Issue 2 - 13th July 2009
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Retail Fraud
www.retail-fraud.com
 UK Online Fraud Report 2009 - in association with CyberSource
 


 

Welcome to the Retail Fraud Newsletter, bringing you the very latest intelligence in tackling retail fraud shrinkage. With insightful articles on shrink management technology, HR and legal comment and showcase examples of best practice from around the world.

John Wilson, Editor, Retail Fraud



Breaking News
 

No Changing of the Guard welcomed by BRC

A requirement for retailers to license in-house security guards would have added nothing but unnecessary costs and bureaucracy, said the British Retail Consortium (BRC).

The Security Industry Authority (SIA) last month announced that it did not find evidence of risk or threat to public protection to justify the Government introducing regulation for in-house licensing. The Government has agreed, requesting that the issue be re-visited in three years time.

The SIA currently licenses guards employed by security firms. Its investigation considered whether there was a case for extending licensing to in-house guards.

Retailing is the UK's biggest employer of in-house guards and the BRC provided extensive evidence to the SIA of the good practice adopted by its members.

In its report the SIA accepts BRC evidence that retailers have very good recruitment processes for security staff, including criminality checks and thorough training. The report has acknowledged that, "Quite often the training is to a much higher standard than the SIA approved training."

British Retail Consortium Director General Stephen Robertson said: "The Government is right to reject licensing for in-house security guards. It would have piled new costs and bureaucracy on to hard-pressed retailers while adding nothing to public protection.

"We told the SIA that licensing could not raise retailers' standards for recruitment and training because they are already higher than the SIA requires. Its report rightly accepts this.

"We're delighted that sense has prevailed. In its report the SIA acknowledges the good practice within retail, dismissing unsubstantiated claims that this is not so.

"Ultimately retailers live or die by their reputation with customers. No responsible retailer would employ security staff who put customers at risk."



Carphone's 'One-Stop' shops

The Carphone Warehouse has been highly commended for innovation in loss prevention and protecting it's products from fraud across Europe in the Retail Week Technology Awards 2009 staged in London last week.

Judges praised Carphone's new bespoke anti-shrink technology that it is rolling out across nine European territories in six languages for 'at-a-glance' measurement and management of its losses and to calculate business risk from procedural non-compliance.

After two years of planning and one year of software writing with The ORIS Group, 'One Stop' is a web-based 'dashboard' system that keeps shrink figures and margin erosion risk constantly in the eye line of the loss prevention team across Europe, as well as sharing data with front line store staff and senior executives.

The Margin Erosion Dashboard (MED) aspect of One Stop highlights the risks of procedural non-compliance in stores and the cost to the overall business. Developed with built-in task and content management tools to allow loss prevention executives to update the key performance indicators (KPIs) measured, the MED calculates, for example, the costs of staff failure to return airtime contract documentation on time or non-compliant contract documentation processes unique to the telecoms sectors and capable of generating financial penalties to the business.

"We are delighted to have come this far and be commended for our work by the judges who recognised the enormous work involved in rolling out 'One-Stop' across our markets concluding with the UK during March 2009. It is a tool that we have developed ourselves with the help of ORIS in order to get what we wanted from a very can-do' company that we have worked with for many years," says Justin Firlotte, European LP & Fraud Support Manager for The Carphone Warehouse.

"There is a risk to the business from non-compliance and the MED is there not to catch people out, but to empower them to proactively look at the risks in a detailed line-by-line and contract by contract way. Also, because it is all in one place it allows the business to manage loss and risk in a way we have not been able to do before. It reduces time because all staff have become more focussed upon delivering savings to the business. We want to reduce internal shrinkage and profit erosion by the end of the year and this tool is helping us to help ourselves."

Each market can write its own KPIs and rank them. It is multi-lingual for our pan-European business which means that it is totally fit for purpose and speaks our language in every aspect of the meaning," he adds.

Andrew Wood, Managing Director and ORIS founder, adds: "The tool also provides a Top 10 stores priority list for the LP teams to regularly visit them and because the data is available to all, LP managers and senior level staff can see how they compare to other areas. One-Stop is intuitive and built to Carphone's own requirements and, as such, adds new levels of flexibility as well as an ability to drill-down into more granular details that the business wanted to help manage shrink and risk."

 
     


Industry Trends
 

Half of UK shoppers look for 'Internet Shopping is Safe'(ISIS) logo when purchasing online

More than half of online shoppers look for the logo of Internet Shopping is Safe, according to new research.

According to the Kelkoo report 50% of customers shopping online look for the ISIS logo on accreditated retailers' sites.

Internet Shopping Is Safe (ISIS) is a merchant accreditation program run by the industry body for Internet Retailing, IMRG. Backed by SecureTrading and many larger retail brands, ISIS offers customers the confidence to shop online, knowing that bearers of the logo have signed up to a well respected accreditation program which includes best practice, a site audit and legal obligations at its core.

Rather like the old-style phone directories when customers looked for membership of accredited bodies including the Federation of Master Builders before engaging work to be carried out at their homes, modern shoppers are also looking for peace of mind in the wake of recent media stories about online fraud or identity theft.

As part of its ongoing fight against online fraud, SecureTrading has now joined forces with ISIS (Internet Shopping Is Safe).

SecureTrading argues that if customers are proactively looking for the ISIS logo, it is in the interests of all respectable online businesses to display it to increase consumer confidence.

 
     


Product Showcase
 

Crombie cuts theft by 50% and improves store operations

Crombie, the British clothing retailer renowned for its heritage, authenticity and quality has announced a partnership with Checkpoint Systems, to reduce shrinkage and improve store operations. Most famously recognised as creator of the world's finest coats, Crombie has installed Checkpoint's Style and Plaza EAS antennae to reduce theft. The retailer has also invested in the CheckCountTM visitor counting Service to improve store operations and increase the customer conversion rate in six of its eight UK stores.

Crombie was experiencing high shrinkage levels on certain product lines, and approached Checkpoint to help address the problem. The need was two-fold; a solution was required to address shrinkage in stand-alone stores and concessions whilst laying the foundations for long-term plans to migrate to a combined RFID and source tagging programme.

Adrian Roe, IT Manager at Crombie explains: "We needed to address our shrinkage problem as it was eating away at our bottom line. Particularly in the current economic climate, rather than cut our budget in this area, we realised we had to invest in security to protect our margins from further erosion.

"Checkpoint Systems is a market leader in this area and has a very good global labelling network. Coupled with the fact that it also supplies one of the UK's leading department stores with its EAS technology, it made sense to enter into discussions, given that our RF labels had to be compatible with their systems for Crombie concession stores. And so far it has proven to be a prudent business decision.

"The EAS system has been installed for a number of months now and we have already seen a great improvement in our stock loss figures. One store in particular, that at one stage was recording the highest level of stock loss of them all, has already achieved a 50 per cent reduction in shrink." added Roe.

In addition to EAS technology, Checkpoint is also supplying Crombie with the very latest version (4.1) of its CheckCountTM visitor counting Service. Previously, the retailer had little or no visibility on the number of visitors to its stores and therefore no clear idea of each outlet's trading performance in relation to potential customers.

CheckCountTM operates by automatically collecting and transferring store visitor information via a secure server into a web-hosted site for reporting and evaluation. Having installed CheckCountTM and integrated it with its stores' transactional data, Crombie can now obtain detailed analyses on the performance of its outlets and create customised customer conversion rate reports.

Roe added: "The most important reason for us choosing CheckCountTM was the fact that it can be integrated with our EPOS data to provide us with details of customer conversion rates. We needed more of an insight into our business performance and the reporting and analytical capabilities CheckCountTM offered met this requirement perfectly. Having a greater insight into visitor numbers is essential for managing and improving our overall business performance and increasing sales."

Neil Matthews, Vice President, Northern, Central and Eastern Europe, added: "Adding a prestigious brand like Crombie to our client portfolio was a great coup for us, and it's satisfying to see that our systems are already delivering results.

"Investing in our EAS technology will certainly help Crombie lower its shrinkage levels and we will continue to work with them to ensure we tackle the issue effectively. At the same time, installing the CheckCountTM will not only deliver specific insight into certain areas of interest but will also help to improve Crombie's overall business performance and increase profitability."

Crombie is also working with Checkpoint to create bespoke labels overprinted with its logo for both men's and women's ranges.

 
     


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John Wilson
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