A Practical Way to Shrink Shrinkage

According to recent research, shrinkage, including theft, stock loss and damage, amounts to E18 billion across Europe -- roughly the equivalent of the Slovakian economy. Many companies simply don't know the real rate of shrinkage in their operations, or what is causing it. Within stores, the reasons for 60% of all shrinkage remain unknown. Many companies still equate shrinkage with shoplifting, even though shoplifting is just one of many possible causes of shrinkage -- perhaps accounting for less than 40% of all stock losses. Some stock losses are the result of process failures where goods are lost through mis-picks, mis-deliveries, mis-counts or simple mis-scanning at the checkout. Retailers often deploy solutions such as defensive merchandising which are actually worse than the problem they are trying to address, in terms of their effect on sales and profits. The "good management" approach is systematic, rigorous and holistic. Instead of treating stock loss as an isolated "security" problem, it tackles the underlying causes.