4 Tips to Reduce Retail Shrinkage

Eric White (retail security expert with Tyco Integrated Security) joins Focus on Suppliers to explain shrinkage and how it impacts replenishment.
Shrinkage has 2 aspects:
An administrative aspect, which is how you account for the product
The retail aspect, which is due to internal or external theft.
How to avoid shrinkage:
1. Inventory accuracy is critical on the administrative aspect. “Inventory accuracy is critical. It’s critical not just for shrink reduction but also for improving sales. No one wants inventory distortion, and accurate inventory forms the basis of a successful operation.”
2. Embrace technology. Smart labels (also called RFID tags) is a technology that can help track every product purchased. RFID makes shopping faster and shoplifting harder.
3. Keep a well-stocked shelf. White says, "A clean, fresh store will be a symptom of a well-run store, and that means that your inventory is probably accurate. And people who steal are less comfortable operating in that environment."
4. Put up road blocks. Spend 95% of your time and resources doing what you do best: producing and selling your product. Spend the other 5% looking at your product from another perspective: someone who might want to steal it and think of innovative ways to slow them down.
Products more vulnerable to theft:
Color cosmetics, OTC, electronics, and any higher price point item or highly sought after items.
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