Cooling down "hot stores"

"Retailers do not have to put up with the view that they are mere victims of circumstances and can do little to combat shrinkage," claimed Beck and Chapman. "On the contrary, when they adopt proactive interventions, improving people and problem management and implementing effective process control, they can reduce 'hot product shrinkage' quite dramatically."

The effectiveness of the ECR Europe Map has been put to the test by Woolworths which, in cooperation with Gillette, has implemented a solution that has led to a reduction of hot product shrinkage by 68% and increased sales of 30%.

Traditionally, severe incidences of shrinkage - causing the so-called "hot store" environment - have been attributed to socio-economic environments, where unemployment, crime and poverty are rife.

The researchers introduced the audience to the four "As" to preventing stores from becoming hot: accountability, attitude, action and audit. "These are the characteristics we have identified in stores where managers have responded to their environment and developed effective strategies to fight shrinkage," explained Chapman.

Beck and Chapman described the ECR Europe Road map, an action plan to select an appropriate solution for each specific retail environment. "The call to action starts with a plan which leads on to map[ping] and measure[ing] conditions and circumstances," continued Chapman.

"This is followed by the analysis of findings which in turn enables retailers to develop and implement solutions. Subsequent evaluation of results must then be applied to the original plan and may require the plan to be adapted and refined."