5 Ways Loss Prevention's Reputation is Changing for the Better

We recently partnered with Loss Prevention Magazine to survey nearly 100 LP professionals who shared their perception of Loss Prevention’s value within their organization. Survey respondents represented multiple industries and loss prevention or asset protection teams that range from 1 person to over 500 members across multiple industries.

Overall, LP leaders showed frustration with their outdated reputation for “chasing the bad guys” but are also developing ways to add value to their organization in order to change that reputation for the better. Here are five ways they are succeeding.

Becoming an Operations Partner

Many LP teams are becoming the go-to resource for fast, accurate reporting for operations. They are also driving a culture of revenue optimization, according to 81% of survey respondents.

Timely reporting helps operational teams pinpoint specific issues related to customer experience, training, promotion handling, inventory, labor, and shrink in addition to activity negatively impacting sales. For instance, reporting can identify particular SKUs prone to voids or price overrides indicating an impact to customer experience and potentially on sales of that item. Reporting on item behavior can also help merchandising teams reposition products to attract customers and reduce loss.

Large and small brands embrace a culture of revenue optimization by targeting specific ways to reduce loss and expenses. Reporting and analytics highlight specific vulnerability areas, helping LP partner with other departments, developing policies and procedures that correct issues, and lower costs.

As one respondent noted, “The well-informed LP professional knows that providing enlightening operations information is a sure way to solidify a positive relationship.”

Demonstrating a Broader Impact Beyond Theft

Directors and VPs agreed that LP departments contribute to corporate innovation. Reporting and analytics allow LP to experiment beyond routine measurements and monitoring. As a result, LP helps companies find new ways to drive revenue while increasing the use of technology and adoption, improving policies, and sharing technology with peer departments.

The survey indicated that 85% of all respondents agreed that LP’s responsibility goes beyond routine monitoring. LP continues to make a positive impact as 95% of Directors, and 100% of VP or higher agreed that LP departments are experimenting with new tools and measurements, driving innovation across the company.

Maximizing Revenue

Does LP’s ability to produce fast, accurate information and partner with their peers make a difference? Survey respondents overwhelmingly agreed that LP’s efforts have a direct impact on the bottom line.

VP's and Directors who responded to the survey showed a unique perspective. As these positions are at higher levels in the organization and may have greater visibility to overall corporate reporting, they know LP's impact.

LP profit impact by respondent

Growing competition, labor issues, and supply chain bottlenecks mean that everyone must work harder to serve customers and positively impact the bottom line. Senior-level decision-makers and executives understand the impact that LP teams can have on a business's bottom line. LP’s efforts to maximize revenue during challenging times put them in a unique position to contribute to overall business strategy far beyond “catching the bad guys,” earning them a seat at the table for future business initiatives.

Go-To Source for Intel

Decades ago, LP professionals would examine miles of transaction receipts and hours of video footage looking for suspicious activity. With traditional exception-based reporting solutions, LP professionals needed to become SQL coding experts in order to query their data and run even a basic report.

Luckily, today’s data is much more accessible, helping LP to be more productive by identifying the exceptions out of the massive amounts of data rather than one transaction at a time review. In addition, data analytics combine multiple data sources and feeds and have intuitive query engines, allowing LP to spend less time analyzing their data and more time taking action.

Because LP uses advanced tools, they have access to transactional data, and the trends within, that can be more easily shared with other departments to identify inefficiencies, opportunities for policy improvements, and more. The survey showed that LP can be, and often is, the source for fast, accurate data that other departments need to succeed.

The survey showed that 81% of respondents agreed that they integrate their LP analytics tools with other department’s data streams to maximize ROI in the tool. One respondent commented that their store operations, inventory control, internal audit, legal, and COVID-19 committee use these LP tools almost as much as their department-specific tools.

Being Proactive, Not Reactive

LP professionals now have advanced tools to face even more significant retail challenges. LP departments are changing their strategies from being reactive to events, to being proactive about preventing them.

Addressing loss requires understanding what drives it. Taking an advanced approach to capturing, analyzing, and reporting helps LP professionals get to the root of profit loss and take specific corrective actions. Instead of sorting through millions of lines of POS records for unusual voids, refunds, or discounts, today’s solutions can automatically scan your data for these and other “red flags” such as cash drawer skims, loyalty/rewards abuse, multiple low-value sales, and more. By automating the distribution of vital reports, alerts, and customized dashboards, LP professionals can focus on staying proactive, searching for patterns that may indicate greater strategy or policy gaps that leave the business vulnerable to preventable loss.

The stakes have never been higher. The growth of organized retail crime (ORC), pandemic-related safety considerations, labor shortages, and growing customer expectations requires LP to keep the entire organization informed before critical issues can escalate and accelerate, impacting the business’ bottom line.

Ready for a seat at the table

As LP responsibilities expand and the industry embraces the concept of Total Retail Loss, LP’s reputation has changed as well. 93% of senior leaders understand that LP's role goes beyond catching bad guys and fraudsters, and as such, are no longer viewed as a “necessary evil” to their business. As one LP respondent noted, “We are a strategic business partner that is critical to profit protection, brand protection, and company growth.”

Download your free copy of the full 15-page report today to see the full results.