Inventory shrinkage (loss of inventory due to employee theft, shoplifting, vendor fraud etc.) continues to be a serious issue for retailers – both large and small.
In fact, according to the 2019 National Security Survey, industry-wide shrinkage was estimated to be $50.6 billion. Thus highlighting the importance of having a loss prevention plan.
So, to help you establish a plan of your own, we’ve put together some tried and tested tips and strategies. Check them out below!
What is retail loss prevention?
The loss associated with shrink is two-fold; you’re losing your initial investment in the merchandise itself as well as the revenue that the product could have generated with sales. This doesn’t even include reduced customer satisfaction due to stock-outs.
Which is why store owners should consider retail loss prevention to be a priority. Loss prevention can be defined as a set of best practices that a retailer should follow to prevent product and profit loss.
In order to better understand how to prevent product loss, you must understand what causes it and how those losses occur.
As outlined above, the number one cause of inventory shrinkage is shoplifting. Shoplifting can take many forms, whether it’s an individual acting alone and stealing one or two items or it’s a serious case of organized retail crime where thousands of dollars worth of merchandise is stolen.
Whatever the case may be, it’s important to take necessary precautions so you can lessen the chances of shoplifting taking place in your retail store.
The following are some merchandising best practices that can help deter physical theft:
Merchandising best practices
a) Use effective signage: Make it clear to potential thieves that your store is being monitored. Hang signs around your store warning shoppers that they are under surveillance. Or alternatively, you can use signage to remind them of the consequences of committing theft.
b) Cameras: It’s good practice to place cameras by POS terminals, the entrance/exit to your store, and by any loading/delivery areas. To beef up your security even more, you can also consider hiring security staff.
c) Mirrors: Smaller retailers may not have the resources to install cameras in every corner of their store or have their employees constantly monitor the aisles. For theses retailers, mirrors are a cost effective option to make a significant impact when it comes to loss prevention. Placing mirrors in key areas and corners of your retail space will allow one or two employees to easily monitor the whole store. It also helps your store look more spacious.
d) Revise your store layout: Thieves are less likely to act when they are in plain sight of store employees. This is why it’s a good idea to organize your store layout so that employees have maximum visibility – avoid tall shelves and clustering product displays together. Also, consider placing valuable merchandise closer to staff or in locked displays.
e) Keep your store organized: An organized store is key to deterring theft as well as encouraging shoppers to buy. Keeping your store organized will also make it easier for staff to identify missing product. On the other hand, a disorganized store makes it easier for thieves to operate and can even play a part in attracting them.
2) Use RFID technology
A radio frequency identification system (RFID) is an advanced technology system used by larger retailers to improve inventory management and protect against shrinkage. It is particularly effective against internal theft and administrative errors as RFID tags are harder to manipulate.
RFID chips contain inventory information and are embedded in product tags or packages. This then lets store owners track product information in real-time. They are especially useful for retailers who are omnichannel as RFID provides item level visibility so you can track merchandise from distribution to sale.
While RFID technology has traditionally been too expensive for small retailers, the cost continues to fall as more and more retailers are using them. In some cases, the cost has fallen below $0.05 per tag. While this may still be too high (especially when you add the labor cost of applying tags), depending on your volume (which may allow you to request your supplier to apply them) or the value of your products, it may still be more cost-effective than any losses you would incur as a result of shoplifting.
Many POS systems give retailers the ability to create different staff accounts and set user permissions. These permissions allow store owners and managers to restrict staff members from accessing certain features in the POS system. Put simply, user permissions are ways for business owners to limit employees from performing tasks outside of their job description and to prevent internal theft.
Depending on the size of your business, you will want to be able to customize the type of rights different employees have access to. If you have a lot of staff or have turnover due to seasonality, you’ll want to look for POS systems that allow you to easily group employees by different customizable roles. In this way, you can easily set the access rights for a role (e.g. cashier) and then simply assign any employee to this role without having to manually set up the rights for each person.
4) Manage refunds and returns
Fraudulent returns (returning used, stolen, exchanged merchandise or returning merchandise with counterfeit receipts/money) happen frequently in retail. And while return fraud is harder to assess than shoplifting, a strict return policy can help prevent it from occurring in the first place.
Here are a few tips for developing a practical return and exchange policy that minimizes the risk of internal and external theft:
Require the original receipt for all returns and make sure the store’s return policy is printed clearly on all receipts. Most POS systems will allow you to customize receipts to include important important information such as store policy, contact info, and social media.
Make sure employees are strict about enforcing the store return policy. Consider placing a written version close to your checkout tills. It’s also a good idea to have employees remind shoppers of the policy at checkout.
Require customer ID to process refunds and exchanges and train staff to spot fraudulent returns.
Consider offering refunds only in the payment method used to make the purchase. While there is a processing cost to allowing refunds on credit cards, it is a lot easier for savvy users to process fake returns if it is possible for them to refund using cash. After all, it’s as simple as reprinting a receipt, processing a return and pocketing the cash themselves.
Look for a POS system that gives you the option to accept returns with a separate return screen that forces users to associate a refund to past invoices.
We hope you found this article helpful.
If you are a Toronto retailer, you can download the following whitepaper for emergency situations.
As a retailer, you’re bound to experience high and low seasons.
Periods of slower sales can happen for many reasons such as natural seasonality (e.g. Halloween supplies), the weather, or competitive promotions. Whatever the reason for your slump, it’s important to view your off-season or slow periods as a potential opportunity.
Low seasons are actually the perfect time for retailers to focus on their marketing efforts. With a little bit of creativity and planning, you can make it through your off-season with not only more new customers, but a larger base of followers to promote to. And who knows, you may even find a new revenue opportunity in the process!
Keep reading for 3 strategies that you can use to keep your retail business profitable during your slow periods.
Why an off-season marketing strategy is important
There is a common misconception that businesses should only invest in marketing during their high season. But this isn’t the case. Your slower seasons are actually the time when you need the sales lift from marketing!
In particular, an off-season marketing strategy is key to:
Building local and online awareness: Knowing is half the battle. Shoppers don’t know what they’ve never seen. Marketing during the off-season gives your retail business time to build online presence and brand awareness with target shoppers. You can educate customers on what your store has to offer and how you are better than your competition. This way, once your peak season hits, you will be top-of-mind with shoppers.
Minimizing your overall marketing costs: Ad spend decreases during the off-season as less competitors are bidding on ad space. This means that you can get more exposure at a lower cost versus advertising during your high season.
Getting ahead of your competitors: Besides getting new shoppers in your door, marketing during the off-season also gives you the opportunity to start building your own mailing lists or followers. This is particularly important as you need time to attract a following of people interested in what you offer. But by starting earlier than your competitors, you will be ahead of them by having a new list of potential shoppers that you can market directly to during your high season.
3 marketing strategies for the off-season
When we’re talking about marketing, we are specifically talking about digital marketing. While traditional marketing has its place, for most privately owned businesses, digital marketing offers the easiest way to promote your business, especially during your off-season. After all, today’s average shopper now spends more time with digital content than traditional media.
1) Gather online customer reviews
Online reviews are an important part of the consumer shopping journey. In fact, 90% of shoppers read customer reviews before visiting a business. And according to Google, 2 out of 3 shoppers say having positive reviews was an important factor in selecting a business or store to purchase from.
With so many people basing their purchasing decisions on reviews, gathering reviews should be a key marketing strategy for your business all year round. But the off-season is usually the best time to ask loyal and long term shoppers to leave a review on your Google My Business (GMB) profile, especially now that you can create a GMB shortname unique to your business. You can then use customer reviews as promotional material across all of your digital platforms including your social media and store website. By staying active online and promoting positive customer testimonials, shoppers will remember your retail business when peak season hits.
2) Consider paid marketing options
Digital marketing benefits retailers of all sizes as it is always the fastest way to cost-effectively access an incredibly targeted audience of shoppers. The advantages of digital marketing include:
Fast impact: Compared to traditional marketing, paid digital marketing will make an impact much faster. Depending on the type of campaign, you can get up and running in minutes.
Flexible and accountable: The results of digital marketing are much easier to see so you can immediately know whether a campaign is working and make changes right away. This is a major difference from traditional marketing where your investment is a one-time deal since you can’t make changes once a flyer or a radio ad is printed or produced.
Lower overall cost: A well planned out digital marketing campaign can reach a targeted audience at a much lower cost (as little as $10/day) than traditional marketing methods.
Click here to learn more about the benefits of digital marketing for retailers.
Run Google Local Inventory Ads (LIA)
Over the past several years, an increasing number of retailers have looked at running Google Local Inventory Ads (LIA) during slower periods. In Sidecar‘s 2019 Benchmark Report: Google Ads in Retail, the LIA performance of several retailers was examined. It turns out, LIA clicks grew by 16% and revenue increased 15% year-over-year.
Sephora, Canadian Tire, and Williams-Sonoma are some of the big box retailers who have seen success with Google LIA. Now for the first time ever, Local Inventory Ads are also available to independent retailers who are looking to attract local shoppers. And the best part? They are available in an automated way that doesn’t require retailers to hire new staff or keep inventory stock levels updated.
To learn how you can easily implement Google LIA together with your POS system, click here.
While Google LIA has proven to be a viable marketing strategy all year round, it is particularly effective during off-season for the following reasons:
Bids are lower: As mentioned above, there are fewer competitors buying ads during off-season – which means lower ad spend is required to gain impressions.
Marketing costs are minimized: LIA only showcases in-stock product and will automatically turn off when stock runs out, reducing your marketing costs.
Get in front of local shoppers who are actually looking to purchase your products: Google LIA displays in-stock product to shoppers within a certain Km radius (you have full control over the geographical range) who are actually searching for products that your store sells.
3) Promote your business on social media
With the rise in social media and e-commerce, shoppers are closer than ever to retail businesses. Not only do you have a way to directly showcase your products and store, you can now build up your list of followers for personalized offers.
While websites are still a great way to offer a “digital window” into your store, with the rise in social commerce (e.g. Facebook Shops, Instagram Shopping, etc.), it’s very important for retail stores to be active on social media.
Check out these 6 tips to help you grow your social following more quickly during your low season:
Pick no more than 1 or 2 social media platforms to avoid spreading yourself too thin. Just make sure you’re picking ones your target customers commonly use. See how the various social media platforms differ.
Make sure you have a verified Google My Business (GMB) account and are active on it. GMB is one of the best free online marketing tools available for small businesses today. Not only does GMB help local shoppers find you on Google Maps, it has options for you to post content (e.g. special offers or events) which improves your SEO.
Improve your content design with cost-effective graphic tools. You don’t need to be a designer to use drag-and-drop tools such as Canva that even have free versions.
Use original images for the best results as these rank better on SEO.
Don’t forget to include the links to your social media accounts on email signatures, invoices, receipts, ads and on any window displays.
Clearly display your social media links at the cash register and train your staff to encourage shoppers to sign up for special offers while they are waiting.
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Inventory SKUs (pronounced “skew”) stand for Stock Keeping Units and are used by retailers to both identify inventory and keep track of inventory movement or changes in product stock levels over time.
It is basically a unique combination of numbers and letters assigned to each product in a retail store. As a retail owner, inventory SKUs give all of your products a single type of code to help you keep track of certain details for a specific product including price, product information (colour, size, features, etc.), quantity, and manufacturer. SKUs are often associated with vendors or supplier barcodes but can they can also be converted into scannable barcodes and printed on to product labels.
A retail POS system is the software that holds all of this inventory information so that you can track what you’re buying, how much stock you’re carrying and whether stock movement matches what you’ve sold. Whenever you’re looking for a new retail POS system make sure to check if the software will allow you to use your existing SKUs and also generate consecutive SKUs for new products. This is particularly important if you integrate to other non-POS systems (e.g. accounting systems) based on your SKU names.
SKUs vs GTINs
SKUs should not be mistaken for Global Trade Item Numbers (GTINs) or Universal Product Codes (or UPCs). SKUs are internal codes used for products that are unique to a retail business. On the other hand, GTINs or UPCs are the same for a product – no matter who/what store sells it.
How Are SKUs Made?
Each retail store has a unique and specific process in place for choosing SKUs. This method is usually easy to understand and follow for retail staff.
POS systems can help you create SKU codes based on a format that works for your business. For example, your SKU code can have a specific prefix or suffix together with a number that increases consecutively. For example, a SKU for your business might be FD-2340-GR. Others use shortcodes within their SKUs as an easy hint to staff so they don’t need to memorize numbers.
How Are SKUs Used?
Inventory management: Inventory/stock-takes should be done at regular intervals in retail; both for tax purposes and to ensure accurate inventory levels.
When each product is assigned a unique SKU, inventory availability is easier to determine throughout the year. And when it comes time for a stock-take, SKUs make it easier to reconcile stock levels – so that actual inventory levels match inventory counts in your retail POS or inventory management system.
Re-Stocking Products
Making use of SKUs can help store owners identify reorder points and a minimum threshold – so when inventory hits a certain level, they are made aware that a new purchase order needs to be placed.
These internal codes also help you identify the products that move faster. Meaning you only have to re-order when you really need to – resulting in reduced inventory holding costs.
Better Customer Experience
Have you ever walked into a store and seen a pair of shoes or a t-shirt that you liked – but it turned out that you needed a different size? In this case, retail employees usually scan the item’s barcode or label to see if they have your size in stock, either in the back stockroom or at a different location.
This instance explains how SKUs are used within a retail system to improve customer experience. When products share a traceable type of code, you and your staff can more easily identify stock levels quickly so that more time is available to actually assist customers.
Easier To Identify Profitable Products
SKUs are generally the easiest way for retailers to filter for specific and detailed product reporting – e.g. identifying bestsellers and underperforming products by their SKU. When you combine this with merchandising and product categories or tags, business owners can more easily see the effectiveness of their store’s product mix or product lines.
Identify Inventory Shrinkage
Inventory shrinkage in retail can be defined as the difference that exists between the inventory quantity in a retailer’s POS system and the actual inventory in that store. In other words, it consists of the stock/product/inventory that goes missing due to human error, theft, damage, miscounting, etc.
Inventory management is key to minimizing shrinkage in retail. As stated in an inventory shrinkage article published by Forbes, “Without an active inventory process, you do not realize your losses until it is too late.”
And properly designed and implemented inventory SKUs are central to any good retail management system. They are key to modern retail operations since they are necessary to share and track inventory information between different locations, systems, and sales channels.
Did you find this article helpful? We will be posting more inventory management tips in the upcoming weeks.
For those of you who don’t know, Google My Business is a powerful tool that allows retail businesses to connect with local shoppers.
And posts on Google My Business is a promotion tool that helps optimize a store’s business listing and increase foot traffic.
Put simply, it is an easy and free way to promote your business locally.
I’ll explain more below.
What are Google My Business Posts?
Google My Business posts is a feature that allows you to share content about your store on Google Search and Maps. It is similar to any other social media platform like Twitter or Facebook.
As a store owner, you are able to share news, promotions, events, and new products with shoppers. It posts directly to your Google My Business listing – so existing and potential customers can see your content directly in search results.
What are the Benefits of Google My Business Posts?
Posts on Google give retailers the ability to communicate with shoppers so they are better informed when making purchasing decisions. Which means that local businesses are able to:
Engage shoppers with attractive content (photos, videos, GIFS etc.)
Promote any new sales, products, or events
Improve shopper experience with relevant and timely information
Communicate directly with local shoppers
How Does it Work?
For each post, business owners can include text, call-to-action buttons, and/or photos or videos to promote their store. There are four different GMB post types including:
What’s New: Share general information about your retail business. For example, you can give shoppers an inside look at your Halloween displays and merchandise.
Events: Promote any upcoming events that you are holding. Each event requires a start time, end time, and a title. It is also good practice to include a photo/video,an event description, and a call to action button leading to a landing page for your event.
Products: Store owners also have the option of promoting any products or new merchandise. For example, a pet store could promote their new range of dog food. Keep in mind that product posts require a title and photo/video.
Offers: According to Google, 50% of shoppers are looking for promotions and discounts when searching for a business online. So provide shoppers with information on the latest sales and promotional offers. Offers will appear at the top of your business listing on both Google Search and Maps.
These posts require a title, and start/end dates. It’s also good practice to include photos/videos, descriptions, coupon codes, and terms and conditions of the offer. The call-to-action button “View” will automatically appear on all Offer posts.
Some Important Things to Note
GMB posts disappear after 7 days unless you set another shorter time frame. This is why it is important to post consistent and relevant content.
It is a good idea to include GMB in your marketing strategy. Place the same importance on GMB posts as you would on other social platforms like Instagram or Twitter.
Google provides insights on your posts – including how many views each post got. It also tells you how many users clicked on a link in a post
We hope you found this article helpful!
Would you like to learn how to attract local shoppers on Google?
Good news – we are hosting a breakfast seminar exclusively for GTA store owners! We will be discussing how you can attract more local shoppers with POS technology among other important topics. To learn more about the event and to register, click here.
If you are not making use of digital marketing tools, you are missing out on a huge chunk of customers!
Shoppers are now searching for retail businesses like yours online. According to Google:
3 out of 4 customers now use a search engine to find a business.
7 out of 10 customers made a purchase from a business they found using a search engine.
This is why digital marketing strategies are essential for retailers who are looking to drive foot traffic and sales.
To learn more about the benefits of digital marketing for retail stores, click here.
Below are three strategies you can leverage to build an online presence and attract more shoppers.
3 Online Marketing Tactics that Increase Foot Traffic
1) Local Directory Listings
Local search results present a huge opportunity for retail stores; according to Google, 80% of people now use a search engine to find local information.
This is why local directory listings are so valuable to retailers as a digital marketing tool – they help optimize your retail business for local search (or local SEO). In simpler terms, they help you be found locally by making your retail store appear in search results.
Directories feature business information such as your address, contact information, store hours along with other useful features such as customer reviews, images, videos, and preferred payment options.
Not only do local directories help you appear higher up in search results – they also help your business stand out among big box stores and online retailers.
As mentioned above, most retail stores haven’t optimised for local search while online competitors can’t compete with your store locally. Meaning – there is a competitive edge you can gain by focusing on local SEO.
To learn more about the basics of SEO, click here.
The following are some online directories that will help you get noticed in local search results:
Google My Business
Yelp
Yahoo Local
Bing Places for Business
MerchantCircle
Yellow Pages
Foursquare
Manta
Angie’s List
Citysearch
2) Buy Online, Pick Up In-Store (BOPIS)
Buy Online, Pick Up In-store or BOPIS (also commonly known as click and collect) takes advantage of consumer shopping habits to drive foot traffic.
BOPIS is increasing in popularity as more and more retailers are adopting the strategy in order to remain competitive in the age of Amazon. And it is a tactic that seems to be working – according to the Business Insider, 68% of US consumers have made multiple click and collect purchases.
To summarize, BOPIS drives foot traffic while offering several advantages to retailers including:
Higher rates of impulse purchases
Decreased shipping costs
Lower return rates
Satisfied shoppers
3) Google Local Inventory Ads
Google Local Inventory Ads are one of the most important digital marketing tools that retailers can leverage to drive foot traffic. This is because LIAs give retailers the unique ability to display a store’s in-stock merchandise – at the exact moment that a relevant local search is made.
When a shopper makes a relevant product search, and that product is available at a local store, they will be shown a local inventory ad with an “in stock” label.
Once that shopper clicks on the ad, they will be taken to the Local Storefront page. Here, they will be given more information about the product and your physical store including other in-stock inventory, current promotions, store location, and hours.
So by implementing Google LIAs in your digital marketing strategy, you will be able to target local shoppers and drive relevant traffic to your store!
We hope you found this article helpful!
Would you like to learn more about how to increase your retail store’s online presence?
Good news- we are hosting a breakfast seminar exclusively for GTA store owners! We will be discussing how you can attract more local shoppers with POS technology among other important topics. To learn more about the event and to register, click here.
