ECR Retail Loss

Enabling the Retail Sector to Sell More and Lose Less

LAUNCH: Communicating Staff Dishonesty Student Challenge

At the end of June 2024 we launched our new collaboration project with the masters students [Marketing] from the Loughborough Business School, at the University of Loughborough. The project brief is below, we hope to publish the findings, results and new communication strategies in the second half of 2025. Background to the Challenge Staff dishonesty, often called internal theft, is hard for retailers to monitor, quantify, and detect. For example, one of the main “tools” available to detect internal theft is staff searching, however in a store setting, this is highly problematic to execute well and consistently. Further, it is seen as hard to prevent, especially through communications, as messages such as "stop stealing" are seen as counter to the goal of creating a culture of trust. At the same time, it is also very easy for retail loss prevention leaders to prioritise the more visible problem of external theft. Taken together, it is perhaps not surprising that efforts and the "lions share" of the investment in loss prevention are targeted at external theft, even though best estimates from retailers suggest that a third of losses can be explained by internal theft, which includes collusion Yet, and working on the assumption that staff dishonesty is a third of a typical retailers losses, its a good year if a retailer can capture and detect more than 5% of those losses. Thus, for most retailers, there is a significant detection gap. Closing this gap thus is a huge opportunity for retailers, for example, for a retailer with a 1.5% loss rate, and assuming no change in sales, a 35% reduction in staff dishonesty, would lower losses to 1.3%, a 20 basis point improvement. There are arguably very few other interventions that a loss prevention team could deliver, over the course of a year, that could have this level of significance to the bottom line. This student challenge will seek to find new and different ways to prevent staff dishonesty through communications and then publish data on the impact of advertising staff dishonesty to the industry in the second half of 2025. Staff Dishonesty Communication Challenge - Objectives. The challenge aims to discover new strategies to reduce staff dishonesty through communications and advertising. The students, allocated across five retailers, will first seek to explore with their respective retailers, their current approaches to reducing staff dishonesty. The students will then explore and identify new possible strategies and communications that could deliver impact. In the final part of the project, the retailers would then test the advertising campaigns in their business to understand impact, specifically, the levels of shrink pre and post campaign, to answer the question does staff dishonesty advertising work? t Timeline. Kick off - June 25th Competition Finale - October 16th Retailer Pre Vs Post Advertising Trials - First Half 2025. The report will be published in July 2025. For more information, contact colin@ecrloss.com

Age Verification at Self Checkout - Retailer Learnings

Age verification at the self-checkouts has the potential to reduce the number of physical interventions (productivity), to reduce abuse and violence associated with age verification (better retail jobs) and improve the shopper experience (less time) - what is not to love? And now with the use of age verification growing in other sectors, such as online social media, and with many emerging vendors, such as Yoti, partnering with POS providers such as NCR, (click here), now offering retailers this capability, and critically government policy makers getting closer to approving its use, here were three key learnings from the Coop UK 2022 sandbox trial. 1) The Technology - Not a Slam Dunk! What we learnt from the Coop trial results was that this was yet another new technology in the store that required bandwidth, that it required good cameras, possibly new better cameras, it required integration and then thought given on SCO machine placement in the stores that helped avoid possible factors that might cause error, such as sunlight. Above all, it is a technology that will require a significant investment in both financial resources and project management. 2) Consumer Acceptance is High: The tests were conducted in four stores, mostly in areas where there were a high number of students. The stores were required to place POS materials across the store to make shoppers aware that age verification technology was available. They positioned the technology as a way to checkout faster In the trial results, over 60% of shoppers when prompted, opted in, and allowed the machine to take a photo of themselves. Over 50% of shoppers were automatically verified by the technology and deemed to be over 25. The core element of the business case is thus a function of the reduced number of age verification interventions multiplied by the average time required to manage each transaction multiplied by the cost of the store labour. . 3) Positive Staff Response: On a daily basis, store associates will receive abuse, sometimes physical violence as they go about their work. In some stores, up to 75% of those incidents can be linked to age verification, where the store associate is expected to challenge the age of the shopper and ask for ID before they can process the payment, which is where tensions are raised. And while this age verification technology will not remove completely the need to challenge possible under-age shoppers, it can reduce the volume of checks associated with the refusal to sell age related products, such as alcohol, verified by a machine Vs a store associate. For a video recap of this meeting, please see video below with Professor Beck. Finally, if retailers would like to see the full recording of the meeting from 2022, please send email to colin@ecrloss.com.

Marketplace Loss Prevention - Retailer Updates

The e-commerce loss working group met to discuss the challenges of managing fraudulent claims for non-delivery and returns from sales made via online marketplaces such as Amazon, Ebay, Facebook, Walmart and Tik Tok, to name but a few. After a short presentation from one of the retailers, the group shared back their questions, comments and their own learnings. The full recording of the meeting is available to retailers, if this is of interest, please send email to colin@ecrloss.com. Three of the key highlights from the meeting include: 1) Reduced visibility: When retailers sell directly to the consumer, the full suite of fraud protection capabilities are available, with some of the tools looking at 600+ data points to identify possible risks. However, when retailers sell via a marketplace, visibility to data points that could help protect the retailer from fraud are significantly reduced, leading to a far greater risk. Retailers shared how criminals have become very aware of this weakness. 2) Limited Control: The group shared that the marketplace itself can have a bias and a tilt towards trusting customers first, and refunding the customer where there is a claim, while the retailer themselves would have been more likely to apply more caution and be more aware of the risk of fraud, especially on repeat offenders. 3) Collaboration Opportunity: Retailers reported that it was very difficult to find a person or team to contact at the marketplace retailers who could help support and investigate fraudulent claims. Where they had found a partners, they reported good success at recovering losses. For a video recap of the launch meeting, please see video below with Professor Beck.

New Research: Do Body Worn Cameras "work" in Retail Stores?

The video working group had an opportunity to learn about the findings from a new report by Professor Adrian Beck on the use of body worn cameras in retail. The group then shared back their questions, comments and their own learnings. The full recording of the meeting is available to retailers, if this is of interest, please send email to colin@ecrloss.com. The link to the full report is here Five key highlights from the report include: 1) Growing Adoption in Retail: As a response to the more challenging retail environment, and especially in the UK, there is greater adoption of body worn cameras in retail, with interest growing in USA, Europe and Australia. 2) Staff Feel Safer with Body Worn Cameras: The report highlights how staff generally feel safer when they wear body worn cameras, there is a strong belief amongst staff that the cameras can act as a calming agent, and stop the abuse. But worst case, if there is an incident, the staff are reassured that it is on record and recorded. 3) Body Worn Cameras help retailers gather better evidence: What the report shares is how, especially with audio, the quality of the video data available can help lead to more successful prosecutions, and sometimes, with no requirement for the member of staff or management to attend the court. 4) Body worn cameras can reduce incidents by 37%. In fact, the report identified a range of reductions, with 37% the average but the report also calls out caution, the actual number of incidents were often low, often single digits, and the methods and trial design often fell below the expectations of the academic who wrote the report, Professor Beck 5) Finally, body worn cameras are no panacea, or silver bullet to the problems of violence, abuse and crime in a retail setting. They must be seen in the context of a company wide approach. For a video recap of the launch meeting, please see video below with Professor Beck.

1of4
banner
action
adidas
albert
asda
auchan
best buy
carrefour
coles
desiqual
dollar general
duracell
esselunga
foot locker
gap
ikea
john lewis
kroger
lidl
lowes
m&s
meijer
nike
p&g
primark
river island
sainsburys
sonae
starbucks
target
tesco
walmart
whole foods

FOCUS AREAS

The research priorities are determined by its members – they drive the agenda to ensure ECR delivers research that meets the need of the industry bringing new insights, tools and techniques that enables retailers to sell more and lose less.