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Loss Prevention

Detailed Improvement

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E ach transaction in every retail location adds to a mountain of data about the customer, the product and the cashier.

But with so much information available, it can be overwhelming to figure out what to look for, and how to use it. What Sally Beauty Holdings needed was a way to see what happened at the point of sale, with the goal of improving the customer experience while monitoring cashier training and for potentially illegal activities. The company, which operates more than 4,000 stores worldwide, tapped software-as-a-service (SaaS) retail analytics company Actionable Data Solutions (ADS). Formerly known as ShrinkTrax, ADS has worked with clients including Nike Retail, Boots the Chemist and Au Bon Pain.

“This provides a way of really understanding what’s happening at the point of sale,” says Mike Povendo, Sally’s vice president of loss prevention and safety. “A lot of us think we know. But [when] you’re there at the point of sale as an associate with the customer, and trying to remember how to handle something, or ring something up, it can get pretty tenuous when a customer is standing there saying, ‘I’m in a hurry.’”

Sally, which has completed the technical implementation and begun to roll out ADS to its 2,900 domestic stores, has zeroed in on coupons as a key performance indicator. “If we go back to our partners, and say, ‘We exercised this coupon 10,000 times’ ... we may get an allowance,” Povendo says. “But then if we go to them and say, ‘We weren’t able to capture these coupons correctly,’ they’ll look at us and say, ‘I’m sorry, no allowance for you.’

“It gets down to being able to identify those issues and understand what we need to fix to improve our level of service while enhancing our value for our customers,” Povendo says.

Improving cashier performance
ADS can put the data in the hands of whomever the company appoints; there are no limits on how many users can access the information. At Sally, information is handled at the district level; other retailers chose to make the data available at the store level.

Tops Markets, with 127 company-owned full-service grocery locations operating in upstate New York and northern Pennsylvania, sees ADS primarily as a cashier training tool.

“We’ve seen a little bit of everything,” says Mike Metz, Tops’ vice president of information technology. “It’s helped us in training if they’re struggling with a certain part of the cashier day-to-day functionality, like coupons and excessive voids. We’ve also seen where customers are abusing our various promotions. We’ve been able to identify those transactions and take necessary action.”

Tops has been a longtime client of ADS, taking full advantage of the company’s Retail Operational Consultants (ROCs), who monitor data to point out anomalies and recommend best practices.

Povendo says the ROCs are a valuable addition to Sally. “We work with them extensively and they help us with training the end user and supporting our needs,” he says. “They don’t try to fit us in their ‘retail box.’”

That’s just how it’s supposed to work, says Kyle Harris, ADS’s managing director. “Our consultants work as an extension of the client’s team to make sure the analytics are tailored to the specific needs of that client’s business,” he says. “The ROCs are available and responsible to the client to ensure that the solution is being utilized to its greatest potential and for the best implementation value.”

It’s a powerful relationship at Tops, Metz says. “Our ROC is very important to us, mostly on the asset protection and loss protection side, helping counsel us and guide us as we utilize the tools and applications,” he says. “We’ll give them transactions or send them logs and see if they come up with the same conclusions as we have.”

A lot of that means looking for exceptions to the norm, such as excessive voids or coupons, or opening cash drawers without sales. “In very few cases is it an LP incident,” Metz says. “It’s usually a training opportunity, or maybe discovering that being a cashier is not [an associate’s] strongest attribute and they are more valuable to us working in another area of the store.”

ADS also offers what it calls an Actionable Data Event (ADE), which notifies store managers about opportunities for improvement and requires that managers provide follow-up information on how a situation was resolved. ADE focuses on delivering tailored mentoring for employees to make them aware of the company’s expectations and that they are accountable for their actions.

“When you initially launch an ADE campaign, the manager responds 40 percent of the time,” says Harris. “Very quickly they understand what [it] is able to deliver, and how well targeted it is to profit-building opportunities in their stores. The resolution rates increase to the 90-95 percent range because accountability tracking offers corporate transparency.”

Rapid results
Pet Supplies Plus installed ADS in its 105 corporate-owned pet supply stores late last year, and any issues raised by ADS are handled by the store managers. “It’s been pretty seamless,” says Carol Hudecek, the retailer’s director of internal operations. “Instead of [managers] having to wade through Excel files or electronic documents, it brings things up in a neat package.”

Pet Supplies Plus has ADS flagging numerous events with broad parameters, but Hudecek is honing those so that the information provided can “impact potential shortage the most.”

In the first three months of use, Pet Supplies Plus saw voids as a percentage of sales decrease 8 percent. “I think a lot of that was less about theft and more about training,” Hudecek says. Pet Supplies Plus will soon begin offering ADS to the operators of its 150-plus franchised stores.

Sally Beauty is preparing to install a new POS system, which will provide a clearer picture through ADS. “Part of the problem we had before was trying to see through the static that we’ve created with the different workarounds that our associates have figured out,” Povendo says. “That created a garbled picture.

“Once we clear out some of that background noise and static, we’re better able to understand issues with the way we’re handling transactions and perhaps translate that into better service.”