Shrinking the Shrink
Save big by preventing loss
For decades, retailers have dealt with fraud and theft-with losses often totaling more than net profits. But now, high bandwidth connectivity to stores and advanced analytic systems are identifying fraud and theft as they happen-and immediately alerting loss prevention staff to take corrective action.
As professional criminals, who progressively steal more, move from retailer to retailer, they gravitate toward those companies with less effective security systems. If you haven't improved your system recently, you're more likely to become a target. Conversely, if you've implemented advanced fraud systems, you're on the right path to driving away crime and perhaps even toward your competition.
In fact, some retailers have discovered that the mere announcement to employees of business intelligence (BI) for real-time fraud/theft detection has immediately reduced losses by more than the cost of the BI system.
Early and Fast Returns on Loss Prevention
Some retailers have achieved very rapid returns by using BI to analyze point of sale (POS) transactions, payment transactions, and cash drawers in real time and immediately alert managers to suspicious behavior. Is this your story? If not, you should also know that BI covers transaction analyses/alerts to the other large areas of fraud: returns.
Because the risks are much higher in card-not-present transactions, such as at websites and call centers, many retailers have implemented loss prevention transaction analyses. However, there is a constant flow of new scams, such as changing delivery locations to legitimate orders. To combat this, it's necessary to get an effective, enterprise-level, multi-channel, fraud-reduction BI system. It will allow your loss prevention managers to easily write rules that will halt the newest scams as they emerge. And it will give all your stores, websites, and call centers automatic access to files of high-risk individuals.
Performance Measures
A wide range of metrics measure different aspects of loss prevention. Do you have measures to gauge successful loss prevention performance? Did you know you could use BI to optimize these measures?
BI enables easy expansion and customization of loss prevention performance so you can evolve strategies for the greatest gains. BI also measures return on investment (ROI) and payback speeds, which are often among the fastest in retailing.
