Steps to Data Loss Prevention in Retail Stores

Steps to Data Loss Prevention in

Retail Stores

Gone are the days when the Data Loss Prevention team focused only on preventing shoplifting. Today, technology has changed the rules of the game. Consumers have multiple forms of purchase, such as the click & collect formula (buy online and collect in store) or delivery from the store and, in some cases; they can pay for merchandise using a tablet as they leave home. These scenarios represent a challenge for the Loss Prevention department. For this reason, RFID technology, video analysis and big data are becoming fundamental tools to have a clearer picture of the shrink situation. The quantity and quality of data that retailers obtain from these tools are vital in today's complex retail environment.

 

If they have a more precise view of the loss, they can identify its causes and establish recommendations and corrective measures in time to avoid repeating specific cases of loss. With real-time analytical dashboards and exception-based reporting, intelligent systems management, and a Shrink Management as a Service (SMaaS) solution, retailers will have what it takes to do just that while saving money. The company and make better informed decisions.

So how can you tell if your loss prevention program is working? The first thing is to know what is happening in the stores.

 

1. Building the Foundation - Collect the Data

Retail companies begin to obtain customer data as soon as they open store doors. They constantly collect statistics on employees, suppliers and customers. However, rarely does this data become useful information for taking strategic action at the right time.

 

In many cases, retailers have this information readily available. In others, they are not even aware that the data exists. But a qualified and reliable Data Loss Prevention solution provider usually knows where and how to locate them. Sometimes compiling the necessary data takes a little more time and effort, which is why ongoing collaboration and interaction with your internal Loss Prevention team and IT resources is so important to lay the foundation for success.

 

2. Understanding Trends and Developing Conclusions - Determine What It Means

Today Data Loss Prevention offerings are closely evolving with advancements in the new generation of business intelligence (BI) tools to better understand loss prevention trends and assess valuable information. One of the initial uses of these tools is to generate massive volumes of compiled data that a company employee then has to evaluate by hand to determine what they mean. For example, in the case of internal theft, this would mean identifying trends of hidden fraud and evaluating statistics of inferred and consistent employee behavior. 

One BI tool that is gaining momentum in the loss prevention context is Software as a Service (SaaS). For example, Sensormatic's SMaaS or Shrink Management as a Service platform offers a cloud solution that performs predictive analysis of detailed data to identify and break shoplifting patterns. SMaaS is a smart technology that combines a defined set of key performance indicators (KPIs) by district, region and company to identify:

 

·         The effectiveness of electronic article surveillance (EAS)

·         Actionable waste information useful for Data Loss Prevention

·         Instant correction of faulty equipment

·         Notifications of exceptions by email; and it can be integrated by fitting into most legacy systems.

 

Using the new generation of LP technology via the cloud, you don't have to install analytics software on an internal server or rely on store Wi-Fi to operate. There are no expensive licenses required, plus there are no delays or shortcomings caused by installing the software separately on each computer terminal. 

 

As new versions are automatically updated when available, there is no need to install security patches or updates. It also requires fewer IT staff, because it is managed by an external data center that can lower operating costs and correct equipment failures more effectively. It also simplifies and speeds up the reporting process and response time with an easy-to-use analytics dashboard.

 

Instead of generating huge reports packed with statistics, metrics and activities, retailers can clearly understand the most relevant metrics and insights. These dashboards can summarize the information needed to identify patterns across multiple locations, departments, and products, and explain what is happening in the store. Because predictive analytics can be used to identify atypical patterns and correlations, the appearance of certain data about employees who have bypassed automated procedures, return rates, adjustments to available inventory quantities, and employee hours in certain locations can set off alarms about internal theft and questionable behavior.

3. Use the Latest Technology - Simplify Solutions

Search the cloud for a service platform that simplifies retail environments and provides the predictive and preventive information essential to proactively manage shrinkage. The complexity and costs of IT systems can be reduced if the infrastructure is simplified with a solution based on the cloud, service software (“as a service”) that facilitates access and collaboration at any time and place. Rather than having to resort to the familiar "shrink cycle" to identify and resolve issues related to the unknown loss (which, in many cases, can take up to six months and considerable investment in terms of employee time and effort) , retail companies can now make more agile, strategic and data-driven decisions to correct them. 

 

Today's stores say many things throughout the day and can share insights on how to minimize losses and maximize growth. All retailers have to do is listen.

 

4. Developing key performance indicators - Deciding how to measure

In recent years, retail companies have begun to develop, monitor and measure key performance indicators (KPIs) in a systematic way to reduce waste. After analyzing the data obtained in step one, both the Data Loss Prevention department and the provider of the prevention solution will have a clearer understanding of the company's loss situation. From there, they will be able to define quantifiable goals using KPIs.

 

The most effective indicators reduce the time required to identify new challenges that will arise to prevent losses in the future. Although retailers think they have a very long list of possible KPIs, most experts in the field recommend focusing only on seven or eight critical objectives in the initial stages.

 

Among the KPIs defined are:

 

·         Description of alarms

·         Hourly alarms

·         Alarm index according to influx

·         Loss by region

·         Store Status Page

·         Sensor deactivation

·         Organized crime activity in the retail sector