ideally we can identify, support, and fix things in a behavioral place before they turn into action that has repercussion to both the individual and the company. Let’s say someone is consistently late to work. Many organizations might issue a written warning saying “don’t be late again or else [blank].”

Within the context of Asteya and the attitude of gratitude, we ask the question, “What is the behavioral reason why this person is arriving late?” Somewhere in their own rationalization they are making the internal decision that it is okay to be late over and over again. Do they have a sense of entitlement that says, “It’s only retail, so I can be late.” Or maybe “I stayed late yesterday and worked overtime when I wasn’t supposed to, so I’m going to come in late today.” Maybe its the frustration of “I didn’t get that promotion, so I’m going to show them and just come in when I feel like it.”

In any of these scenarios, the employee has created a real rationalization in their mind that says it’s okay to be late. At this behavioral point of inception, it is neither right nor wrong; it is real in the moment for that employee. Our goal is for managers to identify when someone is out of their normal character. To identify when the behavior is off, and then seek to understand why. Why do they think this way? What can we do to help,

If you think about any sort of stealing—a kid stealing candy, a teenager stealing a DVD, an adult committing insurance fraud—all of these actions have entitlement at their core. In some way, each of these scenarios has a person who feels they deserve something they have not earned. Entitlement is at the core of theft behavior, and the acknowledgement of this is central to our training philosophy.

Behavior Is Proactive Theft Prevention

People who steal have to come up with an internal rationalization for why it is okay for them to steal. This rationalization is based in entitlement. Entitlement will show up as a behavior, or as an emotion in someone who is going to steal, long before they commit the crime. You can’t flip on an entitled mindset, steal something, and then turn it off. It is an emotion that lives deep inside and seeps out in small, but noticeable ways.

If you talk with a manager who has had an employee steal from them, one would bet that manager will be able to pinpoint where the dishonest employee acted from a place of entitlement long before the theft was discovered. Was it frustration? Was it anger? Was it a sense of deserving that manifested itself into many noticeable behavioral traits in the workplace?

Teaching our store managers to look for entitled behavior is an incredible tool in reducing internal theft, but you can’t do this because you want to prevent internal theft. To be effective, the training has to come from a place of authentic interest in gratitude and what it can accomplish for people. From this place people will happily adopt it as a life stance, and when someone is in that grateful stance of life, entitled behavior in others becomes unacceptable and immediately apparent.

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January - February 2013

To view a video from the lululemon Asteya awareness program, visit the EyeOnLP page on the magazine website (EyeOnLP.com).

support, and develop this situation to a better outcome, rather than have it potentially turn into a negative situation?

The same can be applied to external theft. The challenge in which we enroll our managers includes how do we spread gratitude to all of our guests? How do we create such a fun kitchen-party type feel in each store where it creates such positive individual attention and personal connection to the brand that guests would never want to |

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LULULEMON ATHLETICA steal from lululemon in the first place? Can we create this sense of gratitude for the brand in the majority of the guests and our communities because of what it offers to them in their personal lives, which is far more reaching than simply the clothes we sell?

A Consistent Way of Being

In the end the only way this training will work is if it is consistent with what people are already inclined to believe, what they support in the lives of others, and something they are interested in learning more about. As trainers, we have to realize this, and act accordingly.

For us at lululemon, this whole process starts with what we call the “Law of Attraction.” The law of attraction isn’t a loss prevention concept, but a core belief of the company. It operates at every level of hiring, training, identifying business partners, and community involvement. With the law of attraction, we believe that great people attract other great people, and it is imperative that you actively pursue the goal of surrounding yourself with amazing people who inspire you to better yourself.

Consider this—what does it look like if you don’t hire someone because she fits a position or a list of qualifications, but hire someone with an inherent characteristic that inspires you to greatness? This chain of practice is core to our business and creates the environment that allows our culture to thrive.

The development of ethical behavior as a business model starts with this law of attraction and flows through all subsequent training and goal setting. It is a model of setting an intention in a positive direction and letting that intention guide all future actions.

This allows the inherent goodness of our people to spill forth, and this is displayed every day through their thoughts and actions.

Asteya is a channel for this thought and action, reinforcement to an original intention. Asteya is a framework placed over the behavior our people already recognize as the proper course of action. Through the practice of Asteya, through its framework, we can naturally achieve our asset protection goals.

ERIK NEWCOMB is director of asset protection for lululemon athletica. He was instrumental in creating and implementing the company’s asset protection program for lululemon in the roles of AP regional and area managers before his recent promotion to director. Prior to joining lululemon in 2009, Newcomb spent seven years in store operations and a variety of LP positions at Abercrombie & Fitch. He holds a bachelor’s degree in economics from the University of Michigan and currently resides in Vancouver, B.C. Newcomb can be reached at 604-732-6124 extension 4893 or enewcomb@lululemon.com.

RICH GRONER is regional manager of asset protection for the East Coast of the U.S. for lululemon athletica. He was instrumental in creating and implementing a number of AP programs for lululemon, developing the core concepts and standard operating procedures for the program, as well as taking a major role in the training of the growing department. Prior to joining lululemon in 2010, Groner spent seven years working in various roles in LP for both Abercrombie & Fitch and Beall’s Inc. He holds a bachelor’s degree in philosophy from Washington & Lee University and currently resides in New York, NY. He can be reached at rgroner@lululemon.com or 917-621-7222.

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EVIDENCE-BASED LP

by Read Hayes, Ph.D., CPP Dr. Hayes is director of the Loss Prevention Research Council and coordinator of the Loss Prevention Research Team at the University of Florida. He can be reached at 321-303-6193 or via email at rhayes@lpresearch.org. © 2013 Loss Prevention Research Council

Opinion vs. Fact A

s the old saying goes—“We are all entitled to our own opinions, but not to our own facts.” This column emphasizes how the best path to improving the impact of loss prevention or asset protection programs is by developing enough research findings to support real, evidence-based practice. LP practitioners require good operational how-to concepts plus cross-sectional and experimental research evidence to better diagnose and treat the myriad of dangerous and costly problems retailers face daily.

Many retailers and solution partners are doing small tests, but many of these tests are not rigorously designed or executed, and most are never peer-reviewed and reported. But because of the incredible efforts of over thirty-five retailers driving the LPRC now, and many others, we’ll get there.

Best Practice vs. Evidence-based Practice

I took the following example from an evidence-based medical publication (Yokl, 2010) to illustrate the difference between anecdotal and evidence-based practice: “Do you see the difference? Anecdotal or loosely based evidence, even if reported by hundreds of practitioners, doesn’t make a best practice legitimate. Do you remember when it was believed that almost all stomach (or peptic) ulcers were thought to be caused by stress? Now, we know with certainty, based on rigorous evidence-based research in 1982 by two Australian scientists that 70% to 90% of peptic ulcers are caused by bacteria.

“It’s interesting to note that John Lykowkis, a general practitioner in Greece, believed peptic ulcers were caused by bacteria in 1958, and then treated his patients with antibiotics, which is now an evidence-based best practice. But he never did

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the rigorous evidence-based research to prove it. Unfortunately, he left the rest of his colleagues to figure it out for themselves.”

Believe it or not, for decades most physicians refused to believe clean hands prevented infection. It wasn’t until randomized controlled trials were published in the late 20th century that doctors started washing their hands before surgery.

And so it is in our discipline. Many retailers and solution partners are doing small tests, but many of these tests are not rigorously designed or executed, and most are never peer-reviewed and reported. But because of the incredible efforts of over thirty-five retailers driving the LPRC now, and many others, we’ll get there.

What Happens Over Time?

One concept our LPRC and University of Florida research teams take into account in innovation and evaluation projects is that of the role of time and behavior. Time is so critical in crime and loss control. It takes time for crime prevention measures to take effect (reach therapeutic level) since offenders need to personally or otherwise learn of their presence and mechanisms of action. And if the protective measures are perceived effective, the word has to spread out there. So, we have to be patient, and we need long-term studies to better calculate these timelines and their causes.

Time also reveals how criminals react to our countermeasures.

We’ve discussed the concept of crime displacement. Prevention treatments can convince offenders to alter their target, timing, location, and methods rather than just desist. Many studies show this type of crime movement is common, but not always as common as the opposite effect called diffusion of benefits, or the halo effect where offenders mistakenly believe other items and places are similarly protected when they really aren’t.

A longer term effect of crime and loss control efforts may also lead to adaptation where offenders learn of protective measure design or execution flaws and adapt their behavior accordingly.

We can all pick our favorite LP measure that is no longer as effective as it used to be since cynical bad guys found out or heard the thing doesn’t work, is a bluff, or employees don’t enforce it. There is more to come later on our research that is taking the effects of time on LP programs.

Impact 2012 Conference Highly Rated

It’s really tough to improve on certain things. Our annual Impact conference is far from perfect, but this past year’s

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conference…our eighth…was rated better than ever by the over 120 executive participants. Here’s some of what we did and learned at the 2012 Impact conference.

John Voytilla, vice president of global LP and CSO of OfficeMax, facilitated a wide-ranging panel discussion on using innovation to address upcoming issues and challenges. The panel participants were Brand Elverston from Walmart, Dr. Richard Hollinger and Dr. Steve Kirn of the University of Florida, and Ned McCauley from Tyco Integrated Security. The panel looked at building LP staffs with the needed skills to handle the diversity and complexity of the expanding asset protection role, as well as technology needs and how to get there.

Several of our working group leaders briefed the attendees on what has happened and is planned in the future. After the briefings, attendees separated into individual meetings of the working groups to brainstorm 2013 objectives and processes. The briefings and breakout meetings were headed by the following individuals: ■ Packaging Innovation Working Group—Shannon Hunter, OfficeMax; ■ Benefit-Denial Working Group—Tim Fisher, Best Buy; ■ Predictive Analytics Working Group—Carlos Bacelis, Sears Holdings; and ■ Video Analytics Working Group—Ahmad Lightfoot, T.J.Maxx.

Walmart’s Dain Sutherland outlined how LPRC uses the “SARA” problem-solving model followed by a short exercise.

The SARA model was discussed in depth in this column in the November-December 2012 issue (page 50).

A major focus of this year’s Impact conference was the presentations and breakout groups on the so-called “digital journey” led by Don Burkett of Sears Holdings and Ed Weiser of Motorola, and mobile POS let by Katie Freiday from The Home Depot.

A number of roundtable discussions on research ideas on a variety of subject areas, including data analytics, video analytics, alarm management, RFID, merchandise protection, loyalty programs, online fraud, safety and environmental integration, and LP hiring practices.

Several recent LPRC research results were discussed including: ■ Predictive analytics—Overall shrinkage and key shrinkage factors, shrink symptoms, parking lot crime, and burglary.

■ Manager confidence open-access study.

■ StoreLab—People counting, infant formula protection, and spirits protection.

Danny Sorrells from Walmart also facilitated roundtable discussions on best practices surrounding talent recruitment and development, as well as on what customers are saying about asset protection.

Finally, the participants interviewed active amateur and professional theft offenders on stage and in a StoreLab mock-up in the University of Florida ballroom facility.

This year’s Impact conference was a great success due to the incredible content and logistics planning led by Shannon Hunter and the LPRC’s Corrie Tallman, as well as so many others who contributed and participated. We look forward to implementing the research activities the group identified in Gainesville. If you did not attend the 2012 conference, please consider not missing the 2013 event in October. Watch for the exact dates to be announced soon.

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The Right Combination

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Feature

Mobility And Cloud Computing

THE IMPACT OF EMERGING TECHNOLOGIES ON LOSS PREVENTION

By Phil Belena and Richard Marino

Mobility and Cloud Computing

I

nformation is the retailers’ key to competitiveness, but existing retail IT systems are becoming a barrier to innovation. In particular retail has been slow to capitalize on rapid improvements in mobile technology, virtualization, and social networking, and the industry runs the risk of falling further behind.

As retailers look to these new technologies to regain a competitive advantage against the competition, it is crucial that loss prevention organizations be aware and recognize the emerging IT trends. By staying current with innovation, such as the capabilities and offerings of mobile solution providers, LP professionals will no longer find themselves in the role of road blocks or being forced to catch up to new technologies, but instead can get involved earlier in the process, be proactive in addressing potential risks in the advance of technology implementation, and help to drive the implementation and use of new technologies.

This article examines the current state of retail IT and how cloud computing can be used to remove current IT barriers, all the while examining how loss prevention can help mitigate the downstream issues and risks that newer technologies such as mobility present. Through an improved understanding of

technology, earlier involvement in the technology process, and by leveraging new technology to support initiatives, LP professionals can begin to reduce the negative impact new technology has on their departments.

Current State of Retail IT

First let’s look at how existing IT is becoming an obstacle in retail by considering several, perhaps familiar, scenarios.

Loss Prevention. The loss prevention department is advocating a new auditing system that allows staff to perform incremental audits of small sections of the store during business hours. Cycle count and on-hand reporting can instantly validate a suspicion of inventory discrepancies

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or theft activity when mobility is utilized. Loss prevention departments will have a role in the physical security of the hardware and the processes and procedures to control the mobile devices. However, this type of auditing system would require headquarters to have an up-to-the-second view of inventory at the stores, which can currently lag by hours in the current IT environment. Furthermore, the mobile scanning hardware doesn’t easily integrate with your current inventory system.

Customer Engagement and Retention. A customer walks into a store looking for a particular item, but that item is out of stock. Another store nearby might have the item and, although the associate would like to help, they cannot definitively direct the customer to the neighboring store.

Perhaps the customer leaves disappointed, or worse, finds the item at a competitor, all because the inventory management system isn’t updated in real-time, leaving the associate in the dark as to the true availability of the item.

Multichannel Integration. A customer sees an enticing gift on your company e-commerce website. She wonders if she could order the item online and have it wrapped and ready for pick up at the mall store, but cannot because e-commerce and brick-and-mortar channels are run as separate entities, and integrating the two would require a costly and risky investment. The mobile applications needed to support such integration are simple to develop, but the ROI for such a project is difficult to quantify, so the project often remains a tantalizing, yet elusive prospect.

Mobile Point of Sale. Mobile POS has been successfully executed at Apple stores and, with mobile POS technology, customer engagement has been shown to increase sales and improve customer loyalty. You would like to take advantage of this new technology to drive your own sales and improve loyalty, but your IT staff has told you to shelve the project

Information is the retailers’ key to competitiveness, but existing retail IT systems are becoming a barrier to innovation. In particular retail has been slow to capitalize on rapid improvements in mobile technology, virtualization, and social networking, and the industry runs the risk of falling further behind.

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Mobility and Cloud Computing until next year because your POS vendor says there’s no way to try a mobile experiment without an expensive up-front investment. In addition, your IT staff, already stretched thin, is too busy responding to help-desk calls to engage in strategic initiatives.

Real-Time Reporting and Business Intelligence.

Your merchandising and operations departments have been clamoring for enterprise-wide business intelligence that could give everyone in the organization up-to-the minute sales data, but the organization is slow to move forward with such a project since Cognos or Business Objects is potentially a multi-year, multi-million-dollar proposition.

All these examples involve extending existing IT with an incremental new feature. Implementing real-time, chain-wide inventory views; integrating e-commerce and store channels; introducing mobile POS or branded mobile apps; and deploying real-time business intelligence are each relatively simple projects from a technology perspective. But in practice any one could become a complex and risky multi-year endeavor costing tens of millions of dollars. The store processes and controls to manage each new feature will need to be developed and implemented to ensure success.

By understanding the technology and direction of the company strategy, loss prevention can assist with establishing a baseline for the current state of technology and then measuring the impact as the new technology is rolled out, using such

existing tools as risk classifications, predictive modeling, and performance scorecards. Additionally, LP organizations will want to be involved from the start in addressing logistical challenges, such as how to issue customer receipts and how to process a customer return when mobile POS is deployed in your store. Finally, the deactivation of EAS tags and removal of product-protection devices, such as spider wraps and keepers, will be unique processes and require innovation that LP will want to be involved with when putting mobile POS technology in place.

Why IT Is a Barrier to New Technology

Why is extending retail IT so complicated? The main reason is historical—retail systems have evolved in piecemeal, ad hoc fashion over decades. Key components, such as inventory, supply chain, POS, CRM, and reporting, have been added one on top of the other, from different vendors, on an as-needed basis. Each of these components exists as a distinct, siloed entity. Each has its own, usually closed interfaces, must be managed separately, and requires distinct skill sets. Adding a new subsystem, for example e-commerce, usually means integrating with a number of existing and closed subsystems, such as inventory, CRM, reporting, and sales audit to name a few. Thus a relatively minor addition can mushroom into a massive, costly integration project that requires the cooperation of the respective vendors for each subsystem. Every new

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Mobility and Cloud Computing extension creates more integration points. It’s not uncommon even for a small retailer with eight stores to have ten or more integration points. It’s often simpler, safer, and cheaper to replicate logic and data than to integrate. This is why many multi-channel e-commerce systems don’t share CRM, inventory, or transactional data with their brick-and-mortar counterparts.

But replicating logic and data comes at a cost. For one thing, replicating logic is expensive. A change in business process in the brick-and-mortar enterprise could also imply an attendant change in the e-commerce platform. Replicated data means that the enterprise loses a cohesive, unified, and real-time view of the enterprise. So batch-mode processes are built to synchronize the various subsystems. This problem is exacerbated in retail because the stores run register servers,

By staying current with innovation, LP professionals will no longer find themselves in the role of road blocks or being forced to catch up to new technologies, but instead can get involved earlier in the process, be proactive in addressing potential risks in the advance of technology implementation, and help to drive the implementation and use of new technologies. which are closed, vertically integrated devices, that must be periodically synchronized with the latest inventory and pricing data. Conversely, the registers must also periodically update the central systems at headquarters. For this reason, few components in a retail system ever have the latest data.

This leads to highly unreliable, unmaintainable systems where each subsystem or batch process is a point-of-failure that can disrupt the entire enterprise. Furthermore, this architecture isn’t easily extensible. Upgrading all registers at a 500-store chain to support rewards cards, for example, can become a multi-year endeavor. Finally, it’s worth observing that retail IT imposes a substantial operational burden. Managing a complex network of geographically distributed hardware and software requires specialized skills that are increasingly hard to

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find in retail enterprises. Consequently, the mission of many a CIO has become avoiding catastrophe, which means strategic initiatives are simply off the table.

To summarize the current IT environment, retail is handicapped with information systems that are unreliable, unscalable, non-extensible. These systems are a barrier to innovation, competitiveness, and productivity. With knowledge of new technologies, loss prevention can plan ahead as a technology such as mobility is introduced to a greater degree with each passing quarter. Loss prevention can become involved in the planning discussions to stay ahead of fraud and loss prevention issues and begin to look at mobility as any other asset to protect.

Cloud Computing—An Emerging Alternative

Cloud computing offers a way forward when compared to the current approach to adding new IT solutions to your business. In a cloud-based environment, software runs on vast, scalable data centers on the Internet that are accessible from any web browser, tablet, or smartphone. Instead of buying servers, specialized hardware such as cash registers, software and maintenance licenses, and training staff to manage it, cloud applications are bought as a service, which usually carry a monthly (or yearly) per-user fee. There is no upfront investment in software and, in most cases, the hardware investment is minimal because cloud software is accessible from consumerized web browsers.

Cloud-based applications for managing retail enterprises range in size from just a couple of stores to multinational chains with hundreds or thousands of stores.

These applications can unify the full spectrum of retail

January - February 2013

continued on page 56 |

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There’s something for everyone.

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GAYLORD PALMS RESORT & CONVENTION CENTER ORLANDO, FL

SOLUTIONS PROVIDERS

The Retail Asset Protection Conference provides countless Diverse Attendance. Forward-Thinking Helping today’s asset opportunities to work together Educational Content. Opportunities for protection executives address to achieve the common goal Collaboration. Innovative Solutions. tomorrow’s top challenges. of advancing the retail asset The Exhibit Hall at the Retail protection industry. Roundtable discussions, Asset Protection Conference will showcase open forums and networking opportunities the latest cutting-edge technologies used allow executives to step outside the box to tackle emerging industry challenges. See to share ideas and learn from their peers, it for yourself. working together toward a common goal of advancing retail asset protection.

With more than 35 sessions led by seasoned executives whose experience and expertise span the full spectrum of asset protection, there’s something for everyone.

TRACKS FOR THE 2013 CONFERENCE INCLUDE: • • • • • •

Investigations Leadership & Development Audit & Analytics Strategy & Planning Technology & Innovation Workplace Safety

Make plans to join us. Register at www.rila.org/ap.

Mobility and Cloud Computing

The opportunity to develop the audit processes in conjunction with the technology in advance of rollout is less time consuming and frustrating than having to play catch up after the technology is rolled out. Additionally, building the plan for the physical security controls required for mobile technology and the training to understand the technical impacts of mobility before rollout will reduce the risk for loss or needless exposure.

The other end of the proxy connects to the data centers that reside in the cloud. The proxy updates the cloud-based system with any changes that happen at the retailer and vice versa. Thus the legacy system and cloud applications are always up-to-date and can operate in parallel.

Consider a simple use case where the retailer seeks to experiment with mobile POS in its stores. Each piloting store will have two or three tablet devices equipped with barcode and credit-card scanners. Since cloud-based systems can integrate with many existing systems, such as JDA or Epicore, the integration effort is minimal. It can be accomplished in less than three months, and typically costs less than $300,000.

Better Security, Less Exposure, Less Loss

Understanding the technology behind cloud computing will allow loss prevention to better understand the ways in which the technology can help reduce risks and exposure.

Some cloud architectures can significantly reduce credit-card exposure and reduce loss at stores. In many

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functions—inventory management, CRM, supply chain, mobile point of sale, business intelligence reporting, and multi-channel—into an integrated package on the cloud.

With cloud-based systems, all components are integrated into a single package and all the logic and data resides in one place—in the cloud. In traditional retail installations, logic and data is situated in applications from multiple vendors and distributed between stores and headquarters. Cloud-based solutions allow the entire retail suite and all data to be integrated into a single package that is always up-to-date, accessible from anywhere, and accessible to other parts of the application. For example, a sales transaction in a store immediately updates the inventory. This update is available immediately to the reporting system, the supply-chain system, and to CRM; no data is ever out of sync.

Low Risk, Rapid Rollout

Cloud-based systems can be adopted incrementally without displacing existing installed systems or disrupting operations.

You can start with one store with one function, for example, mobile point of sale or reporting, and gradually grow as needed.

A proxy server is installed on premises at the retailer.

The purpose of the proxy is to synchronize between the cloud-based system and existing functions at the retailer.

One end of the proxy integrates with the retailer’s inventory, CRM, supply chain, transaction, and sales audit systems.

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current IT architectures, credit-card data is stored on-site at hundreds or thousands of locations across the enterprise. In one well-publicized recent example at Subway, hackers were able to infiltrate insecure servers at a number of stores and steal over 100,000 credit cards. In contrast, with many cloud architectures, no credit-card data is stored anywhere in the path from the mobile POS device to the credit-card processor.

In fact credit-card data can be encrypted in hardware at the mobile POS device and remain encrypted all the way from the device to the processor, with the cloud-based applications never decrypting or storing the card data.

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Mobility and Cloud Computing continued from page 56

Understanding the connection between cloud computing and mobile devices will enable LP to focus their efforts early on to creating the necessary plans for securing the mobile devices, asset tagging, and instituting controls for the issuance and return of the hardware tools.

Integrated cloud-based retail systems can also help with loss prevention in another way. It’s well documented that employee theft accounts for a significant percentage of loss. One reason for this is that dishonest employees have learned to exploit delays in data synchronization between stores and the headquarters. But

in an architecture where inventory counts or transaction logs are instantaneously and constantly synchronized, such vulnerabilities are harder to exploit. As one example, consider the management of cash registers in a centralized cloud-based architecture. Here, the cash registers of the enterprise are visible to headquarters from a web browser. Cash receipts, transactions, and expected totals are available in real-time from anywhere, thus letting the loss prevention team conduct spot audits at any time.

Here again we see where loss prevention will benefit from understanding the technology and being involved early on in the process. The opportunity to develop the audit processes in conjunction with the technology in advance of rollout is less time consuming and frustrating than having to play catch up after the technology is rolled out. Additionally, building the plan for the physical security controls required for mobile technology and the training to understand the technical impacts of mobility before rollout will reduce the risk for loss or needless exposure.

Through an improved understanding of technology, earlier involvement in the technology process, and by leveraging new technology to support initiatives, LP professionals can begin to reduce the negative impact new technology has on their departments. slow, unwieldy IT systems that have evolved in piecemeal across multiple vendors over time. Cloud-based technology is an emerging alternative IT option that can provide a sound basis for addressing issues of today and tomorrow.

Cloud-based applications provide the ability to adopt projects on an incremental, low-cost basis with minimal disruption to existing operations, therefore allowing retailers to quickly implement and leverage the latest improvements in technology to maintain a competitive advantage over their competitors.

One such improvement in technology is mobility offerings and, while mobility will have an impact on LP, early involvement and an understanding of the technology will help in the development of an approach to address the security challenges. Treating mobility and all the components as any other asset to protect is the right approach. Gathering baseline data prior to mobile implementation is important. Using existing tools and solutions, such as store risk classifications, predictive modeling, and performance scorecards, will support the decisions and measure the success of the mobile technology deployed.

As the rapid pace of change continues in technology, and improvements such as cloud-based systems enable IT staffs to implement new technology quicker than ever, it is up to loss prevention professionals to learn about the various technologies that can and will impact their departments as well as to become involved early with technology discussions in order to manage risks on the front side, as opposed to having to catch up on the back side of implementation.

Getting in Front of Change

This article suggests that innovation, strategic initiatives, and competitiveness at retailers is being hampered by outdated,

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January - February 2013

PHIL BELENA is vice president of sales and marketing for Enfatica, and RICHARD MARINO is managing director of the Stores Consulting Group.

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Solutions Showcase

Alpha Introduces ShelfNet

™

Alpha

Wireless Technology and Data-Capture Reports That Improve On-Shelf Availability, Store Margins, and Shopper Experience

T

he cost of out-of-stocks is staggering.

According to EPCglobal, the top 100 retailers chalked up an estimated $69 billion…yes, that’s a “B”…in lost sales in 2011 due to out-of-stocks. When consumers don’t find what they want on your shelves, 30 percent of the time they’ll leave empty-handed. About 47 percent of them will look elsewhere and, if they find that product on someone else’s shelf, only 2 percent of them will come back to your store even after you’ve re-stocked.

On-shelf availability (OSA) can be improved in a number of ways: ■ Seeing to it that back-stock moves from stock room to shelf in a timely fashion, ■ Transferring stock from secondary displays, such as promos, clearances, cross-promotions, and resets, back to primary locations, ■ Shoring up supply-chain issues and errors, and ■ Mitigating shrink by employees, shoplifters, ORC, and even botched recordkeeping.

ShelfNet generates reports that tell retailers: ■ What is in and out of stock both on the shelf and in the stock room, ■ If the item is currently on promotion and if there’s a secondary display in the store, and ■ Whether the product is currently on order or not.

Benefits of ShelfNet

By providing out-of-stock alerts to store managers, a quick restock response can prevent lost sales. ShelfNet’s analytic software will even rank the value of lost sales by item, so store managers can restock products that produce higher revenues first. Moreover, ShelfNet system enables customized data ShelfNet will compare sales of similar integration for the store, operations, logistics, products in a category when the primary merchandising, and CPGs. It can provide product is out of stock; thus answering the real-time, actionable data and alerts for store question—are customers switching from the managers, LP staff, merchants, and suppliers, primary product to others or are they just all the way down the supply chain. leaving the store without making a purchase?

ShelfNet has a low-cost system For chain stores ShelfNet metrics can architecture comprised of a scalable wireless provide data on store-to-store, regional, network that requires no shelf wiring or and district levels, helping management power-draw, and makes use of existing shelf gauge how individual stores or entire The ShelfNet Solution hardware, including product pushers, fixtures, areas are being affected by out of stocks, Alpha High Theft Solutions has developed and displays. The key is the integration of as well as how they are reacting to a product that can help retailers improve OSA semi-passive RFID tags with the pushers. The reduce the out of stocks versus their peers by addressing a critical issue—notification. magic is in the ShelfNet system. throughout the chain. This information ShelfNet is an integrated OSA solution For example, using its capability to track can help determine if there is an isolated that keeps retailers in the loop. The products entered into the store’s inventory, store issue or a supply-chain issue.

ShelfNet allows stakeholders to measure and analyze what happens on a store’s shelves in real time—the retail moment of truth. It enables them to uncover root causes of out of stocks and analyze the results of changes made to in-store processes, supply-chain efficiencies, and other changes, thereby measuring the results at shelf level where consumers make their purchase decisions.

With the data supplied by ShelfNet, retailers can gain new insights into business processes and decisions, at the same time providing customers with a better shopping experience. With a clearer picture of true demand, retailers can stock the right products at the right time, and keep valued customers coming back for the products they need and want.

About Alpha

For forty years Alpha High Theft Solutions, a division of Checkpoint Systems, has led the way to the most innovative and technically advanced solutions engineered to protect retailers’ high-risk merchandise and increase sales.

For more information about ShelfNet or our other solutions, call Debra Skolnicki, Key Account Manager, at 440-984-8660.

LP Magazine | January - February 2013

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Industry News

by Robert L. DiLonardo DiLonardo is a well-known authority on the electronic article surveillance business, the cost justification of security products and services, and retail accounting. He is the principal of Retail Consulting Partners, LLC (www.retailconsultingllc.com), a firm that provides strategic and tactical guidance in retail security equipment procurement.

DiLonardo can be reached at 727-709-6961 or by email at rdilonar@tampabay.rr.com.

ECR Europe Announces Shrink Study

E

fficient Consumer Response Europe (ECR Europe) recently announced the launch of a four-year, multi-project study focused upon how new technologies and business formats impact malicious and non-malicious losses in retail.

ECR Europe is a trade group consisting of retailers, consumer products manufacturers, importers, logistics providers, and other entities involved in the successful pursuit of collaborative management across the retail supply chain. Its European Shrinkage Work Group will be collaborating with the Department of Criminology at the University of Leicester (U.K.), headed by Professor Adrian Beck, a well-known expert in the field.

Consumer brands involved in the project include Procter & Gamble, L’Oreal Paris, GlaxoSmithKline, Heineken, Bacardi, Diageo, and Wilkinson. Retailers involved include Tesco, Metro Group, Ralph Lauren, Marks & Spencer, Sainsbury’s, and Carrefour Belgium. The study is to be funded by a generous grant from Checkpoint Systems.

Rather than focus solely upon theft, researchers plan to identify what Beck calls “profit drainers across business functions.”

Beck believes that the retail loss prevention industry should recognize “that a key purpose of a business is to generate and protect profit and then consider loss within that framework.”

Rather than focus solely upon theft, researchers plan to identify what Beck calls “profit drainers across business functions.” Beck believes that the retail loss prevention industry should recognize “that a key purpose of a business is to generate and protect profit and then consider loss within that framework.”

Judging by the list of projects scheduled for the first twelve months, the group has identified timely and relevant topics that have been in the forefront of recent discussions among loss prevention practitioners: ■ Understanding the impact of loss on on-shelf availability; ■ Charting the potential impact of developments in mobile scanning technology;

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E xploring the links between employee satisfaction and loss; and Identifying the challenges of managing loss in the multichannel retail environment.

The ECR Europe Shrinkage Work Group is co-chaired by John Fonteijn, head of group asset protection at Royal Ahold, and Colin Peacock, customer development director, on-shelf availability, for Procter & Gamble. The group is an active forum that provides a unique, fresh look at the problem of loss as well as providing ongoing and up-to-date support catering to the needs of the retail community.

The University of Leicester is considered to be one of the leading research institutions in the U.K. Beck has published a number of papers covering retail security issues, several that have appeared in this magazine, including a collaboration with Walter Palmer of PCG Solutions on the effectiveness of EAS in an apparel retail environment.

Beck has also published a 2009 book entitled New Loss Prevention: Redefining Shrinkage Management. Checkpoint’s full funding has allowed for the hiring of Megan Bornman, a doctoral student and researcher, who will drive the effort.

■ ■

From Mail Order to Big Box…and Back

Did you know that Richard Sears (yes, that Sears) first used a printed mailer to advertise watches and jewelry in 1888? Or, that Walmart’s 2011 total revenue is ten times greater than Amazon, but Amazon has ten times more online sales than Walmart?

Do you remember Service Merchandise, the original retail showroom in which shoppers browsed displays of single items, rather than full shelves, then clerks fetched the purchase from the stockroom in the rear of the store.

What would your job look like if there were no more stores? A scary scenario? Of course. Farfetched? Not really.

Quartz online magazine (www.qz.com) published a thought-provoking piece on “stores without goods.” It’s a must read for all of us. It explores the future landscape of shopping, and the apparent trend away from the conventional trip to the mall.

Modern-day mail order consists of shoppers scouring the Internet for merchandise and filling their cyber-shopping cart. Many shoppers practice “showrooming” by visiting a brick-and-mortar store, examining the merchandise, and asking questions, but then buying online from somewhere else, typically for less money or to save paying sales tax.

As telecommunications and computer technology continue to converge, the shopping experience will actually devolve first to the modern interpretation of Service Merchandise—a showroom with delivery instead of cash and carry. Called “virtual stores”

January - February 2013

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by some, this model is under experiment in Asia. In 2011 The Homeplus discount retail chain in Korea, jointly owned by Tesco and Samsung, created the first virtual store in an underground rail station in Seoul. Shoppers with smartphones download the Homeplus app, then scan the QR codes located below items they wish to purchase. The merchandise is delivered later.

Christopher Mims, author of the Quartz piece, opines that, eventually, we will just look at something with our “Google Glass”—Google’s prototype of a device you wear on your face.

It consists of an eyewear-like frame with a full-blown computer with memory, a processor, camera, speaker and microphone, Bluetooth and wi-fi antennas, accelerometer, gyroscope, compass, and a battery; all inside the earpiece. “Just look at a wall,” he says, “load up the relevant shopping app, and the wall becomes a shelf of virtual goods.”

The good news for us is that there would be fewer shoplifters and ORC rings in our future. We can only hope.

LP Vendor Executives Retire

Two career executives who serviced the loss prevention industry recently retired. Jeff Bean retired as group vice president of national accounts, North America, for ADT. Larry Yeager retired as vice president and general manager of the Alpha division of Checkpoint. LP Magazine’s executive editor, Jim Lee, offers his assessment of the contributions of these two executives to the loss prevention industry in his column on page 66.

Newly Certified LP Professionals

Following are individuals who recently earned their LPC and LPQ certifications from the Loss Prevention Foundation.

Recent LPC Recipients Jeffrey Andujar, LPC, HR Mgr, Rite Aid Katie Ayala, LPC, Sr LP Consultant, Asset Protection Associates Nicholas Bacon, LPC, Reg. LP Mgr, Vans (Division of VF) Jean-Francois Bourgoin, LPC, LP Mgr, Tommy Hilfiger Canada Jonathan Collier, LPC, LP Mgr, Walgreens Ryan Dzwigalski, LPC, Reg. LP Mgr, Vans (Division of VF) Trevor Eynon, LPC, LP Mgr, Office Depot Rebecca Fosterman, LPC, AP Specialist, Banfield Pet Hospital Sev Garcia, LPC, LP Supervisor, Walgreens Brenda Gibson, LPC, LP Mgr, Spartan Stores Chris Hinger, LPC, LP Dir, Polo Ralph Lauren Tom Ingstrum, LPC, LP Mgr, YUM Brands Brian Kirby, LPC, LP Field Mgr, Columbia Sportswear Brandon Long, LPC Kellen McWhite, LPC, LP Mgr, Best Buy James Mullin, LPC, Reg. AP Mgr, Spartan Stores Jason Parsons, LPC, LP Mgr, Rite Aid Susan Pedersen, LPC, NE Reg. Logistics AP Mgr, Best Buy Jaime Quirindongo, LPC, Walgreens James Ross, LPC, LP Agent, Banfield Pet Hospital David Schindler, LPC, AP Mgr, MMI/Banfield Maurizio Scrofani, LPC, LP VP, MPS Solutions Scott Sibley, LPC, LP Dir, Bell Canada Dennis Sullivan, LPC, LP Mgr, Staples Renee Thomas, LPC, Exception Reporting Specialist, Hallmark Cards Jennifer Torres, LPC, Sr AP Mgr, Cabela’s Mark Ulrich, LPC, LP Mgr, Weis Markets Claude Verville, LPC, VP LP and Safety, Lowe’s

Recent LPQ Recipients

Jeff Bean (left) is shown with Christine Rollo of ADT and professional golfer, Heath Slocum, at the Kenny G Gold Pro-Am at the 2011 Honda Classic.

Larry Yeager is shown behind the wheel of a Lotus FA race car in 1971 with his wife of forty-two years, Lisa.

Daniel Barnes, LPQ, Streamwood Police Department Derek Bittner, LPQ, American Eagle Outfitters Chris Cerezo, LPQ Anthony Dentler, LPQ, Cabela’s Brenton Douglas, LPQ, Goodwill Industries of Central Arizona Ron Drake, LPQ Ryan Fink, LPQ Jason Fults, LPQ Magaly Gomero, LPQ, American Eagle Outfitters Christopher Kaszak, LPQ, Maryland Lottery and Gaming Commission Catherine Krug, LPQ, Rite Aid Bryan Mellor, LPQ, Goodwill Industries of Seattle Robert Morgan, LPQ Michael Noble, LPQ Hunter Petray, LPQ, Benton County Sheriff’s Office Wilner Piquant, LPQ, Marta Martin Smith, LPQ Sean Teague, LPQ, U.S. Marines Daniel Viera, LPQ, The Home Depot Brian Walker, LPQ, Westover Security Michael Zurn, LPQ, Stage Stores

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Calendar

January 13 – 16, 2013 National Retail Federation 102nd Annual Convention & EXPO Jacob Javits Convention Center, New York, NY www.nrf.com February 5 – 6, 2013 United Publications TechSec Solutions Westin Fort Lauderdale, FL www.techsecsol.com

Sean Marshall has been appointed Area Investigator for Advance Auto Parts.

Aaron Tellez has been appointed District LP Manager for National Stores, Inc.

Greg Leiker was appointed Regional LP Manager for Apple Retail.

Brent Wolf has been named Field Safety Manager for OfficeMax.

Jamal Evans has been promoted to Senior Director of LP for Ashley Stewart.

Kirk Carter has been appointed Regional LP Manager for Radio Shack.

Will Graeber has been appointed Regional Director of LP for Bed Bath & Beyond.

February 21, 2013 LAAORCA 4th Annual ORC Conference Los Angeles (CA) Convention Center www.laaorca.org

Tim Flowers has been promoted to Senior Director of LP for Best Buy.

March 6 – 8, 2013 Jeweler’s Security Alliance 35th Annual Security Seminar and Expo Flamingo Hotel, Las Vegas, NV www.jewelerssecurity.org

Mike Patterson has been promoted to Regional LP Manager for Dollar General.

March 10 – 13, 2013 Food Marketing Institute 2013 Asset Protection Conference Pointe Hilton Tapatio Cliffs, Phoenix, AZ www.fmi.org March 25 – 26, 2013 USS ORC Foundation 1st Global ORC Conference Bellagio Hotel, Las Vegas, NV www.ussorc.org March 26 – 28, 2013 Merchant Risk Council e-Commerce Payments & Risk Conference Aria Resort, Las Vegas, NV www.merchantriskcouncil.org April 28 – May 1, 2013 Retail Industry Leaders Association 2013 LP, Audit, & Safety Conference Gaylord Palms Resort, Orlando, FL www.rila.org May 8 – 10, 2013 International Organization of Black Security Executives Annual Spring Conference Hosted by Limited Brands Columbus, OH www.iobse.com June 12 – 14, 2013 National Retail Federation Loss Prevention Conference & EXPO San Diego (CA) Convention Center www.nrf.com

62

People on the move

Dan Faketty has been promoted to VP of AP for BI-LO/Winn-Dixie.

Robert Bradley Swain has been appointed Territory LP, Audit, and Firearms Compliance Manager for Dunham Sports.

Frank Simmons has been appointed National AP Analyst for Express Stores.

Mario Cardia has been appointed Northeast Area Investigator for GAP, Inc. Greg Bramble has been appointed New England Regional Operations Manager for GMCS. James D’Arcy has been promoted to VP of LP and Food Safety and Kelly Timmins to AP Senior Investigator for The Great Atlantic & Pacific Tea Company.

Michael Chirco has been appointed District AP Manager for The Home Depot.

Lisa LaBruno has been promoted to Senior VP, Retail Operations, and Garth Gasse has been named Director, Retail Operations, for RILA. Ray Cotton, CFI, CPP has been appointed to Head of Global Security and Safety for Riverbed Technology.

Myron Burton, CFE, CFI has been promoted to Regional LP Director for Ross Stores.

Jill Rodman has been promoted to Divisional VP of LP for Sears Holdings.

Gregory Franck has been named Regional LP Manager, and Tony Cavaliere, LPC has been appointed Corporate LP Manager for Sears Hometown and Outlet.

Greg Greer has been promoted to District LP Manager for Sports Authority.

Craig Moyer has been appointed LP Director for The Stores Consulting Group.

Eduardo Catala, LPQ has been appointed National Task Force Investigator for TJX. Randy Allen, CPP has been named Regional AP Manager for Toys“R”Us. Michael Lamb, LPC has been appointed Senior Director, Operations Support, AP for Walmart U.S.

Banita Kapoor has been promoted to LP Manager for Lamps Plus.

Eric Glofka has been promoted to Regional LP Director and Jackson Chambers, LPQ to LP Manager for Lowe’s.

Steve Kang, Margaux Chandler, CFI, and Stephen McIntosh, CFI have been appointed Regional AP Managers, and Erik Newcomb has been promoted to Director of AP for lululemon athletica.

Chad Matheny has been promoted to Senior Regional AP Manager for Luxottica Retail.

January - February 2013

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LP Magazine | January - February 2013

65

Parting Words

Good Things Do Happen to Good People

I

’m still working on two articles for the magazine that I mentioned in the last issue. One is the advice Crash gave to Ebby, and how it is important in LP. Crash’s advice as some know is based on fear and arrogance. This is so prevalent in LP that I have more information than needed and am editing down the article.

The other task is a new ongoing column called “Executive Files.” If anyone reading this column wants to write an article from the C-suite perspective, send me an email. You don’t have to have something written, just have a topic, and we will figure it out from there. And you don’t have to be a good writer; heck, I have been writing for years with a good editor.

In the meantime, this is a special column for me. I have known since late fall that two of the industry’s best executives were retiring. These two gentlemen were executives on the vendor side who served the retail community for many years.

Jeff Bean You likely don’t know that Jeff Bean retired after 33 years with ADT. Very few of you would have ever met or known of Jeff. That was his style. However, those inside ADT knew him well, respected him, and were rewarded for his tenure at the company.

Jeff had many positions over the years, but retired as the group VP of national accounts, North America. That means he was responsible for all sales and marketing that affected retail loss prevention. If your company has any ADT products, it fell under Jeff’s responsibility—a big job.

I was privileged to know Jeff for many years. Here is some of what I learned of him. When playing golf with him, he was more interested in whether you and others were having a good time and less concerned with himself. When having dinner, the conversation was typically about LP executives—what made them tick, what were their priorities, what they appreciated and respected from a vendor. He really wanted to understand his customer. In a business meeting he was a good, analytical listener who turned to others on his team for opinions. He always made his customer feel comfortable.

I asked Jeff for some of his favorite memories of his career.

He described others like this: “A true gentleman.” “Very fair person who understands and gets it.” “A very sharp mind and to the point.” “A strong leader and kind man.”

66

January - February 2013

Jim Lee, LPC Executive Editor

When I asked about his life after ADT, he made it clear he was planning to stay busy. Those who know Jeff, know that he has been involved with several associations that help others not so fortunate. You can expect that’s where he will spend his time.

Larry Yeager Color outside the lines, don’t make customers jump through hoops, build a winning team, and show others you care. You likely have heard these blueprints for success before. Larry Yeager is one executive who lived by these principles.

Larry recently decided to retire from his position as VP and general manager of the Alpha division of Checkpoint and go “hit golf balls off the beach.” To many Larry has been the face of Alpha, but did you know that he was a co-inventor and patent holder of Spider Wrap®. He built a reputation of being an innovator and creator. Something else you likely don’t know is he was a pilot in the Vietnam War as well as a race car driver; a little bit of a free spirit.

When you talk to Larry about his career working with retailers, he focuses on relationships and the progress LP has made as a profession, not about himself or about his products. He really likes this business and the people in it.

Apart from driving around the city of Charlotte in his Corvette, what’s in Larry’s future? I bet it will have something to do with helping others, community service, or even politics of some kind.

Thanks to You Both This business will miss both Larry and Jeff. I speak for the industry when I say, “Thanks to both of you for making it a better place.”

We have many outstanding leaders on both sides of the aisle—practitioner and vendor. These two are examples of what Teddy Roosevelt is quoted as saying: “In the battle of life, it is not the critic who counts, not the one who points out how the strong stumbles or where the doer of a deed could have done better. The credit belongs to those who have actually been in the arena.”

[Turn to page 61 for photos of these two engaged in activities they love.]

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