Stopping Retail Shrink in its Tracks

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According to the National Retail Foundation, the shrink rate in 2018 was 1.38%, accounting for $50.6B in loss for retailers. Retailers are used to forecasting sales, but it’s time to start forecasting shrink. By doing so, you can find loss prevention trends in your company that point you to operational or process changes that will make a positive difference to your bottom line. With an estimated 60 factors and activities that can contribute to shrink within the four walls of a store, it can be a challenge to focus scarce store resources on the right mitigation activities.

It’s not too late to improve 4th-quarter profits.

With the Holiday sales increase comes that Grinch that can literally steal your company’s joy… shrinkage. What’s your strategy for improving 4th quarter profit margins that take a hit due to operational mistakes, cashier error, and ignored inventory check-in process? Logic understands shrink causal factors and the related predictive analysis that can reduce margin erosion and;

  • Reduce revenue leakage
  • Improve store operations efficiency
  • Improve planning for financial budgeting

Grinch pointing finger

Focus your Store Ops and LP Teams on high-risk areas with predictive analytics.

By clustering stores with similar variables like high manual stockroom adjustments, refunds without a receipt, and high on-hand adjustments, Logic can develop a predictive model, and perform analysis that points to high-risk Stores, POS and operational processes, and employees. Store Operations Leaders and the Loss Prevention team can then focus on the specific shrink mitigation activities relevant for that store and focus their efforts on targeted areas to stop suspicious activities before they begin.

Things you can do today to prevent shrink:

  • Cluster stores with similar high-risk indicators.
  • Pay close attention to high manual stock or on-hand adjustments, and large numbers of refunds without receipts.
  • Identify patterns of unusual POS transaction activity.

Don’t let unchecked shrink spoil your holiday cheer—or your holiday profits!

Our team of Logicians is ready to do the operational, actionable analytics to identify your company’s high-risk shrink areas. Let’s talk about how we can mitigate that Grinch together!


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