Shai's -retail Management-unit 3

MODULE-3 STORE SECURITY ASPECTS •

Whether you’re a big box retailer or a family-run shop, security concerns in the retail market include detecting shoplifting, stopping inventory shrink and theft to parking lot surveillance. Retail system installations also must address the safety of employees and customers, providing convenience that doesn’t adversely impact the customer service experience.

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TWO TYPES OF SECURITY:Personal security and Merchandise security

PERSONAL SECURITY

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Many shoppers and employees feel less safe at retail establishments than did before, with these results: some people are unwilling to shop at night. some people age 60 and older no longer go out at all during the night. Almost one-half of shoppers believe malls are not as safe as they once were. Parking is a source of anxiety for people who worry about walking through a dimly lit parking lot. As one industry observer noted, “Retailers must be proactive. They should take precautions to be better prepared and make the shopping experience as safe and enjoyable as possible.” These are among the practices retailers are utilizing to address this issue: Uniformed security guards provide a visible presence that reassures customers and employees, and it is a warning to potential thieves and muggers. Some malls even have horse-mounted guards. This is a big change: “Mall management wants us to be less ambassadors of goodwill and is asking us to take a more aggressive approach. They are asking us to not watch and wait too long if we spot suspicious behaviour. Thats lost package that we would have delicately brought to lost and found, we wont do that this year. From a customer’s point of view, that lost package is really lost. Undercover personnel are used to complement uniformed guards. These guards often work in teams. Brighter lighting is used in parking lots, which are also patrolled more frequently by guards. These guards more often work in teams. TV cameras and other devices scan the areas frequented by shoppers and employees.7-Eleven has an in –store cable TV and alarm monitoring system, complete with audio. Some shopping areas have curfews for teenagers. This is a controvesial tactic. Access to store backroom facilities (such as storage rooms) has been tightened. Bank deposits are made more frequently-often by armed security guards.

MERCHANDISE SECURITY• • • • • • • •

Merchandise security is provided through the various waysClosed-circuit TV. Electronic Article Surveillance Systems. Convex Mirrors Alarms Point of Sale Machines. Freezers Employee Screening And Training

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Closed-circuit television (CCTV) is the use of video cameras to transmit a signal to a specific, limited set of monitors. It differs from broadcast television in that the signal is not openly transmitted, though it may employ point to point wireless links. CCTV is often used for surveillance in areas which need security, such as banks, casinos, and airports or military installations. Increasing use of CCTV in public places has caused debate over public security versus privacy. In industrial plants, CCTV equipment may be used to observe parts of a process that are remote from a control room, or where the environment is not comfortable for humans. CCTV systems may operate continuously or only as required to monitor a particular event.

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Electronic article surveillance is a technological method for preventing shoplifting from retail stores or pilferage of books from libraries. Special tags are fixed to merchandise or books. These tags are removed or deactivated by the clerks when the item is properly bought or checked out. At the exits of the store, a detection system sounds an alarm or otherwise alerts the staff when it senses active tags. For high-value goods that are to be manipulated by the patrons, wired alarm clips may also be used; these, being less common and technologically less mysterious, are not covered by this article.

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Point of Sale Machines:Point of sale machines or ‘pos’ as they are normally called, are primarily used for the purpose of billing at retail stores. These machines usually consist of a built-in CPU cabinet, a small monitor, a compact keyboard and a small in-built printer, all as one unit. This is crucial as most of these machines have proprietary equipment in them, which are not repairable or replaceable from the open market.

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Freezers:Freezers are used only for storing highly perishable food products and their frequent breakdown could lead to enormous losses in terms of damaged products. Thus good and robust freezers are essential to withstand the outlet’s continuous 24-hour operation since the freezers would have to remain working even when the store is closed at night.

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Employee Screening And Training:-

After a series of bad experiences, most retailers in the west now have a compulsory screening policy in which they undertake extensive pre-employment reference checks for every prospective employee. Compulsory drug tests are also frequent with international retailers. Apart from this, all employers try their best to create a family type culture within their stores to encourage honesty and integrity. An honest, good ,agile employees is , in fact, the single most effective deterrent to shoplifting. STORE SECURITY

SHOPLIFTING:•

Shoplifting is a common crime that occurs when someone steals merchandise offered for sale from a retail store. Shoplifting from retail stores costs merchants an estimated loss of 13 billion dollars per year.

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To commit shoplifting one must "intend" to permanently deprive the merchant of the value of the merchandise. Shoplifting most often occurs by concealing merchandise in a purse, pocket, or bag, but can occur by a variety of methods.

• Most shoplifters are amateurs. However, there are growing numbers of organized theft rings and people who make their living by stealing from retail stores. Amateur shoplifters can be highly skilled, and some steal almost every day, but don't do it to make a living. Most amateurs are opportunistic, crude in their methods, and are detected more often than others. Professional shoplifters run the gamut from being highly skilled to thug-like. • Some professionals work in teams or use elaborate distraction scenarios. The crude professionals sometimes use force and fear much like gang intimidation and often commit grab-and-run thefts. Being a professional means that they steal merchandise for a living, and like other trades, practice makes perfect. Thoughtful professionals are very difficult to stop in a society where retail stores openly display their merchandise. SHOPLIFTING PREVENTION • To combat these losses, merchants have had to take sometimes extreme measures to control shoplifting. Most large retailers employ plain-clothes floor detectives to observe customers as they shop. Many shoplifters are detained and arrested for their indiscretions. Plain-clothes floor detectives alone are not enough of a deterrent because they are seemingly invisible. Many stores use video surveillance cameras and electronic article surveillance (EAS) devices attached to their products that cause alarms to go off if not deactivated by the cashier. Others secure expensive and high theft items like small leather items, perfume, cosmetics, tools, liquor, or cigarettes in locked enclosures. Other retailers use cables or hanger locks that require the assistance of a sales associate to unlock the expensive item of clothing before you can inspect it. • Shoplifters want product accessibility, privacy, and prefer stores with few antitheft methods in place. It is unfortunate, but anti-theft procedures sometimes affect the shopping experience for all of us, especially if applied thoughtlessly.

• SHOPLIFTER DETENTION • The practice of physically detaining and arresting shoplifters is not without risk. Besides the physical contact that is sometimes necessary to stop an aggressive shoplifter, a merchant has the legal risk of being sued for doing so incorrectly. In America, customers get outraged when they feel they are being watched or if they are questioned about a suspicious transaction. Many merchants have been sued by their former customers for allegations of false arrest, false imprisonment, malicious prosecution, excessive use of force, and assault. • •

What Items are shoplifted the Most? What should employees do?

• ALARMING FACTS ABOUT SHOPLIFTING • • • • • • • • • • •

Shoplifters steal over $20 billion worth of goods from retailers each year. Shoplifting is America’s #1 property crime. 1 in 11 people shoplift. (There are approximately 23 million shoplifters in the US) 25% of these shoplifters are children. (That’s 5,750,000 children who are facing a life of crime.) 55% of adult shoplifters say they started shoplifting in their teens. 86% of kids say they know other kids who shoplift. 66% say they hang out with those kids 47% of high school students have shoplifted within the past year. Shoplifting often leads to more serious juvenile crime. Shoplifting spans all economic and cultural conditions. The vast majority of shoplifters are individuals who shoplift not because of financial pressures, but because of social, peer and personal pressure. The costs related to shoplifting are absorbed by the honest consumer who pays higher prices to cover the loss of merchandise, loss prevention measures, etc.

• Shoplifting is a big problem for retail businesses. It accounts for over a third of total shrinkage. The table below, from a study conducted by Hayes International, estimates the number of theft incidents and dollars lost to shoplifters:

STORE FORMAT DECISION •

A key store format decision for a chain retailer is whether to use prototype stores whereby multiple outlets conform to relatively uniform construction ,lay out and operation standards

ADVANTAGES         

Which make centralized management control easier reduce construction costs standardize store operations facilitate interchange of employees among outlets display a consistent chain image Disadvantages lead to inflexibility failure to adapt to local customer needs too little creativity

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Together with prototype store, some chains use rationalized retailing programs to combine a high degree of centralized management control with strict operating procedures for every phase of business

SIZE DECISION •

Many retailers use one or both of two contrasting store-size approaches to be distinctive and to deal with high rents in some metropolitan markets

Huge assortment and size is used to dominate small stores In secondary sites-rent will be low so can go for large size-if they can attract enough customers In saturated market or small market-small size is better Population size and density Purchasing power Area available •

I short, size decision depends on competitive situation ,market size and customer characteristics and location

LAY OUT SELECTION • • • • •

Select a lay out which allows for the complete presentation of the merchandise to the customer. Encourage customer to move around the complete store and at time ,make an unplanned purchase Balance between display and service provision for disabled persons Type of customers-teenagers old people etc

SPACE ALLOCATION •

APPROACHES Top-down space management approach- divides the space in to categories, and then works on product lay out Bottom-up space management approach- begins planning at the individual product level and then proceeds to the category and total store •

ALLOCATION-Each store has a total amount of floor space to allot to selling ,merchandise, personnel and customers Selling space- Display, interactions between sales people and customers, demonstrations and so on Merchandise space- to stock non displayed items Personnel space- set aside for employees to change clothes and to take lunch and for rest rooms Customer space- contributes to shopping mood. it may include benches, chairs ,dressing room, restaurant, parking etc PLANOGRAM •

More firms now use Plano grams to assign space. A Plano gram is a visual representation of the space for selling ,merchandise ,personnel and customers-as well as for product categories.

DETERMINATION OF SPACE NEED • • • • • • •

Model stock approach- Determines the floor space necessary to carry and display a proper merchandize assortment. Apparels and shoe stores use this method Sales productivity ratio- Assigns floor space on the basis of sales of profit. Highly profitable product categories get large space. Food stores and book stores use this method Analysis of stock to sales ratio (seasonal products) Product shelf life and durability Consider best presentation method Emphasis the focus category of the retailer Future sales potential

BUDGETING, CREDIT MANAGEMENT & RESOURCE ALLOCATION Budgeting • Outlines a retailer’s planned expenditures for a given time based on expected performance. • Costs include satisfying target market, employee and management goals. Budgeting- Benefits to a Retailer • Expenditures linked to expected performance, and costs can be adjusted as goals are revised and thus enhance productivity. • Resources are allocated to the right departments, product categories, etc. • Spending for various depts., pdt categories etc, is co-ordinated. • The goal of efficiency gets prominence. • Cost standards can be set. • Helps prepare for the future rather than react to it. • Helps monitor expenditures during a budget cycle. (e.g. cash allotment)

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Can analyze planned versus actual budgets. Cost and performance can be compared with industry averages. Preliminary Budgeting decisions Who Develops Budgets? What is the Time frame? How often Are budgets Planned? What cost Categories Are used?

Ongoing BudgetingProcess Goals

Performance Standards

What level Of detail Is used?

Planned expenditures

Actual expenses

Monitoring results

Adjustments

How flexible Are budgets?

CASH FLOW- IMPORTANCE • • •

It relates to the amount and timing of revenues received to the amount and timing of expenditures to a specific time. In CF mgmt usual intention is to make sure revenues are received before expenditures are made. Under-estimating costs and overestimating revenues, both of which affect cash flow are leading causes of new business failures.

RESOURCE ALLOCATION •

In allocating financial resources, both the magnitude of various costs and productivity should be examined. Each has significance for asset mgmt and budgeting.

Magnitude of various costs Expenses

Capital Expenditures Long term investments in Fixed assets

Operating Expenditures Short term selling and Administrative Costs in running a business.

PRODUCTIVITY • Is the efficiency with which a retail strategy is carried out. • Different retail strategy mixes have different resource needs. • Productivity must be based on norms for each type of strategy mix. 2 WAYS TO IMPROVE PRODUCTIVITY • Improve employee performance, sales per foot space and other factors by upgrading training programs, increasing advt, and so forth. • Reduce costs by automating, having suppliers do certain tasks and so forth. Also, a small core of full-time workers during non-peak times, supplemented with part timers in peak periods. 2 PRACTICED STRATEGIES TO RAISE PRODUCTIVITY • Improving Space Productivity (Sears) • Tuesday Morning shuts its stores for all of Jan and July- and parts of Feb, April and August there by saving on labor expenses, utilities, etc. CREDIT MANAGEMENT • • • • •

Consists of Operational decisions to be made: What form of payment is acceptable? Who administers the credit plan? What are customer’s eligibility requirements for a check or credit purchase? What credit terms will be used?

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How are late payments or non-payments to be handled?