Today’s retail environment is characterized by slim profit margins and constant risks, making asset protection a critical component of business success.

Asset protection encompasses a wide range of strategies and practices designed to safeguard a company’s resources, from physical merchandise to financial assets and brand reputation. At its core is something we often overlook: the human element.

The current state of asset protection in retail reflects a growing recognition of this human factor, with many retailers shifting towards more holistic approaches that leverage the unique capabilities of their workforce while also considering the customer experience.

Despite technological advancements in security systems and inventory management, people remain the cornerstone of successful asset protection strategies. It’s a delicate equilibrium, a high-wire act performed with precision, where success means standing ovations in the form of protected assets and satisfied stakeholders.

The key to longevity

Asset protection extends far beyond the conventional notion of preventing shoplifting. It involves implementing strategies to reduce shrink, which can significantly impact a business’s profitability.

Shrink can occur from various sources, such as shoplifting, internal theft, inventory loss, and operational or human errors, as well as damage to merchandise. Each of these factors contributes to the overall loss a retailer faces, making it essential to have effective loss prevention measures in place.

Retail theft, both internal and external, accounts for 65% of inventory shrink according to the 2023 Retail Security Survey. This study, a collaboration between the National Retail Federation (NRF) and the Loss Prevention Research Council (LPRC), also noted that in certain industry sectors, theft-related losses can reach up to 70%.

The repercussions of inadequate asset protection go beyond immediate financial losses. They can lead to increased insurance premiums, damaged customer trust, and even legal liabilities. By tackling these issues head-on, retailers can protect their profits and maintain a healthy bottom line, especially when profit margins are so tight.

Fostering responsibility

Employees are the frontline defenders in loss prevention. Their daily interactions with customers, intimate knowledge of store operations, and ability to spot unusual patterns or behaviors make them invaluable assets in the fight against theft and fraud.

Marvin Ellison, CEO of Lowe’s, has garnered attention for his strategy to tackle retail theft. He suggests that improving customer service by hiring more staff and enhancing employee training, could be the solution to reducing shoplifting.

When properly trained and motivated, staff members can create an environment where dishonest behavior becomes more difficult and less attractive. Engaged and informed staff can effectively communicate best practices, maintain operational standards that reduce opportunities for internal theft and errors that can lead to inventory discrepancies.

A straightforward approach to deterring shoplifting involves engaging potential thieves with genuine, respectful interaction and assisting them as one would any other customer. Greeting and acknowledging a potential shoplifter complicates their intentions, as it creates awareness of the risk of being caught and identified if they proceed with their actions.

Joe Coll, who oversees asset protection operations and strategy at Macy’s, has reported similar findings, noting that exceptional customer service plays a crucial role in their theft prevention efforts.

When security becomes a shared value, it permeates all aspects of the business, from customer service to inventory management. Leadership plays a crucial role in cultivating this culture by consistently emphasizing the importance of asset protection, recognizing and rewarding vigilant behavior, and leading by example.

Open communication channels that allow employees to report concerns or suggest improvements without fear of reprisal are also essential. By fostering a culture where everyone feels invested in protecting the company’s assets, retailers can create a more robust and adaptable security environment.

Meaningful interactions and engaged customers

Customers are also key players in asset protection because their behavior can impact security. The vast majority of shoppers are honest and can become allies in maintaining a secure retail environment.

Clear signage, and open communication about security measures can all contribute to a collective sense of responsibility. A clothing store might place signs near the entrance and throughout the store, stating, “Your safety is our priority! We monitor with security cameras 24/7.” This not only reassures customers but can also encourage them to alert staff if they notice someone acting suspiciously.

Retailers are increasingly adopting innovative store designs and security strategies that effectively reduce theft while maintaining a welcoming shopping environment, striking a delicate balance between loss prevention and customer trust.

A prime example of this approach can be seen in a recent Walgreens initiative. The pharmacy chain revamped a high-crime Chicago store into a tech-focused prototype. The South Loop location now boasts an open, well-lit design with a front-desk for customer service, pharmacy assistance, and order pickups.

Providing easy ways for customers to share their thoughts on security measures, like suggestion boxes, can also foster a sense of community and collaboration without detracting from their shopping experience.

The fine art of loss prevention

Loss prevention and asset protection professionals play a vital role during crises, collaborating with store operations and supply chain teams to ensure stores remain operational, secure, and well-stocked. Those with strong analytical abilities often leverage advanced technology and statistical methods to provide valuable insights and boost company profitability.

Below are several typical positions in the loss prevention and asset protection field, and their primary responsibilities:

In-Store Agent / Loss Prevention Associate
This entry-level role is where many of today’s LP leaders began their careers, providing a solid foundation in the field. Key responsibilities include apprehending shoplifters, handling employee theft situations, and overseeing security, safety, and asset protection measures within a single store location.

This position offers an excellent opportunity for individuals to learn both the intricacies of the loss prevention profession and the broader retail business. The hands-on experience gained in this role often leads to rapid career advancement, with many associates moving on to multiple store responsibilities or investigative roles within a short timeframe.

Investigator
Investigators play a crucial role in preventing, identifying, and addressing both internal and external theft and fraud in retail environments. Their responsibilities typically include:

– Gathering evidence through meticulous research and interviews to build cases
– Developing strategies and tactical plans to resolve theft and fraud incidents
– Collaborating with law enforcement when necessary

Some retail organizations have specialized units, such as ‘’Organized Retail Crime Teams’’, where multiple investigators pool their expertise to tackle major theft situations. These teams work cohesively to investigate losses and coordinate with law enforcement agencies to resolve significant theft cases.

Regional LP Manager
A regional LP manager oversees the safety and security of a retailer’s assets across a specific geographical area. This role involves:

– Conducting regular store visits to identify operational and theft-related issues
– Implementing and leading in-store training programs to communicate strategies and processes to employees
– Analyzing key performance indicators and exception-based reporting to reduce losses across multiple retail locations

The regional LP manager serves as a link between individual store operations and the broader asset protection strategy of the organization.

Data Analytics
The data analytics role in loss prevention has seen significant growth and evolution over the past decade. This position requires a unique blend of retail and LP knowledge combined with advanced analytical skills. Key aspects of this role include:

– Identifying patterns and recognizing risk and threat vectors from various data sets
– Formulating actionable insights to drive loss prevention strategies
– Supporting multiple functions including asset protection, fraud mitigation, and risk management

While some data analysts may come from traditional LP backgrounds, many bring valuable skills from disciplines such as finance, business analytics, operations, risk intelligence, and cybersecurity. The increasing reliance on data-driven decision-making has made this role integral to the success of modern loss prevention efforts.

Risk Manager or Enterprise Risk Manager
The risk manager focuses on identifying, assessing, and mitigating potential risks that could impact a company’s financial health or brand reputation. In the retail sector, this role has become increasingly important due to the expanding landscape of global threats and domestic risks. Key responsibilities include:

– Developing comprehensive risk mitigation strategies
– Assessing potential impacts of various risks on the organization
– Collaborating closely with other departments, particularly loss prevention

In some organizations, loss prevention leaders may also oversee risk management functions due to the similar mindset required for risk mitigation. Even in companies where LP and risk management are separate, a strong partnership between these functions is crucial for effective risk management.

Director of Safety and Security
This role holds a wide range of responsibilities centered around protecting the organization’s assets, employees, and customers. Key aspects of this role include:

– Establishing and implementing security strategies and policies
– Conducting regular audits and inspections to ensure compliance and effectiveness
– Training staff on security protocols and best practices
– Managing security systems and technology

This role requires a comprehensive understanding of both physical security measures and evolving security technologies to create a safe environment for all stakeholders.

Vice President of Operations, Loss Prevention and Risk
As a top executive role, the VP is responsible for developing and overseeing all aspects of security and risk management within the retail organization. This position involves:

– Leading a diverse team of LP, AP, analysts, and fraud professionals
– Developing comprehensive strategies for loss prevention, asset protection, and risk mitigation
– Managing crisis situations and developing response protocols
– Making high-level decisions on security investments and technology implementation
– Ensuring compliance with relevant regulations and industry standards

This executive role demands a leader with a deep understanding of operational procedures, risk management principles, and loss prevention strategies. The Vice President must be able to balance the need for robust security measures with the operational efficiency and customer experience requirements of the retail environment. 

Technology as a supportive tool

Advanced surveillance systems, inventory tracking software, and data analytics can significantly enhance human efforts in detecting and preventing crime and fraud. The key is to view technology not as a replacement for human involvement, but as a means to augment and support it.

For instance, artificial intelligence-powered video analytics can alert human security personnel to suspicious behavior, allowing them to intervene more effectively. Advanced inventory management systems can help employees identify discrepancies more quickly and accurately.

By integrating technology thoughtfully into human-centric asset protection strategies, retailers can create a more comprehensive and effective security framework.

At RetSci, we recognize that these technological tools are most effective when they support and enhance human decision-making processes. As David Shugan emphasizes, “Retailers often react to shrink with urgency and emotion, but PRISM (Predictive Risk and Insightful Shrink Management) eliminates that uncertainty. It’s all about using the data at our disposal to stay ahead of threats, allowing retailers to make decisions grounded in facts, not fear.”

Furthermore, Shugan highlights the proactive nature of effective asset protection tools: “PRISM takes the lead in preventing shrink before it impacts the bottom line. By analyzing trends and predicting where the risks are, we give retailers the foresight to act, moving from reactive responses to proactive solutions.” This demonstrates how technology can empower human decision-makers to anticipate and address potential issues before they escalate.

Ultimately, the goal is to create a synergy between human expertise and technological capabilities. As Shugan notes, “PRISM isn’t just another tool to track what’s already happened—it’s a system built to anticipate and prevent losses before they occur. By using factual data and predictive insights, we empower retailers to focus on long-term solutions rather than short-term reactions.” This approach allows retailers to harness the power of data while still relying on human insight and strategic thinking to drive their asset protection efforts.

Navigating the future with human insight

Implementing a human-focused asset protection strategy is not without its challenges. One of the primary obstacles is overcoming the traditional view of asset protection as a purely technological or policy-driven endeavor.

Another significant challenge lies in maintaining employee engagement and vigilance over time. Initial training and enthusiasm can wane, leading to complacency that can compromise security efforts. Moreover, there’s the delicate balance of empowering employees to take action while ensuring they don’t overstep legal or ethical boundaries in their zeal to protect assets.

Privacy concerns, both for customers and employees, must also be carefully navigated when implementing any asset protection measures.

Finally, measuring the effectiveness of human-centric strategies can be more complex than quantifying the impact of technological solutions, requiring retailers to develop new metrics and evaluation methods.

As the lines between digital and physical retail blur, employees will also need to develop new skills to protect assets across multiple channels. We may see a shift towards more specialized roles within asset protection teams, with employees receiving advanced training in areas such as data analysis, behavioral psychology, and crisis management.

Additionally, there may be an increased focus on collaborative efforts between retailers, law enforcement, and communities to address systemic issues that contribute to retail crime.

Advancements in artificial intelligence and machine learning will continue to enhance surveillance and predictive capabilities. The most successful approaches will be those that recognize the unique capabilities of human intuition, problem-solving, and interpersonal skills, integrating them seamlessly with technology.