MODULE-3

STORE SECURITY ASPECTS

• Whether you’re a big box retailer or a family-run shop, security concerns in the
retail market include detecting shoplifting, stopping inventory shrink and theft to
parking lot surveillance. Retail system installations also must address the safety
of employees and customers, providing convenience that doesn’t adversely
impact the customer service experience.

• TWO TYPES OF SECURITY:-

• Personal security and
• Merchandise security

PERSONAL SECURITY

Many shoppers and employees feel less safe at retail establishments than did
before, with these results: some people are unwilling to shop at night. some
people age 60 and older no longer go out at all during the night. Almost one-half
of shoppers believe malls are not as safe as they once were. Parking is a source of
anxiety for people who worry about walking through a dimly lit parking lot. As
one industry observer noted, “Retailers must be proactive. They should take
precautions to be better prepared and make the shopping experience as safe and
enjoyable as possible.” These are among the practices retailers are utilizing to
address this issue:
• Uniformed security guards provide a visible presence that reassures customers
and employees, and it is a warning to potential thieves and muggers. Some malls
even have horse-mounted guards. This is a big change: “Mall management
wants us to be less ambassadors of goodwill and is asking us to take a more
aggressive approach.

They are asking us to not watch and wait too long if we spot suspicious
behaviour. Thats lost package that we would have delicately brought to lost and
found, we wont do that this year. From a customer’s point of view, that lost
package is really lost.
• Undercover personnel are used to complement uniformed guards. These guards
often work in teams.
• Brighter lighting is used in parking lots, which are also patrolled more frequently
by guards. These guards more often work in teams.
• TV cameras and other devices scan the areas frequented by shoppers and
employees.7-Eleven has an in –store cable TV and alarm monitoring system,
complete with audio.
• Some shopping areas have curfews for teenagers. This is a controvesial tactic.
• Access to store backroom facilities (such as storage rooms) has been tightened.
• Bank deposits are made more frequently-often by armed security guards.
MERCHANDISE SECURITY-

• Merchandise security is provided through the various ways-

• Closed-circuit TV.
• Electronic Article Surveillance Systems.
• Convex Mirrors
• Alarms
• Point of Sale Machines.
• Freezers
• Employee Screening And Training

• Closed-circuit television (CCTV) is the use of video cameras to transmit a signal

to a specific, limited set of monitors. It differs from broadcast television in that
the signal is not openly transmitted, though it may employ point to point wireless
links. CCTV is often used for surveillance in areas which need security, such as
banks, casinos, and airports or military installations. Increasing use of CCTV in
public places has caused debate over public security versus privacy. In industrial
plants, CCTV equipment may be used to observe parts of a process that are
remote from a control room, or where the environment is not comfortable for
humans. CCTV systems may operate continuously or only as required to monitor
a particular event.

• Electronic article surveillance is a technological method for preventing

shoplifting from retail stores or pilferage of books from libraries. Special tags
are fixed to merchandise or books. These tags are removed or deactivated by the
clerks when the item is properly bought or checked out. At the exits of the store, a
detection system sounds an alarm or otherwise alerts the staff when it senses
active tags. For high-value goods that are to be manipulated by the patrons, wired
alarm clips may also be used; these, being less common and technologically less
mysterious, are not covered by this article.

• Point of Sale Machines:-

Point of sale machines or ‘pos’ as they are normally called, are primarily
used for the purpose of billing at retail stores. These machines usually consist of a
built-in CPU cabinet, a small monitor, a compact keyboard and a small in-built
printer, all as one unit.
This is crucial as most of these machines have proprietary equipment in them,
which are not repairable or replaceable from the open market.

• Freezers:-
Freezers are used only for storing highly perishable food products and
their frequent breakdown could lead to enormous losses in terms of damaged
products. Thus good and robust freezers are essential to withstand the outlet’s
continuous 24-hour operation since the freezers would have to remain working
even when the store is closed at night.
 • Employee Screening And Training:-

After a series of bad experiences, most retailers in the west now have a
compulsory screening policy in which they undertake extensive pre-employment
reference checks for every prospective employee. Compulsory drug tests are also
frequent with international retailers. Apart from this, all employers try their best to create
a family type culture within their stores to encourage honesty and integrity. An honest,
good ,agile employees is , in fact, the single most effective deterrent to shoplifting.

STORE SECURITY
SHOPLIFTING:-

• Shoplifting is a common crime that occurs when someone steals merchandise

offered for sale from a retail store. Shoplifting from retail stores costs merchants
an estimated loss of 13 billion dollars per year.

• To commit shoplifting one must "intend" to permanently deprive the merchant of

the value of the merchandise. Shoplifting most often occurs by concealing
merchandise in a purse, pocket, or bag, but can occur by a variety of methods.

• Most shoplifters are amateurs. However, there are growing numbers of organized
theft rings and people who make their living by stealing from retail stores.
Amateur shoplifters can be highly skilled, and some steal almost every day, but
don't do it to make a living. Most amateurs are opportunistic, crude in their
methods, and are detected more often than others. Professional shoplifters run the
gamut from being highly skilled to thug-like.

• Some professionals work in teams or use elaborate distraction scenarios. The

crude professionals sometimes use force and fear much like gang intimidation and
often commit grab-and-run thefts. Being a professional means that they steal
merchandise for a living, and like other trades, practice makes perfect. Thoughtful
professionals are very difficult to stop in a society where retail stores openly
display their merchandise.

SHOPLIFTING PREVENTION

• To combat these losses, merchants have had to take sometimes extreme measures
to control shoplifting. Most large retailers employ plain-clothes floor detectives to
observe customers as they shop. Many shoplifters are detained and arrested for
their indiscretions.

Plain-clothes floor detectives alone are not enough of a deterrent because they are
seemingly invisible. Many stores use video surveillance cameras and electronic
article surveillance (EAS) devices attached to their products that cause alarms to
go off if not deactivated by the cashier. Others secure expensive and high theft
items like small leather items, perfume, cosmetics, tools, liquor, or cigarettes in
locked enclosures. Other retailers use cables or hanger locks that require the
assistance of a sales associate to unlock the expensive item of clothing before you
can inspect it.

• Shoplifters want product accessibility, privacy, and prefer stores with few anti-
theft methods in place. It is unfortunate, but anti-theft procedures sometimes
affect the shopping experience for all of us, especially if applied thoughtlessly.
• SHOPLIFTER DETENTION

• The practice of physically detaining and arresting shoplifters is not without risk.
Besides the physical contact that is sometimes necessary to stop an aggressive
shoplifter, a merchant has the legal risk of being sued for doing so incorrectly. In
America, customers get outraged when they feel they are being watched or if they
are questioned about a suspicious transaction. Many merchants have been sued by
their former customers for allegations of false arrest, false imprisonment,
malicious prosecution, excessive use of force, and assault.

• What Items are shoplifted the Most?

• What should employees do?

• ALARMING FACTS ABOUT SHOPLIFTING

• Shoplifters steal over $20 billion worth of goods from retailers each year.
• Shoplifting is America’s #1 property crime.
• 1 in 11 people shoplift. (There are approximately 23 million shoplifters in the US)
• 25% of these shoplifters are children. (That’s 5,750,000 children who are facing a
life of crime.)
• 55% of adult shoplifters say they started shoplifting in their teens.
• 86% of kids say they know other kids who shoplift. 66% say they hang out with
those kids
• 47% of high school students have shoplifted within the past year.
• Shoplifting often leads to more serious juvenile crime.
• Shoplifting spans all economic and cultural conditions.
• The vast majority of shoplifters are individuals who shoplift not because of
financial pressures, but because of social, peer and personal pressure.
• The costs related to shoplifting are absorbed by the honest consumer who pays
higher prices to cover the loss of merchandise, loss prevention measures, etc.

• Shoplifting is a big problem for retail businesses. It accounts for over a third of
total shrinkage. The table below, from a study conducted by Hayes International,
estimates the number of theft incidents and dollars lost to shoplifters:
STORE FORMAT DECISION

• A key store format decision for a chain retailer is whether to use prototype stores
whereby multiple outlets conform to relatively uniform construction ,lay out and
operation standards

ADVANTAGES

 Which make centralized management control easier

 reduce construction costs
 standardize store operations
 facilitate interchange of employees among outlets
 display a consistent chain image
 Disadvantages
 lead to inflexibility
 failure to adapt to local customer needs
 too little creativity

• Together with prototype store, some chains use rationalized retailing programs to
combine a high degree of centralized management control with strict operating
procedures for every phase of business

SIZE DECISION
• Many retailers use one or both of two contrasting store-size approaches to be
distinctive and to deal with high rents in some metropolitan markets

Huge assortment and size is used to dominate small stores

In secondary sites-rent will be low so can go for large size-if they can attract
enough customers
In saturated market or small market-small size is better
Population size and density
Purchasing power
Area available

• I short, size decision depends on competitive situation ,market size and customer
characteristics and location
LAY OUT SELECTION

• Select a lay out which allows for the complete presentation of the merchandise to
the customer.
• Encourage customer to move around the complete store and at time ,make an
unplanned purchase
• Balance between display and service
• provision for disabled persons
• Type of customers-teenagers old people etc

SPACE ALLOCATION

• APPROACHES
Top-down space management approach- divides the space in to categories, and
then works on product lay out
Bottom-up space management approach- begins planning at the individual product
level and then proceeds to the category and total store

• ALLOCATION-Each store has a total amount of floor space to allot to selling

,merchandise, personnel and customers
Selling space- Display, interactions between sales people and customers, demonstrations
and so on
Merchandise space- to stock non displayed items
Personnel space- set aside for employees to change clothes and to take lunch and for rest
rooms
Customer space- contributes to shopping mood. it may include benches, chairs ,dressing
room, restaurant, parking etc
PLANOGRAM

• More firms now use Plano grams to assign space. A Plano gram is a visual
representation of the space for selling ,merchandise ,personnel and customers-as
well as for product categories.
DETERMINATION OF SPACE NEED

• Model stock approach- Determines the floor space necessary to carry and
display a proper merchandize assortment. Apparels and shoe stores use this
method
• Sales productivity ratio- Assigns floor space on the basis of sales of profit.
Highly profitable product categories get large space. Food stores and book stores
use this method
• Analysis of stock to sales ratio (seasonal products)
• Product shelf life and durability
• Consider best presentation method
• Emphasis the focus category of the retailer
• Future sales potential

BUDGETING, CREDIT MANAGEMENT & RESOURCE ALLOCATION

Budgeting
• Outlines a retailer’s planned expenditures for a given time based on expected
performance.
• Costs include satisfying target market, employee and management goals.

Budgeting- Benefits to a Retailer

• Expenditures linked to expected performance, and costs can be adjusted as goals
are revised and thus enhance productivity.
• Resources are allocated to the right departments, product categories, etc.
• Spending for various depts., pdt categories etc, is co-ordinated.
• The goal of efficiency gets prominence.
• Cost standards can be set.
• Helps prepare for the future rather than react to it.
• Helps monitor expenditures during a budget cycle. (e.g. cash allotment)
 • Can analyze planned versus actual budgets.
• Cost and performance can be compared with industry averages.

Preliminary
Budgeting
decisions
Who
Develops
Budgets?
What is the
Time
Ongoing
frame? BudgetingProcess
How often
Are budgets
Planned? Performance Planned Actual Monitoring
Goals
What cost Standards expenditures expenses results
Categories
Are used?
Adjustments
What level
Of detail
Is used?
How flexible
Are
budgets?

CASH FLOW- IMPORTANCE

• It relates to the amount and timing of revenues received to the amount and timing
of expenditures to a specific time.
• In CF mgmt usual intention is to make sure revenues are received before
expenditures are made.
• Under-estimating costs and overestimating revenues, both of which affect cash
flow are leading causes of new business failures.

RESOURCE ALLOCATION

• In allocating financial resources, both the magnitude of various costs and

productivity should be examined. Each has significance for asset mgmt and
budgeting.
 Magnitude of various costs

Expenses

Capital Operating
Expenditures Expenditures

Long term investments in Short term selling and

Fixed assets Administrative Costs
in running a business.

PRODUCTIVITY
• Is the efficiency with which a retail strategy is carried out.
• Different retail strategy mixes have different resource needs.
• Productivity must be based on norms for each type of strategy mix.

2 WAYS TO IMPROVE PRODUCTIVITY

• Improve employee performance, sales per foot space and other factors by
upgrading training programs, increasing advt, and so forth.
• Reduce costs by automating, having suppliers do certain tasks and so forth. Also,
a small core of full-time workers during non-peak times, supplemented with part
timers in peak periods.

2 PRACTICED STRATEGIES TO RAISE PRODUCTIVITY

• Improving Space Productivity (Sears)
• Tuesday Morning shuts its stores for all of Jan and July- and parts of Feb, April
and August there by saving on labor expenses, utilities, etc.

CREDIT MANAGEMENT

• Consists of Operational decisions to be made:

• What form of payment is acceptable?
• Who administers the credit plan?
• What are customer’s eligibility requirements for a check or credit purchase?
• What credit terms will be used?
• How are late payments or non-payments to be handled?