The Planet M, India’s one of the biggest Mobiles, Music, Entertainment and Lifestyle Chain and a part of the 1500 crore Videocon Retail Ltd. with more than 150 stores across 42 cities broadened its horizons and unveiled India's first Cafe in store at Planet M outlet, Banjara Hills, Hyderabad. Café eARTh, the place to relax and refresh at its Planet M - a feel good and indulgence store was formally launched late evening on Sunday by Mr. Saurav Dhoot, Director - Videocon Retail Ltd.It is based on the lines of affordability, feel good and indulgence. Planet M plans to launch 250 such cafe-in-stores in the next three years across the country.
Videocon, which acquired Planet M from media conglomerate Bennett, Coleman and Co in 2007, has so far launched 80 revamped Planet M stores. It plans to take the number of outlets to 1,500 from the present 200 in the next three years. Planet M will soon be offering company-labelled telecom products including mobile pouches, phone insurance and extended warranties. It is in talks with a few general insurance companies. Apart from retailing mobiles and IT products, the company has plans to launch laptops, mobile phones and gaming solutions under the Videocon brand, informed Mr. Dhoot.
Videocon Retail garnered revenues of Rs 800 crore from Next and Rs 100 crore from Planet M last year. With the enhanced retail presence, this year's revenue contribution from the two formats will be Rs 1,500 crore and Rs 400 crore respectively, Mr. Dhoot said.
The only Café where, art takes the centre stage Café eARTh is the platform for young budding artists to portray their talent to all. The theme of the Café is to bring art close to the people. Everyone is gifted with the sense of appreciation towards art. We hardly get the opportunity to visit galleries very often. And not every talent can be exhibited in the galleries. Hence, Café eARTh is a perfect blend for both the artist as well as the art lovers. The ambience is such that you are in the most relaxed state of mind with ample time in hand.
Café eARTh offers you the perfect combination to sooth all your five senses.The comfortable interiors, display of art, music in the café, the aroma of freshly baked pie and a tantalizing sip of hot cappuccino is something one can’t resist. The menu ranges from submarines to wraps and pizzas for vegetarians and non-vegetarians. And if you are in a mood to nibble on something there is always brownies, pies and pastries. The list to sip on is endless as well. Tea, coffee, smoothies, juices, and granitas you name it and Café Earth has it.
Hyderabad alone has a total of 8 Planet M stores. Planet M has now taken the initiative to cater to the vast mobile using masses offering a variety of swanky mobiles to choose from. alone has a total of 8 Planet M stores. Planet M has now taken the initiative to cater to the vast mobile using masses offering a variety of swanky mobiles to choose from.
The Planet M story began with a single swanky store at Times of India Building, V.T. As the demand for the Planet M way of entertainment grew, this retail store grew in numbers, dotting the skyline of the major cities and sweeping across the vibrant satellites and mini-metros too.
Wednesday, July 23, 2008
Wills Lifestyle`s rejig bears fruit
TC's garment retailing arm Wills Lifestyle, which embarked upon a major rejuvenation and brand makeover late last year, is tying up with budding designers, Italian fabric makers and established designers in a bid to have cost advantage and premium look.
The move is aimed at wooing the young upwardly mobile segment, which is expected to bring 30 per cent growth for the company.
The company has tied up with leading design institutes such as NIFT, NID and Pearl Academy for promoting budding designers to be selected through regional competitions.
Wills has also collaborated with international design studios Alessandra Macchi Studio (Italy) for superior quality flat knits and with Ricardo Rami Studio (Italy) for fashion wear for women.
The company is also planning to take leading Indian designers including Rajesh Pratap Singh, Rohit Gandhi, Rahul Khanna, Manish Malhotra, Rohit Bal among others on board to showcase their products during the Wills Lifestyle Fashion Week. Their collection will also be available at its stores.
According to a retail analyst who wished to remain anonymous, "Wills Lifestyle's plan for a makeover was essential in the face of a modern, youth-friendly retailing becoming the buzzword. Moreover, with the advent of several new retail chains in India, established brands like Wills Lifestyle had to go for innovations in order to stay ahead of competition."
The brand makeover will be reflected through new-look stores, launch of premium product lines, and tie-ups with leading architecture and management companies for superior product presentation inside stores.
The changes have resulted in 20 per cent increase in footfalls in its stores and 15-20 per cent rise in productivity.
"Women's wear contributes about 35 per cent to the chain and we see this as a big growth opportunity. We are also focusing on the men's formal wear category as part of our strategy to focus on special consumer segments," informed Atul Chand, vice-president (marketing and retail) of ITC.
The company has also roped in FRCH, an architectural, planning and interior design services firm, to get the desired new-look.
The new concept store design will enable differentiated product presentation through interplay of hangs and stacks. The company is now providing more elbow room to its customers through spacious trial rooms.
The company has also tied up with Friedman Group, the retail management expert, which would train its store managers and staff on engaging customers for a superior shopping experience.
In other tie-ups, Elemental Design, a UK-based visual merchandising communications, event management and design agency, will assist the company with an improved display and presentation inside the stores.
From 50 stores at present, the company plans to have 80 stores by the year-end.
Reference: http://www.business-standard.com/common/news_article.php?autono=329410&leftnm=5&subLeft=0&chkFlg=
Monday, July 21, 2008
Videocon for Rs 800-crore retail spread
Videocon Retail, a part of Venugopal Dhoot-promoted Videocon Industries, plans to invest Rs 800 crore to expand its electronic retail format, Next Retail, and Planet M, the mobile, music, entertainment and lifestyle chain, in the next three years, said Saurav Dhoot, director, Videocon Retail.
Videocon, which acquired the leisure format from media conglomerate Bennett, Coleman and Co in November 2007, has so far launched 80 revamped Planet M stores.
The company plans to take the number of outlets to 1,500 from 200 at present in the next three years. Simultaneously, the number of Next outlets will be increased to 650 from 400.
Dhoot said the company was witnessing 40 per cent revenues from sale of mobile phones and accessories at Planet M. It is looking at offering company-labelled telecom products, including mobile pouches, phone insurance and extended warranties. It is in talks with a few general insurance companies.
Apart from retailing mobiles and IT products, the company has plans to launch laptops, mobile phones and gaming solutions under the Videocon brand, he added while declining to divulge further details.
Meanwhile, Videocon Retail on Sunday launched the country's first cafe-in-store Cafe eARTh, a platform for young budding artists to portray their talent, at its Planet M store in Hyderabad. "Our idea is to launch 250 cafe-in-stores in the next three years," Dhoot said.
Videocon Retail garnered revenues of Rs 800 crore from Next and Rs 100 crore from Planet M last year. With the enhanced retail presence, this year's revenue contribution from the two formats will be Rs 1,500 crore and Rs 400 crore respectively, he said.
Videocon, which acquired the leisure format from media conglomerate Bennett, Coleman and Co in November 2007, has so far launched 80 revamped Planet M stores.
The company plans to take the number of outlets to 1,500 from 200 at present in the next three years. Simultaneously, the number of Next outlets will be increased to 650 from 400.
Dhoot said the company was witnessing 40 per cent revenues from sale of mobile phones and accessories at Planet M. It is looking at offering company-labelled telecom products, including mobile pouches, phone insurance and extended warranties. It is in talks with a few general insurance companies.
Apart from retailing mobiles and IT products, the company has plans to launch laptops, mobile phones and gaming solutions under the Videocon brand, he added while declining to divulge further details.
Meanwhile, Videocon Retail on Sunday launched the country's first cafe-in-store Cafe eARTh, a platform for young budding artists to portray their talent, at its Planet M store in Hyderabad. "Our idea is to launch 250 cafe-in-stores in the next three years," Dhoot said.
Videocon Retail garnered revenues of Rs 800 crore from Next and Rs 100 crore from Planet M last year. With the enhanced retail presence, this year's revenue contribution from the two formats will be Rs 1,500 crore and Rs 400 crore respectively, he said.
Saturday, July 19, 2008
Where mall glamour palls
Two years ago, India’s first designer mall, Gallops, came up in Ahmedabad, announcing that Gujaratis looking for global lifestyle brands would no longer have to travel to Singapore, Hong Kong or Dubai with their shopping lists.
But the globe-trotting Gujarati customer, who may dig into his deep pockets outside the State, is known to bargain hard within it. Today, many shops at Gallops are gasping for breath. A ‘designer mall’ is one where the outlets are specifically designed to give the customer a ‘global experience.’ For instance, an outlet of, say, ‘Lifestyle’ at Gallops has exactly the same look and dimension as its outlet in Mumbai, Frankfurt or New York so the customer would not feel out of place in any of these.
Today, few outlets in the swanky mall can boast of ‘business’; many have, in fact, closed shop due to lack of customers; others, who had booked space, have not even opened shop.
Of course, the parking lot is seen almost packed, but the car-owners are either shop-keepers themselves, window-shoppers, or those heading straightaway to the food court on the top floor of Gallops.
Elusive footfalls
Simply put, many of these outlets are yet to break even. But this trend is not restricted to Gallops alone. Many other malls, whether marketing lifestyle products or grocery, are crying for customers’ attention.
The so-called ‘footfalls’ have hardly translated into actual business in most cases. And, of course, the traditional grocery stores (kiranas) have not disappeared, as feared by many only a few months ago. If anything, they are now giving stiff competition to the big boys of retail after the public’s initial enthusiasm wore off.
A number of reasons may have contributed to customer disinterest in retail, locals say. The Gujaratis are known to generally store their supplies of basic articles — foodgrains, sugar, edible oil — for the whole year and shop for the remaining needs in their neighbourhood store.
They even shop for clothes for the entire family in the ‘sales season’ of July and August. So, grocery and clothes, which constitute major portions of a retail outlet’s billing, do not really attract the customer in Gujarat to the swanky malls unless some freebies are thrown in.
Vegetable and fruits retail stores such as Subhiksha and Reliance Fresh face another problem: Gujarat being a ‘hot’ state, vegetables and fruits have low shelf-life. Most people buy these in small quantities, daily or even twice a day, from the larri-wala .
Where corner shops score
According to realty developer Mr R. K. Patel, the ‘old world’ shopkeepers have several advantages — rents at old rates, non-air-conditioned shops, minimum manpower, no-frills environment, flexibility of business hours and meagre overhead costs, they have more staying power and can afford competition. Few retailers, including the pioneering Big Bazaar, have, therefore, managed to break even.
In a mall, on the other hand, the shopkeepers are required to shell out for electricity bills , skilled manpower andrents.
Lease rents in Ahmedabad, for instance, have increased four to five times during the last three years compared to the high street, stand-alone old shops.
Unlike Mumbai, New Delhi or Bangalore, malls in Ahmedabad, Surat and Rajkot do not attract the high net worth individuals (HNIs), such as IT professionals, simply because Gujarat is yet to emerge as an IT-major State.
Moreover, sale of branded articles is often split amongst the many shops selling the same articles in a limited area. For instance, about a dozen outlets in a radius of just 3 km sell the same brands of shoes, wristwatches or computers; this has split business and adversely affected these outlets as they all have set up shop in each of the half-a-dozen malls or hyper-markets within a 2-3 km radius.
Supply exceeds demand
There is too much supply but little demand, according to Mr R. K. Jain, a realtor. However, this has not deterred construction activity, although some of the mall developers are rethinking or recasting their plans: some have simply postponed construction, mainly due to increased costs involved now, or have changed plans to construct commercial, corporate and business complexes instead of swanky malls.
Interestingly, some of the major malls are now actually downsizing their outlets due to various reasons. Some shop-keepers at malls, according to another realty developer, have even formed ‘unions’ threatening to pull out unless their lease rent was reduced by mall managements! Some have, even after signing up, cancelled occupation
‘Unrealistic’ least rents on the new business artery of Ahmedabad, the Sarkhej-Gandhinagar Highway, have only compounded the problem: rents on this Highway have increased three-fold during the last six months, from Rs 1,400 to Rs 1,500 per sq.ft to Rs 3,400 per sq.ft. As a result, more than 10 lakh sq.ft of retail space is ready but has no occupiers in Ahmedabad.
Again, this has not deterred some of the developers: they are still busy constructing some 20 lakh sq.ft in the city this fiscal. Any takers?
Article courtesy: http://www.thehindubusinessline.com/iw/2008/07/20/stories/2008072051031700.htm
But the globe-trotting Gujarati customer, who may dig into his deep pockets outside the State, is known to bargain hard within it. Today, many shops at Gallops are gasping for breath. A ‘designer mall’ is one where the outlets are specifically designed to give the customer a ‘global experience.’ For instance, an outlet of, say, ‘Lifestyle’ at Gallops has exactly the same look and dimension as its outlet in Mumbai, Frankfurt or New York so the customer would not feel out of place in any of these.
Today, few outlets in the swanky mall can boast of ‘business’; many have, in fact, closed shop due to lack of customers; others, who had booked space, have not even opened shop.
Of course, the parking lot is seen almost packed, but the car-owners are either shop-keepers themselves, window-shoppers, or those heading straightaway to the food court on the top floor of Gallops.
Elusive footfalls
Simply put, many of these outlets are yet to break even. But this trend is not restricted to Gallops alone. Many other malls, whether marketing lifestyle products or grocery, are crying for customers’ attention.
The so-called ‘footfalls’ have hardly translated into actual business in most cases. And, of course, the traditional grocery stores (kiranas) have not disappeared, as feared by many only a few months ago. If anything, they are now giving stiff competition to the big boys of retail after the public’s initial enthusiasm wore off.
A number of reasons may have contributed to customer disinterest in retail, locals say. The Gujaratis are known to generally store their supplies of basic articles — foodgrains, sugar, edible oil — for the whole year and shop for the remaining needs in their neighbourhood store.
They even shop for clothes for the entire family in the ‘sales season’ of July and August. So, grocery and clothes, which constitute major portions of a retail outlet’s billing, do not really attract the customer in Gujarat to the swanky malls unless some freebies are thrown in.
Vegetable and fruits retail stores such as Subhiksha and Reliance Fresh face another problem: Gujarat being a ‘hot’ state, vegetables and fruits have low shelf-life. Most people buy these in small quantities, daily or even twice a day, from the larri-wala .
Where corner shops score
According to realty developer Mr R. K. Patel, the ‘old world’ shopkeepers have several advantages — rents at old rates, non-air-conditioned shops, minimum manpower, no-frills environment, flexibility of business hours and meagre overhead costs, they have more staying power and can afford competition. Few retailers, including the pioneering Big Bazaar, have, therefore, managed to break even.
In a mall, on the other hand, the shopkeepers are required to shell out for electricity bills , skilled manpower andrents.
Lease rents in Ahmedabad, for instance, have increased four to five times during the last three years compared to the high street, stand-alone old shops.
Unlike Mumbai, New Delhi or Bangalore, malls in Ahmedabad, Surat and Rajkot do not attract the high net worth individuals (HNIs), such as IT professionals, simply because Gujarat is yet to emerge as an IT-major State.
Moreover, sale of branded articles is often split amongst the many shops selling the same articles in a limited area. For instance, about a dozen outlets in a radius of just 3 km sell the same brands of shoes, wristwatches or computers; this has split business and adversely affected these outlets as they all have set up shop in each of the half-a-dozen malls or hyper-markets within a 2-3 km radius.
Supply exceeds demand
There is too much supply but little demand, according to Mr R. K. Jain, a realtor. However, this has not deterred construction activity, although some of the mall developers are rethinking or recasting their plans: some have simply postponed construction, mainly due to increased costs involved now, or have changed plans to construct commercial, corporate and business complexes instead of swanky malls.
Interestingly, some of the major malls are now actually downsizing their outlets due to various reasons. Some shop-keepers at malls, according to another realty developer, have even formed ‘unions’ threatening to pull out unless their lease rent was reduced by mall managements! Some have, even after signing up, cancelled occupation
‘Unrealistic’ least rents on the new business artery of Ahmedabad, the Sarkhej-Gandhinagar Highway, have only compounded the problem: rents on this Highway have increased three-fold during the last six months, from Rs 1,400 to Rs 1,500 per sq.ft to Rs 3,400 per sq.ft. As a result, more than 10 lakh sq.ft of retail space is ready but has no occupiers in Ahmedabad.
Again, this has not deterred some of the developers: they are still busy constructing some 20 lakh sq.ft in the city this fiscal. Any takers?
Article courtesy: http://www.thehindubusinessline.com/iw/2008/07/20/stories/2008072051031700.htm
Indian Retail to Comprise 25% of Retail Revenue by 2011
As per Deloitte Haskins and Sells, the Indian organized retail market is rapidly growing and is expected to account for 25% of the total retail revenue by 2011.
A study by the accounting company Deloitte Haskins and Sells has found that the organized retailing in India is growing faster than anticipated. As forecasted in the study, the organized retailing could represent one-fourth of the total retail revenue by 2011 from its present 8% share, as reported by Livemint.
Presently, both organized and unorganized retail sectors in India are valued at $295 Billion (Rs 12.3 Trillion). The growth in the Indian organized retail market is primarily due to change in customers’ behavior owing to rise in income, changing lifestyles and demographic patterns – the most essential factors for the growth of the retail industry of any nation.
Moreover, the retailing framework is also growing at a rapid pace. Shopping malls are gaining popularity in India with new projects for shopping malls are being announced. Indian supermarkets have also captured a large chunk of the Indian food and grocery market. Customers also prefer to shop at a place where they get food, recreation and shopping facility under one roof that has boosted the Indian organized retail market.
Also, rising customer spending capacity and availability of credit is promoting organized retail market in India. By 2011, the growth in the Indian organized retail market is projected to grow strongly due to growing income, which will be further supported by the favorable demographic patterns. The success of organized retailers in India is largely due to reaching prospective customers at the lower end of the income graph.
However, as the retail market in India is growing, the distribution is also getting better, but it still continues to be a disorganized area. Poor standard infrastructure, together with weak distribution sector, cause high logistics costs, which is very high in terms of proportion of GDP.
According to a Research Analyst at RNCOS, “The biggest challenge in the Indian consumer market is distribution and marketing cost. Decline in distribution and marketing prices could allow retail sales to grow as anticipated. The Indian retail firms and retailers can apply innovative methods to cut down this cost, such as upgrading the existing infrastructure and introducing new methods like public relation to sustain growth in organized retail sector of India
This article was first seen on: http://www.rncos.com/Blog/2008/06/Indian-Retail-to-Comprise-25-of-Retail-Revenue-by-2011.html
A study by the accounting company Deloitte Haskins and Sells has found that the organized retailing in India is growing faster than anticipated. As forecasted in the study, the organized retailing could represent one-fourth of the total retail revenue by 2011 from its present 8% share, as reported by Livemint.
Presently, both organized and unorganized retail sectors in India are valued at $295 Billion (Rs 12.3 Trillion). The growth in the Indian organized retail market is primarily due to change in customers’ behavior owing to rise in income, changing lifestyles and demographic patterns – the most essential factors for the growth of the retail industry of any nation.
Moreover, the retailing framework is also growing at a rapid pace. Shopping malls are gaining popularity in India with new projects for shopping malls are being announced. Indian supermarkets have also captured a large chunk of the Indian food and grocery market. Customers also prefer to shop at a place where they get food, recreation and shopping facility under one roof that has boosted the Indian organized retail market.
Also, rising customer spending capacity and availability of credit is promoting organized retail market in India. By 2011, the growth in the Indian organized retail market is projected to grow strongly due to growing income, which will be further supported by the favorable demographic patterns. The success of organized retailers in India is largely due to reaching prospective customers at the lower end of the income graph.
However, as the retail market in India is growing, the distribution is also getting better, but it still continues to be a disorganized area. Poor standard infrastructure, together with weak distribution sector, cause high logistics costs, which is very high in terms of proportion of GDP.
According to a Research Analyst at RNCOS, “The biggest challenge in the Indian consumer market is distribution and marketing cost. Decline in distribution and marketing prices could allow retail sales to grow as anticipated. The Indian retail firms and retailers can apply innovative methods to cut down this cost, such as upgrading the existing infrastructure and introducing new methods like public relation to sustain growth in organized retail sector of India
This article was first seen on: http://www.rncos.com/Blog/2008/06/Indian-Retail-to-Comprise-25-of-Retail-Revenue-by-2011.html
Mobile phone retailing gets on speed dial
Competition has started hotting up in the mobile phone retailing market. Hot Spot Distribution India, a leading mobile phone and lifestyle multimedia retailer and distributor under the brand name Hot Spot, is bullish on the Indian mobile phone retail market. The company, which has set up 200 mobile retail stores in just seven months in India, is now planning to set up 1,500 stores within the next 18 months.
According to Sanjeev Mahajan, CEO, Hot Spot, “India currently sells 5 billion pieces of mobile phones every month. Indian mobile phone retailers follow the best practices in terms of Customer relationship Management (CRM), function on a negative working capital and are part of the community. Hence, global players should look to India in order to learn best practices of mobile retailing. It’s not the retail space but the people active in the retailing business that will spur the market growth.”
In a recent internal study conducted by Nokia, the base of mobile phone retailers in India is expected to grow from 3 lakh to 10 lakh by 2010. During the same period, mobile phone retailing market in India is expected to contribute 70% to the overall retail sector.
Mahajan further added, “Currently, we are growing at the rate of 40%. Our cluster approach in Delhi has been a leading factor in spurring more volumes.”
Similarly, Essar Telecom Retail plans to set up over 2500 stores in the next 3 years across 600 cities, thus covering virtually every major town in every state across India. Over seventy stores have already been launched and are serving customers across Mumbai, Delhi, Kolkata, Hyderabad, Chennai, Bangalore, Pune, Chandigarh and Ahmedabad.
Another 100 stores are scheduled to come within the next 6-8 weeks. The chain would be almost 600 stores strong, spanning the top 100 cities and towns, within the next 6 months.
Friday, July 18, 2008
Speciality mobile stores set to multiply
If you are a consumer, nothing succeeds like excess. With an explosive boom in mobile phones, companies in the industry are setting up or expanding their own specialist retail chains involving thousands of planned new stories that would make it easier or cheaper for you to shop for handsets, accessories or recharge services.
And most certainly, you will also have a great deal of variety from which to choose - right in your neighbourhood - besides the promise of efficient service.
Leading mobile labels are aiming to catch and grow more consumers in a market that already has 250 million subscribers, and the new stores would obviously be a notch or two above local stores where a handset or coupon is loosely sold like an electronic good.
“The overall mobile retail market in India is estimated between Rs 70,000 and Rs 75,000 crore,” Pankaj Mohindroo, National President of the Indian Cellular Association, told Hindustan Times.
Spice group-owned chain Hot Spot offers mobile phones and accessories across its 310 company owned stores in 29 cities across India. The company has plans to increase the number of stores three-fold to about 1,000 stores by the year-end. It also plans to increase the number of its service centres from 75 to 500 by the end of 2008.
“The USP (unique selling proposition) of Hot Spot over other retail chains is the availability of products and services,” said Sanjeev Mahajan, CEO, Hot Spot Retail. The chain offers an additional one-year warranty on handsets it sells and buyers can go in for a service coverage pack that entitles them for repair even if the handset gets water logged.
Mahajan said that the retail chain is looking at setting up 85 franchisee-owned collection points where users can deposit their faulty handsets for repair. The company also plans to introduce its own private label of accessories.
RPG Cellucom, the mobile retail arm of RPG Enterprises, has a presence across 16 cities through 165 outlets. The company has plans to invest about Rs 400 to Rs 500 crore in the current financial year to have a total of 500 stores. The retail chain goes beyond cellphones. “We sell products such as personal digital assistants, laptops, accessories and even recharge coupons that enhance mobility,” said Biswajeet, Head of Marketing, RPG Cellucom. The chain is also considering opening its own service centres and is in talks with companies like Nokia for partnerships.
Subhiksha Mobile, a unit of the supermarket chain of the same name, present across 100 cities, offers the lowest prices on all mobile handsets. "We also offer the customer the added advantage of having a Subhiksha Mobile store within a one km radius anywhere in the city,” said Mohit Khattar, President, Subhiksha Trading.
MobileNxt, which offers guaranteed exchange of handsets, plans to invest about Rs 100 crore over the next two years to increase the number of stores to 500 from the existing 52, said Vijay Menon, CEO of the retail chain. The company also gives out a low-end cellphone as a temporary substitute to a user who may have deposited his device for servicing.
Hot Spot appoints OMS as media agency
OMS (Optimum Media Solutions), the specialist media independent division of Mudra Group, has been appointed the media agency for telecom retailing chain � Hot Spot. The scope of work includes media planning, buying and implementation and the size of the account is estimated to be about Rs 18 crores.
Sanjeev Mahajan, CEO, Hot Spot, said, "Hot Spot retail currently has approx 300 stores across the country which we intend to take up to 1500 stores by year-end. Given our aggressive expansion and growth plans, we felt the need to partner with an agency which shared our passion and brought value to the table when it came to innovative thinking and a strategic direction."
Sanjeev Mahajan adds, "The Indian consumer needs a better shopping experience in mobile retailing. A mobile phone is something that everybody wants to own today, and while working on this concept, we want the customers to have a wide range of choices before him through our retail stores. We are targeting specific communities as we want to be in every major town and every major market, the idea is to give the consumer a shopping experience in his own area."
Bipin Narang, Vice-president, Marketing, Hot Spot, said, "The marketing plans right now are largely focused on the expansion plans. The consumer today will not walk a long distance to buy the airtime solutions or a handset. The idea behind the expansion is to open a store near the consumer, while offering not just the mobile handset, but all kinds of accessories, including data cards, Bluetooth accessories, airtime solutions and products connected with the mobility arena like MP3, X-Boxes, laptops or anything that enhances the mobility of the person."
Chandradeep Mitra, President, OMS, said "It feels wonderful when clients see media agencies as partners, rather than vendors. Hot Spot has aggressive expansion plans and it will be our endeavor to derive maximum bang for the buck in reaching audiences in newer markets."
Added Niti Kumar, Business director and Head of Delhi branch, "Mass media will play a critical role in Hot Spot's marketing plans, and we're currently in the process of devising unique solutions to tap the diverse markets that the brand is entering."
Sanjeev Mahajan, CEO, Hot Spot, said, "Hot Spot retail currently has approx 300 stores across the country which we intend to take up to 1500 stores by year-end. Given our aggressive expansion and growth plans, we felt the need to partner with an agency which shared our passion and brought value to the table when it came to innovative thinking and a strategic direction."
Sanjeev Mahajan adds, "The Indian consumer needs a better shopping experience in mobile retailing. A mobile phone is something that everybody wants to own today, and while working on this concept, we want the customers to have a wide range of choices before him through our retail stores. We are targeting specific communities as we want to be in every major town and every major market, the idea is to give the consumer a shopping experience in his own area."
Bipin Narang, Vice-president, Marketing, Hot Spot, said, "The marketing plans right now are largely focused on the expansion plans. The consumer today will not walk a long distance to buy the airtime solutions or a handset. The idea behind the expansion is to open a store near the consumer, while offering not just the mobile handset, but all kinds of accessories, including data cards, Bluetooth accessories, airtime solutions and products connected with the mobility arena like MP3, X-Boxes, laptops or anything that enhances the mobility of the person."
Chandradeep Mitra, President, OMS, said "It feels wonderful when clients see media agencies as partners, rather than vendors. Hot Spot has aggressive expansion plans and it will be our endeavor to derive maximum bang for the buck in reaching audiences in newer markets."
Added Niti Kumar, Business director and Head of Delhi branch, "Mass media will play a critical role in Hot Spot's marketing plans, and we're currently in the process of devising unique solutions to tap the diverse markets that the brand is entering."
Retail Next 2008 brought to you by ETP International
ETP International a software company providing retail management systems held Retail Next – Knowledge Exchange and Trends Seminar 2008 in the capital today at Sheraton New Delhi Hotel. The conference drew more than 80 retailers within New Delhi for the half day session.Speakers presenting at the conference included Mr. Raj Jagasia, Executive Director, ETP International PvtLtd, Mr. Sanjeev Mohanty, MD, United Colours of Benetton, Mr. Prabir Sengupta, VP, Finance and IT, for the Lifestyle Retailing Business Division (LRBD), ITC Limited, Mr. Tan Hai Hsin MD, Retail GroupMalaysia and Henry Butcher Retail, Mr. Sanjeev Mahajan, CEO, Hot Spot.
Speaking on Retail Next 2008, Mr. Naresh Ahuja, Chairman and Managing Director of ETP International Pvt Ltd. said “As a Retail Management Systems partner to retailers across Asia Pacific and the Middle East, ETP meets members of the retail industry everyday. We have witnessed the transition of retail from traditional to modern. So for some time Retailers have focused on modernization and efficiency. And now the focus is on innovation and customer intimacy. We have seen that innovative processes, innovative formats, innovative services, innovative design and innovative products are driving sales. This is regardless of geography. We found that retailers like to meet each other and understand these key factors of success and that gave us the idea to bring in leading retailers and from the region to meet and exchange ideas and experiences with their peers”.
Mr. Rajkumar Jagasia, ED, ETP International said, “As a part of ETP’ commitment to the Indian retail fraternity, we offer this knowledge platform which focuses on rapidly changing trends in the industry. We have made this, a by-invitation only event, free to retailers. Feedback and response from the audience for past Retail NEXT held in Thailand, Malaysia, Indonesia and UAE were extremely positive. This has given us theencouragement to bring Retail NEXT to India now”.
Mr. Tan Hai Hsin, MD, Retail Group Malaysia and Henry Butcher retail gave a broad outlook on the retail market size in South East Asian cities. He emphasized on the fact that retail development trends and the shopping behaviour pattern affect the overall retail scenario. He also stated that as the infrastructure in South East Asian cities evolve, the opportunities are abundant for Indian retailers to move into new market. Mr. Sanjeev Mahajan, CEO, Hot Spot spoke about the mobile retailing market in India. He shared his thoughts about the key success factors for a mobile retail chain in a volatile market.
Following Mr. Mahajan was Mr. Prabir Sengupta, VP, Finance and IT, Lifestyle Retailing Business Division, ITC who presented his case study on Maximising Customers Engagement in the Consumer Centric Retail Age. He put forward his point of view on understanding consumer behaviour in a complex retail environment, creating a strong brand experience for consumers and the ways to sustain and grow the customer attention.
The last speaker of the session Mr. Sanjeev Mohanty, MD, United Colours of Benetton captivated the audience’s attention by explaining the utmost importance of visual merchandising and retail interior designing ETP International Pvt Ltd. ETP House, 124 Saki Vihar Road, Andheri (E), Mumbai - 400 072, India. Tel: +91 22 6678 2222 Fax: +91 22 6678 2233 www.etpgroup.com hereby portraying the Benetton experience. He highlighted on the point how visual merchandising helps build a brand image and adding brand value.
A networking luncheon was organised after the half-day conference in which delegates had the opportunity to mingle and speak in private with the speakers.
For further information please contact:
Good Relations India
Pankaj Upadhyay / Komal Arora
Tel: +09871511011 / 9818776033
Email: pankaj@gri.co.in / komal@gri.co.in
Speaking on Retail Next 2008, Mr. Naresh Ahuja, Chairman and Managing Director of ETP International Pvt Ltd. said “As a Retail Management Systems partner to retailers across Asia Pacific and the Middle East, ETP meets members of the retail industry everyday. We have witnessed the transition of retail from traditional to modern. So for some time Retailers have focused on modernization and efficiency. And now the focus is on innovation and customer intimacy. We have seen that innovative processes, innovative formats, innovative services, innovative design and innovative products are driving sales. This is regardless of geography. We found that retailers like to meet each other and understand these key factors of success and that gave us the idea to bring in leading retailers and from the region to meet and exchange ideas and experiences with their peers”.
Mr. Rajkumar Jagasia, ED, ETP International said, “As a part of ETP’ commitment to the Indian retail fraternity, we offer this knowledge platform which focuses on rapidly changing trends in the industry. We have made this, a by-invitation only event, free to retailers. Feedback and response from the audience for past Retail NEXT held in Thailand, Malaysia, Indonesia and UAE were extremely positive. This has given us theencouragement to bring Retail NEXT to India now”.
Mr. Tan Hai Hsin, MD, Retail Group Malaysia and Henry Butcher retail gave a broad outlook on the retail market size in South East Asian cities. He emphasized on the fact that retail development trends and the shopping behaviour pattern affect the overall retail scenario. He also stated that as the infrastructure in South East Asian cities evolve, the opportunities are abundant for Indian retailers to move into new market. Mr. Sanjeev Mahajan, CEO, Hot Spot spoke about the mobile retailing market in India. He shared his thoughts about the key success factors for a mobile retail chain in a volatile market.
Following Mr. Mahajan was Mr. Prabir Sengupta, VP, Finance and IT, Lifestyle Retailing Business Division, ITC who presented his case study on Maximising Customers Engagement in the Consumer Centric Retail Age. He put forward his point of view on understanding consumer behaviour in a complex retail environment, creating a strong brand experience for consumers and the ways to sustain and grow the customer attention.
The last speaker of the session Mr. Sanjeev Mohanty, MD, United Colours of Benetton captivated the audience’s attention by explaining the utmost importance of visual merchandising and retail interior designing ETP International Pvt Ltd. ETP House, 124 Saki Vihar Road, Andheri (E), Mumbai - 400 072, India. Tel: +91 22 6678 2222 Fax: +91 22 6678 2233 www.etpgroup.com hereby portraying the Benetton experience. He highlighted on the point how visual merchandising helps build a brand image and adding brand value.
A networking luncheon was organised after the half-day conference in which delegates had the opportunity to mingle and speak in private with the speakers.
For further information please contact:
Good Relations India
Pankaj Upadhyay / Komal Arora
Tel: +09871511011 / 9818776033
Email: pankaj@gri.co.in / komal@gri.co.in
Branded chains swamp mobile retail market
It's not difficult to see what's keeping Sanjeev Mahajan, CEO, Hotspot, the mobile retail chain of Spice Corp, on his toes. In the face of stiff competition from rival retail chain brands -- Mobile Store, Subhiksha Mobile and M Bazar, to name a few -- in the telecom products segment, he's turning aggressive to secure a leadership position for Hotspot.
So the over two-year-old chain is targeting 1,000 mobile phone and accessories' outlets under the Hotspot brand name by the end of the year. "We are opening an outlet a day and we already have 325 Hotspots in important cities," says Mahajan.
Interestingly, though, Mahajan is not the only one thinking big. Subhiksha Trading Services' Managing Director R Subramanian also intends to double his Subhiksha Mobile stores � both in the standalone format and the shop-in-shops -- from the current 740 outlets.
"In the last one year, Subhiksha Mobile has grown much larger than the others (read rivals) not only in terms of the number of stores but also in terms of volumes as well, to become the largest telecom products retailer," claims Subramanian.
Clearly, the mobile handset market is buzzing with new branded retail chains such as Reliance [Get Quote] and Aditya Birla Group entering the fray and the existing chains expanding their foorprint.
Take Pantaloon [Get Quote] Retail's JV with Axiom of Dubai, for instance. The company is re-branding its standalone retail chain Mport to Axiom stores, which is among the largest telecom products chain in
The mass market products will continue to be sold under M Bazar, its shop-in-shops at the Big Bazar outlets, while the lifestyle products will find their way into Axiom. By the end of the year, M Bazar will grow from 100 to 428 outlets, while the company will open 35 Axiom stores by then.
The lure of the telecom products market is easy to explain.
Put together, the size of the handsets market is about Rs 70,000 crore (Rs 700 billion) a year. Commenting on why Pantaloon entered telecom retail, its spokesperson says: "It is a bulk volume business. The margins are made on total volumes sold."
Needless to say, the opportunity is enormous. The industry has been dominated by the unorganised players -- nearly 500,000 mom and pop stores sell phones, recharge cards and accessories.
What's the USP of the branded chains that are rolling out nationally, compared to the neighbourhood shopkeeper stocking mobiles?
"Their inventory is limited while we will stock phones priced between Rs 1,000 and Rs 50, 000," points out Mahajan of Hotspot. Besides, the branded chains promise high-quality service as they enter full-scale servicing tie-ups with different phone brands.
Hotspot hopes to beat competition by offering hi-end cameras, iPods and laptops at its 450 sq feet to 600 sq feet showrooms. This is in addition to mobile phones, memory cards, pouches and other accessories that it already stocks.
On the cards are other VAS (value-added service) products. While music videos were introduced two months ago, a full-length feature film on a chip will be the next big thing at Hotspot. "You could watch this film on your mobile screen. And the USP is that we are offering legal content," says Mahajan.
Subhiksha, meanwhile, is offering "only the lowest and best value on all handsets" at its stores. Subramanian says that the share of sale of VAS products and personal electronics in its portfolio is low "but over the next three to six months we hope to make significant progress in this direction".
Will the mom and pop stores selling phones shut shop as branded chains grow? "No. Have the 'kirana' shops closed down because of branded food chains?" asks the Pantaloon executive. "Besides many of them will become franchisee of the bigger brands," adds Mahajan.
Organised retail, which started off with a market share of less than 1 per cent two years ago, now enjoys 15 per cent share. This will swell to 40 per cent in another two to three years. Of course, once FDI in retail is cleared by the government, Sanjeev Mahajan's job could only get tougher with expert international retailers such as Crazy Jones and Eurosat setting their foot in
Thursday, July 17, 2008
High spenders darling of luxury retail biggies
Indian consumers are demanding and getting service extraordinaire from premium brands flocking the high streets. Indulgence, it seems, is the key to the consumers’ wallet. In-shop cafes, lounge areas, kids’ play area, personal stylist, manicures and spas are the new freebies that high retail spenders might expect at Indian outlets of Esprit, UCB, Samsaara, Tommy Hilfiger, Ritu Kumar, Estee Lauder, et al.
Some international brands are providing ‘frills’ to the well-travelled Indian consumer—an incentive to buy the brand at home. For example, Espirit
Others like Estee Lauder will provide ‘frills’ because of their different (luxury) brand positioning in
In-store cafes and lounges are also a new trend with both international and high-end Indian brands. Most brands right from Tommy Hilfiger, Esprit, Satya Paul to lifestyle retailer Shoppers Stop and table-ware brand Magpie have either introduced or are experimenting with this concept. “Women like to chat and hangout while shopping. Hence, we will have a lounge area in our new outlet of Samsaara at Bandra (Mumbai),” says Genesis Colors CEO Nalini Gupta.
Esprit
“Indian shoppers still aspire for the bling of a big brand, but it’s extended courtesies on the side that keep them coming back for more,” says CEO of an international label retailing in India.
Brands have also started offering complimentary product maintenance and styling help to select customers. United Colours of Benetton offers free dry cleaning for suits bought at its men formal wear brand Uomo. Wills Lifestyle and Estee Lauder plan to offer personal stylist and makeover help to the high-end regular customers.
Luxury watch boutique chain Ethos offers free home delivery of watches. Connected services like strap size adjustment is on the house “regardless of whether the watch is bought from us or not”, says Ethos GM Rakesh Mohunta.
Neeraj Arya
Article courtesy: http://economictimes.indiatimes.com/articleshow/3182291.cms
20 corporate stores slapped with assessment notice
The Kharar Market Committee issued assessment notices to 20 corporate stores in Mohali and Kharar today for either not paying market fees for rice amounting to several lakhs or seeking exemption from it. Spencers, Reliance Fresh, Reliance Retail, Aditya Birla group and Subhiksha were among the stores who were slapped with the notices.
The Kharar Market Committee secretary Gurmohan Singh said: “The corporates have been asked to furnish all records pertaining to the sale and purchase of rice. After its scrutiny, the assessment of total market fees, payable by them, will be done.
While a few firms pleaded ignorance about having to deposit market fees for their transactions relating to rice, others such as Spencers informed the committee that they had purchased rice worth Rs 8 lakh from the date of their opening till May 2008.
Six Ten of REI Agro Ltd, maintained that they procure their stocks in bulk and it is not possible for them to pay market fees at all the committees where they have their stores. Davinder Bhandari of Reliance Retail claimed they are reporting to the market committee on a weekly basis and they have been paying market fees for the fruits and vegetables procured by them.
A few firms operating in Zirakpur (under the Dera Bassi market committee) had been paying market fees for their rice stocks entering the area. “Whenever any of these firms have any sale or purchase transaction related to agricultural produce, they deposit the market fee or file the KI form,” said Jasbir Kaur, Dera Bassi market committee secretary.
The Kharar committee, however, said that corporates have not filed
the mandatory M-Return (sale-purchase return) and they, being the controlling authority, have quasi-judicial powers to direct these corporates to produce all records pertaining to their transactions.
The Kharar Market Committee secretary Gurmohan Singh said: “The corporates have been asked to furnish all records pertaining to the sale and purchase of rice. After its scrutiny, the assessment of total market fees, payable by them, will be done.
While a few firms pleaded ignorance about having to deposit market fees for their transactions relating to rice, others such as Spencers informed the committee that they had purchased rice worth Rs 8 lakh from the date of their opening till May 2008.
Six Ten of REI Agro Ltd, maintained that they procure their stocks in bulk and it is not possible for them to pay market fees at all the committees where they have their stores. Davinder Bhandari of Reliance Retail claimed they are reporting to the market committee on a weekly basis and they have been paying market fees for the fruits and vegetables procured by them.
A few firms operating in Zirakpur (under the Dera Bassi market committee) had been paying market fees for their rice stocks entering the area. “Whenever any of these firms have any sale or purchase transaction related to agricultural produce, they deposit the market fee or file the KI form,” said Jasbir Kaur, Dera Bassi market committee secretary.
The Kharar committee, however, said that corporates have not filed
the mandatory M-Return (sale-purchase return) and they, being the controlling authority, have quasi-judicial powers to direct these corporates to produce all records pertaining to their transactions.
Retailers bet big on private labels
Established as well as wannabe retailers have hit upon a new idea in these days of cut-throat competition, high showroom rentals and rising overheads: Private labels. Apparel, fast-moving consumer goods and healthcare retailers are all moving to their own brands to ease the squeeze on their profit margins.
Till not so long ago, only a handful of retailers like Shopper's Stop had their own labels. Now, private labels have become core to every retailer's strategy.
The list of retailers (see chart) who have either introduced private labels recently or plan to do so in the near future includes all the top names of the business like Future Brands, Reliance Retail, Spencer's, Subhiksha and Dabur India.
The reason for the rush is not far to seek. According to industry experts, private label margins range from 30-40 per cent in the FMCG space to 40-60 per cent in apparels and 15-20 per cent in electronic goods. In most cases, these margins are 5-10 per cent better than the mass market brands these retailers sell.
"To support the current real estate prices, you need overall profit margins in the range of 30 per cent," Dabur India CEO Sunil Duggal said, adding: "The answer to this is private labels which give you margins in the range of 40-50 per cent which when blended with regular products give you margins that are around 30 per cent."
Show room rentals typically account for 35-50 per cent of the non-material cost for retailers. Space in new malls is more expensive because of the rise in steel and cement prices.
Profit margins in private labels, experts said, are higher because these are in-house products and retailers are able to cut out the intermediaries and overheads. This makes them a cost-effective proposition. As of now share of private labels occupy 10-12 per cent of the product mix on average but the retailers see this number growing significantly.
"Private labels may reduce the pressure of the large overhead the retailer might have to pay to the real estate developer and may in that sense help deal with the high real estate costs," said Future Brands CEO Santosh Desai. Future Brands too is keen on introducing a wider range of private labels ignored to provide a value option to the consumer.
Still others said private label is a good way to address the value-conscious customers. " Private labels is more about providing relevant and quality products to the value conscious consumer and given the economic conditions it becomes a way deal with inflation," said RPG Group Vice-chairman Sanjiv Goenka.
The current high inflation scenario seems to be the high point for private labels as more and more consumers are willing to try these new brands. Retailers also taking to private labels to fill in the gaps in across price points and categories and in turn providing a wider choice to the consumer.
"Since most of our sourcing is mostly the same as that of branded goods, the consumer gets the same quality at a better value," explains Goenka.
For Future Brands it is also about building their private labels at par with any other national brand and hence increase the rate of conversion for consumers from other brands to its own private labels. " We are as of now trying to build brands and make the consumer aware of them. We hope that in future our stores will only have our own brands," adds Desai.
Article courtesy: http://www.business-standard.com/common/news_article.php?leftnm=1&subLeft=1&chklogin=N&autono=328800&tab=r
Till not so long ago, only a handful of retailers like Shopper's Stop had their own labels. Now, private labels have become core to every retailer's strategy.
The list of retailers (see chart) who have either introduced private labels recently or plan to do so in the near future includes all the top names of the business like Future Brands, Reliance Retail, Spencer's, Subhiksha and Dabur India.
The reason for the rush is not far to seek. According to industry experts, private label margins range from 30-40 per cent in the FMCG space to 40-60 per cent in apparels and 15-20 per cent in electronic goods. In most cases, these margins are 5-10 per cent better than the mass market brands these retailers sell.
"To support the current real estate prices, you need overall profit margins in the range of 30 per cent," Dabur India CEO Sunil Duggal said, adding: "The answer to this is private labels which give you margins in the range of 40-50 per cent which when blended with regular products give you margins that are around 30 per cent."
Show room rentals typically account for 35-50 per cent of the non-material cost for retailers. Space in new malls is more expensive because of the rise in steel and cement prices.
Profit margins in private labels, experts said, are higher because these are in-house products and retailers are able to cut out the intermediaries and overheads. This makes them a cost-effective proposition. As of now share of private labels occupy 10-12 per cent of the product mix on average but the retailers see this number growing significantly.
"Private labels may reduce the pressure of the large overhead the retailer might have to pay to the real estate developer and may in that sense help deal with the high real estate costs," said Future Brands CEO Santosh Desai. Future Brands too is keen on introducing a wider range of private labels ignored to provide a value option to the consumer.
Still others said private label is a good way to address the value-conscious customers. " Private labels is more about providing relevant and quality products to the value conscious consumer and given the economic conditions it becomes a way deal with inflation," said RPG Group Vice-chairman Sanjiv Goenka.
The current high inflation scenario seems to be the high point for private labels as more and more consumers are willing to try these new brands. Retailers also taking to private labels to fill in the gaps in across price points and categories and in turn providing a wider choice to the consumer.
"Since most of our sourcing is mostly the same as that of branded goods, the consumer gets the same quality at a better value," explains Goenka.
For Future Brands it is also about building their private labels at par with any other national brand and hence increase the rate of conversion for consumers from other brands to its own private labels. " We are as of now trying to build brands and make the consumer aware of them. We hope that in future our stores will only have our own brands," adds Desai.
Article courtesy: http://www.business-standard.com/common/news_article.php?leftnm=1&subLeft=1&chklogin=N&autono=328800&tab=r
Retail sector counts the cost of employee misunderstanding
The UK retail sector is losing over £930 million every year because their employees do not understand their jobs, according to employee assessment company Cognisco
The cost was based on the findings of a new IDC white paper commissioned by Congisco - $37 billion: Counting the Cost of Employee Misunderstanding - which revealed the scale and impact of employee misunderstanding for the first time. Employee misunderstanding is defined as actions taken by employees who have misunderstood or misinterpreted (or were misinformed about or lack confidence in their understanding) of company policies, business processes, job function or a combination of the three.
The research shows that whilst organisations are often aware of the costs of misunderstanding, only one in three claim to have taken any action to close the gap. By ignoring the issue, retail companies put themselves at risk for compliance, public safety and legal problems.
“An organisation's greatest asset is its' employees”, said Mary Clarke, CEO Cognisco. “If an employee misunderstands or misinterprets actions there will be repercussions from security breaches to brand reputation. For example, one retail company told us that employee misunderstanding resulted in them interpreting market research inaccurately and imported goods attracted a higher rate of duty than anticipated. This hampered their ability to resell as they were uncompetitive when compared to local manufacturers.”
Approximately two thirds of the total cost of misunderstanding reported by organisations was attributed to loss of business due to unplanned downtime (32 per cent), poor procurement practice (17 per cent) and settlements for industrial tribunals (16 per cent).
The findings also highlighted that the real cost of employee misunderstanding may be even higher when costs such as impact on brand, reputation and customer satisfaction are taken into account. All survey respondents reported that employee misunderstanding had placed their organisation at risk of injuries to employees or the public and reduced customer satisfaction in the last 12 months.
Of those organisations with an assessment programme in place more than 60 per cent reported fewer human errors, reduced employee churn and reduced health and safety breaches.“This is the first time the cost of employee misunderstanding has been calculated. Large organisations are potentially losing millions of dollars each year to 'employee misunderstanding' yet very few are taking action or are even aware a problem exists,” said Lisa Rowan, program director HR and Talent Management services, IDC. “The potential impact and repercussions from this misunderstanding should be addressed by all organisations and at the highest level.”
The white paper recognises that a face-to-face approach in an organisation with employees in different locations is often logistically difficult, expensive and liable to errors. But, it suggests that the problem can be overcome by on-line assessments that employees can complete in their own time and which enables directors to assess quickly and cost effectively the location of the source of the problem. Surprisingly, the research revealed that only 6 per cent of the surveyed organisations had such a solution in place.
Article courtesy: http://www.theretailbulletin.com/news/retail_sector_counts_the_cost_of_employee_misunderstanding_16-07-08/
Wednesday, July 16, 2008
Spencer's ties up with US cafe chain
Spencer's Retail, part of the diversified RPG group, said on Tuesday it has tied up with U.S. bakery cafe chain, Au Bon Pain, to set up outlets in India.
Spencer's will spend 500 million rupees in two years to set up 100 standalone outlets of the cafe chain in India, Sanjiv Goenka, vice-chairman of RPG Enterprises, said.
Under the joint venture agreement, Spencer's Retail, owned by RPG's flagship power utility firm CESC Ltd (CESC.BO: Quote, Profile, Research), will be the franchise for the cafe chain in India, he said.
Au Bon Pain, the Boston-based fast casual dining and bakery chain, has over 200 outlets in the United States, South Korea, Taiwan and Thailand, Goenka said.
The outlets will come up in big cities and small towns of India, he added.
Spencer's will spend 500 million rupees in two years to set up 100 standalone outlets of the cafe chain in India, Sanjiv Goenka, vice-chairman of RPG Enterprises, said.
Under the joint venture agreement, Spencer's Retail, owned by RPG's flagship power utility firm CESC Ltd (CESC.BO: Quote, Profile, Research), will be the franchise for the cafe chain in India, he said.
Au Bon Pain, the Boston-based fast casual dining and bakery chain, has over 200 outlets in the United States, South Korea, Taiwan and Thailand, Goenka said.
The outlets will come up in big cities and small towns of India, he added.
Tuesday, July 15, 2008
Aditya Birla Retail looking at six-fold increase in employee strength; undertakes measures to combat attrition
Aditya Birla Retail, a retail initiative of Kumarmangalam Birla group, which is currently operating 300 retail stores and employing about 8,000 persons, according to Santrupt B Misra, its Director-HR and IT, is looking at increasing the total number of employees to 55,000 for its retail business. He was speaking at a seminar of the National HRD Network in Kolkata.
He informed that attrition rate for the group was at 9%. Of late, this is becoming a major cause of HRM concern, for all business groups. Incidentally, A V Birla group was recently adjudged as the best employer across the country.
Although, the rate of attrition was not very high, the group is looking at outsourcing some of its HR practices. While, overcoming the ill effects of attrition, this would also help the company to grow faster, he added. Employee grievance handling, payroll structuring, etc, are among the services that may be outsourced by the company. Employee induction and training are the services that are increasingly being outsourced by the company.
Misra also informed that to retain employees, 400 employees, were also offered ESOP, this year.
The company is also looking at recruiting employees from outside India, especially for services and expertise that people in India lack.
“In India, there are very few people trained on merchandise and large store management. People also do not know what to do with agri-products, their purchases, etc. We would therefore look at hiring people from outside India for these kind of expertise,” said Misra.
The company provided ESOP to 400 of its employees, in order to combat attrition.
Article was first published on: http://www.indiaretailbiz.com/blog/2007/12/05/aditya-birla-retail-looking-at-six-fold-increase-in-employee-strength-undertakes-measures-to-combat-attrition/
Retail market redefined
In the global economy, retailing is one of the largest sectors and it is going through a transition phase in India. Grocery store in the neighbourhood was the only choice available to the customers few years back. But now that scene is being rewritten by a retailing revolution brought about by the showrooms like Vishal Mega Mart. The opening of showrooms like Vishal Mega Mart is giving a new meaning to the selling of garments and accessories. This group has come up with a chain of 13 showrooms in major cities — Kolkata, Jaipur, Kota, Ranchi, Siliguri, Bhuvaneshwar, Cuttak, Varanasi and Delhi. The group has come up with four showrooms in Delhi, their largest number in one city — in Rajouri Garden, Karol Bagh, Pitampura and Vikas Marg. The fifth showroom is coming up at NH-8, near Shiv Murti. From manufacturing to retailing, today these showrooms have become a name to reckon with. The group has transformed the retail market with a bang and is now considered as one of the best chains of retail showrooms in the country with expected turnover of Rs.90 crores this year. R.C. Agarwal and S.K. Agarwal have been at helm of affairs of this mart which has emerged as the ideal family store for the common man and with its unique and reasonable range of garments. According to them their concept of retailing is unique as all of its stores are positioned around two important planes — Indian family store and value. The concept of complete family store is also unique in itself because it is one of the first companies to provide high quality garments at affordable prices. Vishal has exclusive range of summer to winter wears, latest to hottest, ethnic to elegant, casual to formal at reasonable prices. Their fresh arrivals include ladies cardigan, ladies sweater, ladies jacket, gents sweater, gents jacket, gents blazer, kids suit, kids blazer, and all other winter stuffs. Their in-house design capabilities have helped its brands to make a mark in the market well ahead of its competitors. This article was first published on: http://timesofindia.indiatimes.com/articleshow/476176.cms |
Future Retail Capital of the country
| Growth of retail in any market is directly proportional to the increase in the gross domestic income of the residents. With the retail sector in Bangalore growing at an annual rate of 45 percent, the City today figures among the list of preferred launch markets in the country, finds out Bindu Gopal Rao. | |
| The retail market in south India was valued at Rs 2,62,930 crore (as per 2006 prices). Of this, the size of the organised retail market in 2006 stood at Rs 12,825 crore, representing 4.9 per cent of the total retail market. This article was first published on: http://www.deccanherald.com/content/Dec282007/realty2007122743396.asp | |
Smart product mix for smart apparel supply chain
To 'brake' in this explosion of manufacturing lots, an A-B-C analysis could be carried out to rationalize the product-base after critically looking into the contribution of each variable (color, count, design etc.) to the final product basket.
By taking out A-B-C analysis of sales across product items, significant insights can be gained over the product-mixes having maximum impact on firms top line. In composite mills set up, it is often found that less than 20 percent product-items contribute over 80 percent of revenue. Balance 80 percent of the product mix can be rationalized keeping cost-benefit trade off in mind.
Similar A-B-C analysis can be undertaken at different stages of textile supply chain, to determine number of lots contributing to final product varieties. For instance, in spinning A-B-C analysis might reveal that only 30 percent of lots (count-blend combination) contribute to 80 percent of final product basket. So there is enough scope to trim down the balance 70 percent of 'spinning lots' without having much impact on product diversity. Similarly it can be found minority of lots in dyeing (fibre) or in weaving contribute to majority items in the final product basket. Hence, it is judicious to whittle down some of the lots in these stages to maximise operational effectiveness without taking a beating on final profitability on account of lost diversity.
Tailoring Product-Mix Holds The Key:
Already a high degree of variability presents in retail due to volatile fashion and ever-shortening season. Product lines get proliferated with creation of new segments. For e.g., in sports wear the already established lines- golf wear, tennis wears or swim wear are common, now 'Yoga' wear is in hip. Moreover, product-lines, sizes and overall fits vary with globalisation of market. All these tend to amplify S.K.U variability at retail level to an unprecedented level.
Retailer and buying houses need to manage this diversified product lines right through different stages- product development, sample approval, bulk sourcing of components, production or outsourcing apparel, distributing finished product across retail outlets and merchandising. And all these activities need to be coordinated across vast geographical distance. This complexity of operation is magnified many times by the increasing product mixes in the basic textile fabric.
Most of the times the adverse impacts of product proliferation go unnoticed by the frontline organizations (retailer or buying houses), as organizations in textile-apparel-retail chain are seldom inter-connected, and very little coordination exists among different players up to the initial textile manufacturers.
Retailers have to realize that they should not focus only on purchasing and selling, but on the entire supply chain. Because, should a manufacturer not be in a position to deliver the goods at an agreed point of time, delays run through the entire supply chain up to the end customer. Based on the given configuration of apparel supply chain, the retailer has little possibility to exercise control in this process.
Even relatively simple garments depend on the combination of a fabric from one factory, buttons & zipper from another, and snaps from yet another, all of which must come together in time for the finished apparel to be stacked on store shelves.
Moreover, as product development consists of developing & selecting fabric swatches, figuring out garment style and merchandise flow, proliferation of product-mix results in high product development cost, long design-to-market cycle time. Typically design-to-market time for a fashion-apparel item is 6 to 9 months. Generally it is found that 70 percent of this time comprises non-value added activities such as communication delay, waiting time for assortments, and non-approval of merchandise at various stages etc.
The paper shows that a judicious product mix in basic textile material will make the entire apparel supply chain more manageable without sacrificing the end diversity in terms of apparel fit, size and style that attract the consumer's imagination.
About the Author:
The Author is a supply chain professional. Having graduated from Indian Institute of technology, Delhi, he has experience in leading textile and apparel organizations. He is currently with KDS group, Bangladesh as Chief Operating Officer.
This article was first published on: http://www.fibre2fashion.com/industry-article/13/1244/smart-product-mix6.asp
Retail Selling Can Save Your Bottom Line
A Guest Article by Melinda M. Minton of Minton Business Solutions
Retail selling can save your bottom line. In fact, the profits made from retail can beastronomical if you approach the opportunity in the right way. Susie Fields, founder of Salon Training International based in Oceanside, California is a licensed cosmetologist who formerly owned Passion A Salon in San Diego. Now she coaches salon owners, distributors and professional beauty sales teams. “When I opened my salon I thought I knew business. I had theories and formulas, and guess what? Many of them didn’t hold water in reality,” shares Fields. According to the Green Book industry standards report the average spa/salon has a $25 service ticket and a $3.25 retail ticket. This of dreary picture of retail sales could certainly stand some improvement.
“How many products do you use on your hair? At least two, right? Most people use both a shampoo and conditioner. Really the average number of products that a client needs just for their hair is four!! Who among us doesn’t use a styling aid and hairspray? Think about facial products. The typical 35 year old client needs a variety of makeup items PLUS a cleanser, toner, moisturizer, scrub and masque. $3.25 average ticket price…that just doesn’t add up for me,” says Fields. It is true that spa technicians simply are not selling much retail. The problem is multifold and the infection runs deep. Estheticians think that the act of selling products is a dirty, unnatural offense similar to selling used cars or fencing stolen watches in a dark back alley. The technicians who do not understand the need to equip their clients with home care are without the business savvy and systems necessary to increase and track their sales.
“We help professional beauty providers understand how to sell retail and how to run their numbers on a weekly basis to measure their sales success,” says Fields. Knowing how to measure an average ticket amount is relatively simple. Take your total service sales for one week and divide it by the number of clients seen. You can do the same with retail sales by totally up those sales numbers and dividing it, once again, by the total number of clients seen. Finding out how much each of your technicians make per hour is also simple. Take their total retail and service sales amounts and divide by the total number of hours worked and voila, that is what that individual makes per hour for the spa. Using this type of formulation with each employee as a coaching technique helps to motivate and manage an employee.
If a goal were to be set for retail it would have to be (AT LEAST!!) a dollar for dollar draw. A $95 facial then would have to sell $95 in retail. That would mean a hydrating balm and an eye cream. Selling those two products would be about as difficult as breathing. After a service is successfully executed, the technician is ‘queen.’ The client wants to maintain the look that was just created and if she could find the funds to come to your spa she surely can afford to enjoy the same pampering while away from the spa.
Deborah Barkley, a long time spa manager currently located in Honolulu thinks that education is key to selling retail. “I’ve worked a great deal with Sonia Borgosian at Biojouvance and I know that her training is the key to our retail success. Technicians have to know what they are selling inside and out. That very often is never translated to estheticians with many product lines,” says Barkley. The battle between spa directors and owners who want to make a profit and therapists who are natural client pleasers, however, is a deep chasm to jump. “Technicians are in the front lines and they speak, touch and interact with the clients far more than the rest of the management team. They need to feel comfortably managed and well-educated in order to perform up to the standards of spa directors and owners,” says Barkley.
Working retail into packages for lifestyle enhancement is one easy way to ensure retail results. For instance if a client is wanting to experience a body wrap that client can be redirected to a series of body wraps that include endermologie or lypossage, a counseling session with a nutritionist and a personal trainer as well as a home care kit. Home care like herbal supplements, bath soaks and cellulite diminishing body cream is just as crucial to getting results as the in spa services. If you market the package as a lifestyle enhancement session that lasts over a span of time including retail, there is very little that can go wrong. The same holds true for microdermabrasion sessions. A single microdermabrasion treatment is helpful but results are best realized when a series of treatments is done and when combined with appropriate home care to help soothe, hydrate and heal the skin.
Another method that has proven effective for several spas is the notion of having a top sales person work the retail area as a closer. The closer takes the client in a smooth transitional hand-off from the technician performing the client’s services. A home care routine is then devised from the notes that the technician has made based on her findings during the service. “We actually use a 3 part prescription like pad. The client gets one part, the esthetician files one part and the third part is used to enter the client data into the computer. That way when the client comes back and requires a replenishing of her home care the retail attendant can simply look up the specifics of that client’s routine,” says Cherrie Tymine of Body and Soul in Ontario Canada.
Although the method of utilizing a closer can be powerful, it does have some drawbacks. “We went through some transitional periods when we originally implemented the program. The estheticians felt like we had taken away their position as a professional. As a result they lashed out at the retail staff and the clientele got a hostile image of our staff,” says Tymine. The management at Body and Soul resolved the issue by adjusting the commissions to make both the esthetician and the retail salesperson responsible for the sale. “It really does take selling in the treatment room as well as selling in the retail area to complete the sale,” points out Tymine.
Yet another way to create a lucrative retail environment is to adjust the way that staff members are being paid. The common commission structure is a 50/50 split of the gross service sales with a 12% or lower commission on retail sales. Although this is a common payment setup within the industry, it makes for an unprofitable bottom line. Some spas have opted to plump up their retail sales by giving an hourly wage with the commission portion of the technician’s salary being as high as 30-40% of the gross retail sales amount. “We find that we keep the serious professionals and we lose those who aren’t willing to sell retail. Even with the labor shortage that this industry is currently experiencing, we find that it is worth it to sift through and then retain the gems,” says Christi Mokler of The Face Station in New York City.
No matter what method of retailing you try it’s important to remember that the spa industry didn’t invent the concept of selling. Tap into resources in your local bookstore for general business. The same tricks, formulas and methods that the general business population utilizes will also work in your retail area.
This Article was first published on: http://spas.about.com/library/weekly/aa120201a.htm
Monday, July 14, 2008
Growth of Retail Companies in India
Growth of Retail Companies in India:
Growth of Retail Companies in India exhibits the boom in the retail industry in India over the years. The increase in the purchasing power of the Indian middle classes and the influx of the foreign investments have been encouraging in the Growth of Retail Companies in India.
Growth of Retail Companies in India : OverviewGrowth of Retail Companies in India is still not yet in a matured stage with great potentials within this sector still to be explored. Apart from the retail company like Nilgiri's of Bangalore, most of the retail companies are sections of other industries that have stepped in the retail sector for a better business. The Growth of Retail Companies in India is most pronounced in the metro cities of India, however the smaller towns are also not lagging behind in this. The retail companies are not only targeting the four metros in India but also is considering the second graded upcoming cities like Ahmedabad, Baroda, Chandigarh, Coimbatore, Cochin, Ludhiana, Pune, Trivandrum, Simla, Gurgaon, and others. The South Indian zone have adopted the process of shopping in the supermarkets for their daily requirements and this has also been influencing other cities as well where many hypermarkets are coming up day to day.
Reasons for the fast Growth of Retail Companies in India:The retail companies are found to be rising in India at a remarkable speed with the years and this have brought a revolutionary change in the shopping attitude of the Indian customers. The Growth of Retail Companies in India is facilitated by certain factors like -
existing Indian middle classes with an increased purchasing power
rise of upcoming business sectors like the IT and engineering firms
change in the taste and attitude of the Indians
effect of globalization
heavy influx of FDI in the retail sectors in India To get further details on the Growth of Retail Companies in India and other retail chain of companies in India, please browse through the following links:
Big Bazar
Giants
Shoprite
Lifestyle
Pantaloons
Pyramids
Shoppers Stop
Trent -->
Landmark
Indus Fila
Fame Adlabs
Fun Republic -->
Inox
PVR
Growth of Retail Companies in India exhibits the boom in the retail industry in India over the years. The increase in the purchasing power of the Indian middle classes and the influx of the foreign investments have been encouraging in the Growth of Retail Companies in India.
Growth of Retail Companies in India : OverviewGrowth of Retail Companies in India is still not yet in a matured stage with great potentials within this sector still to be explored. Apart from the retail company like Nilgiri's of Bangalore, most of the retail companies are sections of other industries that have stepped in the retail sector for a better business. The Growth of Retail Companies in India is most pronounced in the metro cities of India, however the smaller towns are also not lagging behind in this. The retail companies are not only targeting the four metros in India but also is considering the second graded upcoming cities like Ahmedabad, Baroda, Chandigarh, Coimbatore, Cochin, Ludhiana, Pune, Trivandrum, Simla, Gurgaon, and others. The South Indian zone have adopted the process of shopping in the supermarkets for their daily requirements and this has also been influencing other cities as well where many hypermarkets are coming up day to day.
Reasons for the fast Growth of Retail Companies in India:The retail companies are found to be rising in India at a remarkable speed with the years and this have brought a revolutionary change in the shopping attitude of the Indian customers. The Growth of Retail Companies in India is facilitated by certain factors like -
existing Indian middle classes with an increased purchasing power
rise of upcoming business sectors like the IT and engineering firms
change in the taste and attitude of the Indians
effect of globalization
heavy influx of FDI in the retail sectors in India To get further details on the Growth of Retail Companies in India and other retail chain of companies in India, please browse through the following links:
Big Bazar
Giants
Shoprite
Lifestyle
Pantaloons
Pyramids
Shoppers Stop
Trent -->
Landmark
Indus Fila
Fame Adlabs
Fun Republic -->
Inox
PVR
Scope of the Indian Retail Market
Scope of the Indian Retail Market
The scope of the Indian retail market is immense for this sector is poised for the highest growth in the next 5 years. The India retail industry contributes 10% of the countries GDP and its current growth rate is 8.5%. In the Indian retail market the scope for growth can be seen from the fact that it is expected to rise to US$ 608.9 billion in 2009 from US$ 394 billion in 2005. The organized retailing sector in India is only 3% and is expected to rise to 25- 30% by the year 2010. There are under construction at present around 325 departmental stores, 300 new malls, and 1500 supermarkets. This proves that there is a tremendous scope for growth in the Indian retail market. The growth of scope in the Indian retail market is mainly due to the change in the consumers behavior. For the new generation have preference towards luxury commodities which have been due to the strong increase in income, changing lifestyle, and demographic patterns which are favorable.
The scope of the Indian retail market have been seen by many retail giants and thats the reason that many new players are entering the India retail industry. The major Indian retailers are:
Pantaloons Retail India Ltd
Shoppers Stop
Bata India Ltd
Music World Entertainment Ltd Judging the scope for growth in the India retail industry many global retail giants are also entering the Indian retail market. They are :
Tesco
Metro AG
Wal- Mart The scope for growth in the Indian retail market is seen mainly in the following cities:
Mumbai
Delhi
Pune
Ahmedabad
Bangalore
Hyderabad
Kolkata
Chennai The scope of the Indian retail market is very vast. And for it to reach its full potential the government and the Indian retailers will have to make a determined effort.
The scope of the Indian retail market is immense for this sector is poised for the highest growth in the next 5 years. The India retail industry contributes 10% of the countries GDP and its current growth rate is 8.5%. In the Indian retail market the scope for growth can be seen from the fact that it is expected to rise to US$ 608.9 billion in 2009 from US$ 394 billion in 2005. The organized retailing sector in India is only 3% and is expected to rise to 25- 30% by the year 2010. There are under construction at present around 325 departmental stores, 300 new malls, and 1500 supermarkets. This proves that there is a tremendous scope for growth in the Indian retail market. The growth of scope in the Indian retail market is mainly due to the change in the consumers behavior. For the new generation have preference towards luxury commodities which have been due to the strong increase in income, changing lifestyle, and demographic patterns which are favorable.
The scope of the Indian retail market have been seen by many retail giants and thats the reason that many new players are entering the India retail industry. The major Indian retailers are:
Pantaloons Retail India Ltd
Shoppers Stop
Bata India Ltd
Music World Entertainment Ltd Judging the scope for growth in the India retail industry many global retail giants are also entering the Indian retail market. They are :
Tesco
Metro AG
Wal- Mart The scope for growth in the Indian retail market is seen mainly in the following cities:
Mumbai
Delhi
Pune
Ahmedabad
Bangalore
Hyderabad
Kolkata
Chennai The scope of the Indian retail market is very vast. And for it to reach its full potential the government and the Indian retailers will have to make a determined effort.
Mobile Retail Chain
Now, biggies rush to set up mobile retail chains:
NEW DELHI: Organised mobile retailing is set to become talk of the town with big corporate houses chalking out aggressive plans to tap over Rs 70,000 crore market. Two diversified business conglomerates — Essar and Spice Group — had recently announced combined investment plans of about Rs 1,850 crore to set up pan India mobile retail chains. Even hypermarket chains like Subhiksha have started exclusive stores for mobile retail — Subhiksha Mobile and Big Bazaar with M Bazaar. The companies are getting a boost with the fact that the mobile users are expected to cross 220 million by this year-end and 500 million by 2010 with additions of about six million subscribers every month. The retail market for mobile phones — handsets, accessories and airtime — is already over Rs 70,000 crore market growing at the rate of 15-20%. Earlier this year, even the market leader Nokia reworked its 10-year alliance with its distribution partner HCL Infosystems, which has led to Nokia venturing into direct distribution and sales. The multi-service outlets by the companies would offer end customers not just mobile handsets but also mobile accessories, new connections, value added services, after sales support and electronic products such as digital cameras, iPods and other gaming devices. "With about seven-nine new mobile models being introduced every month, there is a huge opportunity for the mobile retail market of $16 billion," Hot Spot Retails Pvt Ltd vice chairman Dilip Modi said. Spice Group has announced an investment of Rs 500 crore in the next two years in its telecom retail venture — Hot Spot Retail. Essar Group, which recently agreed to partner with Vodafone Group over a stake in Hutch-Essar, will pump in Rs 1,125 to Rs 1,350 crore over the next three years in its telecom retail venture and is expecting revenues to the tune of Rs 5,000 crore. "We will invest $250-300 million over the next three years to set up 2,500 The MobileStore outlets across the country," Essar Telecom Retail CEO Rajiv Agarwal said. Modi said, "We are planning to take the number of our Hot Spots to 400 by the end of this year and 1,500 by 2008-end. "It has already set up 50 such outlets in Delhi and these retail chains will be the window to the telecom customers in India," adds Modi. "We are expecting revenues to the tune of Rs 800 crore in the next fiscal from Rs 200 crore currently," he said, adding, "we would introduce the touch and feel demonstration for our customers rather than traditional way of purchasing mobile just by looking at the dummy model." Essar currently has 60 MobileStore across India, including 21 in Delhi. "We are also looking at opening up of 4,000 touch points in the form of stores, kiosks and shop-in-shops," Agarwal added.
This Article was first published on: http://timesofindia.indiatimes.com/articleshow/1780910.cms
NEW DELHI: Organised mobile retailing is set to become talk of the town with big corporate houses chalking out aggressive plans to tap over Rs 70,000 crore market. Two diversified business conglomerates — Essar and Spice Group — had recently announced combined investment plans of about Rs 1,850 crore to set up pan India mobile retail chains. Even hypermarket chains like Subhiksha have started exclusive stores for mobile retail — Subhiksha Mobile and Big Bazaar with M Bazaar. The companies are getting a boost with the fact that the mobile users are expected to cross 220 million by this year-end and 500 million by 2010 with additions of about six million subscribers every month. The retail market for mobile phones — handsets, accessories and airtime — is already over Rs 70,000 crore market growing at the rate of 15-20%. Earlier this year, even the market leader Nokia reworked its 10-year alliance with its distribution partner HCL Infosystems, which has led to Nokia venturing into direct distribution and sales. The multi-service outlets by the companies would offer end customers not just mobile handsets but also mobile accessories, new connections, value added services, after sales support and electronic products such as digital cameras, iPods and other gaming devices. "With about seven-nine new mobile models being introduced every month, there is a huge opportunity for the mobile retail market of $16 billion," Hot Spot Retails Pvt Ltd vice chairman Dilip Modi said. Spice Group has announced an investment of Rs 500 crore in the next two years in its telecom retail venture — Hot Spot Retail. Essar Group, which recently agreed to partner with Vodafone Group over a stake in Hutch-Essar, will pump in Rs 1,125 to Rs 1,350 crore over the next three years in its telecom retail venture and is expecting revenues to the tune of Rs 5,000 crore. "We will invest $250-300 million over the next three years to set up 2,500 The MobileStore outlets across the country," Essar Telecom Retail CEO Rajiv Agarwal said. Modi said, "We are planning to take the number of our Hot Spots to 400 by the end of this year and 1,500 by 2008-end. "It has already set up 50 such outlets in Delhi and these retail chains will be the window to the telecom customers in India," adds Modi. "We are expecting revenues to the tune of Rs 800 crore in the next fiscal from Rs 200 crore currently," he said, adding, "we would introduce the touch and feel demonstration for our customers rather than traditional way of purchasing mobile just by looking at the dummy model." Essar currently has 60 MobileStore across India, including 21 in Delhi. "We are also looking at opening up of 4,000 touch points in the form of stores, kiosks and shop-in-shops," Agarwal added.
This Article was first published on: http://timesofindia.indiatimes.com/articleshow/1780910.cms
Shrinkage and loss in Retail Industry
Loss prevention in the retail industry is concerned with thedisappearance of merchandise and currency. Most retailestablishments take a physical inventory annually, while somedo it semiannually. When the count is completed, the differencebetween the actual inventory on hand and what it should be according to purchase and sales records is called shrinkage.The causes of shrinkage are recognized as employee theft,shoplifting, and paperwork error. Other reasons for businesslosses, such as robbery, burglary, and vandalism, are separateproblems. Shoplifting and internal theft are actually untoldnumbers of separate incidents of larceny adding up to billionsof dollars of losses which are not listed in crime reports, exceptfor the relatively few cases where arrests are made.Even though shoplifting is more often publicized than employeetheft, security experts are of the opinion that the in-housethief is responsible for at least 50% of the shrinkage.~ INTERNAL THEFTThe retail industry attracts many unskilled people who work forminimum wages. Whatever the motivation, a fair percentage ofworkers succumb to temptation and steal. Many of these employeescan be persuaded or prevented from stealing. Positive programsof employee relations built around fair compensation, propersurroundings, and employer-sponsored activities can improve moraleand concern for the success of a company. The only way to reachsome employees is through a highly visible security program anda rigid company policy of prosecuting any employee caught stealingPrevention of theft requires simple but sophisticated systems forhandling merchandise and currency, which not only deter butwhich leave a trail of documents when any stealing takes place.One important step that industry can take to prevent or reduceinternal theft is to avoid hiring the potential thief or problememployee to the outset.~ PRE-EMPLOYMENT SCREENINGWhen applying for a new job most people are requested to providesome details about their education and work experience. It is atthis state, before an individual is hired, that industry mustmake the effort to determine whether or not the applicant maypose future problems, including dishonesty. Pre-EmploymentInvestigations are very important and highly recommed.~ DISCRIMINATIONThe Civil Rights Act of 1964 and other laws aimed at guaranteeingequal employment opportunities for everyone have directly affectedthe amount of information that an employer may request from a jobapplicant. Questions about age, health, marital status, arrests,religion, and race cannot be asked. While it is permissible toask about criminal convictions, it may be discriminatory if thecriminal activity in question is totally unrelated to the jobenvironment and if the conviction itself is an absolute bar toemployment.~ CRIMINAL RECORDSSuch background information is usually not available to employers.Most police departments are prohibited by law from disseminatingsuch information outside of official channels. Federal lawprohibits any criminal justice agency that receives federal fundsfrom supplying such information. In spite of the foregoing, suchdata very often does "leak out." Many Private Investigators havingaccess may supply this information with a consent release form.~ FORMER EMPLOYERSIt is standard procedure to make inquiry from previous employersregarding the job applicant. Since it is rare to get other thanpositive responses, the reliability of such information is to besuspected and weighed as a factor with other sources.~ BACKGROUND CHECKSA background check may be done in-house or through an outsideagency. However, since the job applicant is not required tosupply very much personal information these days, it may benecessary to seek other sources. There are extensive accumulations of private information about individuals who have credit cards,bank accounts, hospital records, former employment, or paid taxes.Obtaining such data may present problems with accuracy andinvasions of privacy. Many firms consider it foolish and uselessto pursue these sources, relying instead on the frankness ofpersonal references supplied by the candidate, which is not a verygood way to run any business.~ CREDIT BUREAUSFinancial information about any individual is ordinarily notsupposed to be disseminated except in connection with creditapplications. Since the credit standing of anyone is a goodindicator of stability and other traits, there is no doubt thatsuch information is often sought as part of the screeningprocess. In our metropolitan areas, the major retailers havefor many years participated in mutual protective associationswhere they maintain central records of their shoplifting anddishonest employee cases. These files are used by the member storesas part of the screening of new employees, as well as a backgroundsource when deciding the course to pursue with an apprehendedshoplifter. Since these files fall within the jurisdiction of theFair Credit Reporting Act, they must be continuously purged ofany data that is over 7 years old.~ POLYGRAPHSRetailing is one industry that uses the polygraph to a significantextent both for screening applicants and investigating suspectedcrimes. The continued use of the polygraph in industry hascome under attack in the U.S. Congress and state legislativebodies during recent years. Today, some 15 states either limitor entirely restrict such testing. Conversely there are 19 states which officially recognize the polygraph as a necessarytool for commercial purposes, and they have enacted licensingand regulatory laws. Herewith listed are some of the arguments that have been advancedby both sides in the controversy over the polygraph:1. The value of the polygrapha.Reasonalbe to administerb.Fast resultsc.Licensing generates confidence in examiners and in credibilityd.Dependable findings in most instances2. Obstacles to use of polygraphsa. Claims that it is self-incriminatingb. Violates right of privacyc. Unions oppose and advise members not to sumbit to testing~ OTHER LIE-DETECTION DEVICES AND TESTS In recent years voice-stress measuring devices have been usedwith success in that they have shown strong correlation with thepolygraph in their results. Opponents of lie-detection deviceshave been active in opposing the use of such instruments on thegrounds that they are particularly incriminating, since they cantest for stress in the voice without the subject being awareof it. This stress is the result of physiological changes in the voice. The results are unlike voice prints, which are used forother purposes. There are also a number of paper-and-penciltests available which are designed to predict or measuretrustworthiness and stability. The continued increase in therate of employee dishonesty has created a vast market for anyform of test that can offer reliability in spotting poor-riskapplicants for jobs, But remember some states restrict testing.~ PREVENTION OF MERCHANDISE THEFTThe extent of employee theft can only be approximated sinceinventory shrinkage reflects the losses from all causes. Thereare so many ways that merchandise can be stolen by employeesthat the imagination is the limit. The most successful way tocombat such theft is to prevent or discourage it. A concernedcompany must have thorough systems of control and accountabilityover merchandise from the moment it is received through thevarious stages of preparing it for sale, displaying it to shoppers,and finally handing it over to delivering it to the purchaser.Rigid adherence to these controls requires dedication by executives,supervision by middle management, interest and concern by staffemployees, and some security presence as a form of insurance.Measures that should be taken to prevent some of the common meansthat employees use to steal merchandise are mentioned later. Someof these measurers require the employment of security personnel,and oftentimes their use results in direct observation of attemptsat theft.~ EMPLOYEES' ENTRANCEWherever possible, employees should be required to use adesignated entrance when coming to or leaving work. In largeestablishments this is usually the case. Locker, cafeteria, andlounge facilities should be located in close proximity to the entrance. The time-clock area should be set up between thesefacilities and the store proper. A security person should beposted here. Personal parcels and overcoats, and so on, shouldnot be carried into the selling or stock areas. Anything thatis carried through the time-clock area should be subject toinspection. Female employees may be supplied with a clearplastic purse for personal articles they wish to have with themat work. Employees should be encouraged to keep small valuablesand money on their person. The right to frisk and even searchmay be reserved by a company under certain conditions. Theemployment application should so state, the requirement shouldbe publicized and fully explained, and this practice must beenforced in a nondiscriminatory manner. The rule should alsoapply to repair workers, contractors, salespersons, and otherswho enter the store through this area.~ PORTERSMaintenance people and porters who must work within the store during non business hours should be accompanied by security people.Plainclothes detectives should occasionally be assigned to conductobservations of such work.~ GARBAGEA favorite method of theft is to hide merchandise among therefuse before it is removed from the store. This material mustbe carefully inspected before it is removed.~ STOCKROOMSEmployees can find remote corners to idle time away or to hidestolen merchandise on their persons. Very often they will discardtheir own articles of clothing and wear the pilfered items intheir place. Once the price tickets have been removed, unlessthere is a direct observation, proof of theft is difficult toestablish. Whenever possible the stockrooms should be kept lockedas a security precaution and as a means of keeping employees on the selling floor to improve customer service. Employees shouldrequest identification of any persons entering stock areas whoare not readily recognized.~ KEYS AND LOCKSAll doors should be equipped with strong tamper-resistant locks.Where there are many doors within a structure a master key systemwith changeable cores is recommended. Access to various areascan be provided on an individual basis according to job require-ments. Employees should be cautioned to safeguard their keys. Inthe event of a lost key it may be necessary to change some cores.This is relatively inexpensive when compared the changing locks orcylinders. All keys should be collected and accounted for at theend of the working day, except for those which are used to closeand open the premises. There are many keyless access controlsystems available today which offer computer-related featuresand technology.~ STASHING MERCHANDISEBoxes, packages, and bundles of merchandise may be placed in variousplaces to be later taken away by the employee or a friend. Suchpackages may be found in secure places on the selling floor. Ifrefuse is not thoroughly checked, the garbage containers maybecome frequently used for such thefts. When such caches arediscovered, the recommended procedure is to establish surveillanceover the suspected packages.~ UNAUTHORIZED MARKDOWNSA favorite method of "theft" that most employees regard aspractically guiltless is to purchase articles at self-determineddiscounts. Marking down the price of merchandise at the proper time is an important factor in successful retailing. When markdowns are taken, various records must be adjusted to reflectthe lower value in the inventory records lest a fictitiousshortage be created. Those employees who desire an item at theheight of the season, and certainly before discounts are in order,create their own price changes in one way or another. One wayto discourage such activity is to frequently inspect goods thatare held or laid away for employees. Alert sales people or cashiers may spot such price changes, but it may not be practicalto expect them to deny the markdown to coworkers.~ RECEIVING AND SHIPPINGPlatform and shipping employees can falsify the various receivingand delivery documents. Sometimes this is done in conspiracywith truck drivers. Incoming shipments should be physicallycounted and verified against the accompanying documents. Receiptsgiven to delivery people should indicate any shortages found.Shipments should be verified again for completeness when they areunpacked and processed for the selling department. Valuable oreasily concealable items should be transferred in security binsor racks. Test counts can be done randomly as a securitymeasure. The documents which match the merchandise must be checkedfor detail, particularly as to retail price. Incorrect ticketingwill create shortage whether it is mistakenly or deliberately done.~ WAREHOUSELarge companies may have one or more warehouses where incomingmerchandise is received for storage and transshipment to retailoutlets. Sometimes the ticketing operations are done in suchwarehouses. Theoretically, a warehouse should be easier to controlthan a store from a security viewpoint, since the environment isclosed to the public. Truck drivers should not be permittedwithin the warehouse. Separate facilities should be maintainedfor them outside the perimeter, where feasible. Receivingplatforms and shipping platforms should be physically separated.Cargo documents and purchase orders should be matched, so thatproper bookkeeping is ensured. Cargo areas of trucks should belocked and sealed when transporting merchandise. Drivers shouldnot have access to the goods. It is a good idea to inspect thetrucks from time to time to ensure that they are sound. Withinthe warehouse there should be separate storage facilities formerchandise which is most often or easily stolen. Such areasmay be specially safeguarded with locks, alarms, or even closedcircuit television. If possible, management should reserve theright to search packages and persons. Typical warehouseenvironments are conducive to such activities as organizedgambling or narcotics selling. These practices can easily leadto necessity for theft. If the pushers and bookies can besingled out, efforts should be made to discharge them. This typeof problem is never permanently solved. If management does notstay alert, it will shortly return.~ THEFT OF CASHThe theft of cash also presents a major problem to the retailer. The case thieves are ordinarily those persons whose jobs requirethem to handle money.~ HOW CASHIERS STEALWithout a program of prevention, there are numerous opportunitiesfor cashier theft, among them the following;
1. Helping self to cash from common drawer register
2. Failing to give receipt to customer and voiding the sale after
customer leaves.
3. Avoiding ringing the sale; pocketing the cash
4. Under-ringing the sale; pocketing the difference
5. Failing to close register drawer after each sale
6. Imprinting more than one charge on a credit card transaction;
exchanging surplus charge slip for cash
7. Allowing accomplice to remove cash; reporting the theft later
8. Raising the amount of a check taken from a purchaser;
pocketing the difference
9. Accepting bad checks from accomplice
10. Selling to friends at discount
~ INVESTIGATION OF CASH THEFT Proper and adequate investigation is hampered by frequentemployee turnover in retailing. Very often, by the time aparticular pattern of shortage is detected, the guilty individualis gone. Some investigative procedures which may be usedaccording to modus operandi follow:
1. If shortages exist in common drawer registers, switch cashiers
daily and keep "over and short" records to track individual
performance.
2. Frequent voids, no sales, or reports of till tapping should
initiate surveillance of suspect at work. Results may be
obtained by polygraph examination.
3. Spot checks of cashier's funds during working day
4. Integrity shopping
~ INTEGRITY SHOPPINGThe integrity of cashiers can be tested by means of "honestyshopping." These tests are conducted by specially trained peoplewho pose as customers. Shoppers may be in-house or contractedfrom an outside service. Shoppers operate in different waysaccording to the type of registers in use and the way a store mayconduct cashiering operations. One method is to shop as manycashiers as possible with the expectation that dishonesty willbe detected. Another approach is to select as targets principallythose cashiers who may be suspected for one reason or another. For example, many stores maintain ongoing records relating toindividual cashier performance. Those cashiers who are consistentlyover in cash may be creating the surplus so it can be pocketed.Additionally, shoppers may be given leads by supervisors orother store personnel.~ SHOPPING TEST PROCEDURESThe basic test in any integrity shipping operation is the "evenmoney buy." All other tests are built around this one. Theshopper selects an item and pays for it with the exact amountplus the tax. The idea is to afford the employee who takes thecash an opportunity to pocket it. Therefore the shopper must bein a rush and have no time to wait for a receipt or normalwrapping. In stores where the cashier function is separate from the sales function, an "even Buy" is a bit more difficult toaccomplish. An element of successful shopping is the abilityto later identify the documentation of the "buys" on the registertapes or other sales records. This is accomplished in several ways. The sale previous to the "buy" may be observed by anothershopper. Sometimes and "identification buy" is made after thetest buy, but only if the cashier has done something irregularor suspicious.The "uneven buy" requires that the cashier make change. Thisbuy is made by shopper number two whose principal function isto observe how the money from the "even buy" is handled. The"even buy" may be part of a "double buy," wherein the shopper,on being handed the change from an "uneven buy," suddenlydecides to make an additional purchase. The shopper suggest putting the item in the same bag, hands over even money, andleaves. There can be many variations of these buys. In an"exchange buy" the shopper hesitates in selecting between twoitems. Finally, the cheaper one is chosen and paid for, but atthe transaction is completed the shopper changes to the expensiveone, pays the difference and leaves. Shoppers should mark their"buy" money or record the serial numbers in advance so thatproper identification can be made of the evidence later on.~ MONEY ROOMSA special area for handling and storing cash may be necessary inlarge stores. Cashiers are usually supplied with working funds which are turned back at the end of a shift along with moneyreceived from purchases. The constant counting, disbursing, andreceipt of cash often creates shortages that are temporaryor permanent. While error in these operations may be common,the theft of money by the employees is not rare. Money roomsshould be well constructed and burglar-resistant, if notburglarproof. Alarms should protect the perimeter, the insidearea, and the safes. Holdup buttons should be strategicallysituated. Routine operations should require at least twoemployees in the room. Premployment screening should be particularly thorough for such employees.~ INVESTIGATION OF MONEY ROOM SHORTAGESFollowing are some procedures for solving shortages originatingin the money room.
1. Thoroughly audit the entire room
2. Create deliberate error or shortage to test for reaction
3. Compare individual working schedules against times when
shortages occur
4. Determine life-styles of employees
5. Since these shortages may be substantial, do not overlook
possibility of recovering losses from insurance company. ~ REFUNDINGMost retail stores have a fairly liberal policy of allowingmerchandise to be returned and of refunding the purchase priceby either cash or check. In some stores the refunding is donethrough the selling department, where the merchandise, the priceticket, and the sales receipt are examined and authenticated.An authorization for the refund is issued at that point and givento the customer, who presents it at a service desk where theapproval is issued and payment made. If price tickets orreceipts are not presented with the refund request in suchcentralized operations, the customer is usually directed to theselling department for verification of correct price. Theremust be at least two employees directly involved in any refund,one for examination of merchandise and approval and a second tomake the payout. Procedures must be established to constantlymonitor payouts against related documents and merchandise.Deviations from these systems may be indicators of dishonestemployees. Price tickets should be found properly attached tomerchandise according to company practices. Data on thesetickets should match the merchandise being returned. Manypeople switch to higher price tickets when seeking refunds.Employees, in particular, can do this in comparative safety,since they usually know what sort of information will beaccepted as legitimate for certain merchandise. It is advisable to maintain records of refund activity for each employee forpossible detection of abuses of the system. Computers canprovide such facts to auditors and security departments at periodic intervals. There is an ongoing problem with safeguarding small items of highvalue from employee pilferage between point of refund and return toselling departments. Control records must be maintained for suchitems and special locked storage facilities provided. Supervisorsmust make daily inspections of records and facilities and seeto the secure in-store transfer of the items. Since the refundoperations are particularly vulnerable to employee dishonesty,particular care should be taken in personnel selection. Temporaryvacancies due to illness or vacation should not be haphazardlyfilled. Proper and adequate training of all employees involvedin the refund procedure should be rigid company policy.~ DETAINING SUSPECTED EMPLOYEESIt is necessary to adhere strictly to legal requirements when detaining an employee suspected of theft. Hiding money ormerchandise within the store or on the person is reasonable evidence of intent to steal. Very often, however, the suspectmay offer some farfetched excuse for so doing, and the prosecutoror the court may be of the opinion that a reasonable doubt exists.The safest course of action is to wait until an attempt is madeto remove the property from the premises. The arresting employeeshould be an eyewitness to the actual commission of the crime.A rigid policy of prosecuting all employees caught stealingusually has a deterrent effect on others. Once an employee hasbeen detained and accused of theft, the situation should beconstrued as an arrest. If there is no intention to prosecute,the investigation should be conducted without delay in an efficientmanner. The investigation should terminate with a signed confessionand a release against the company and its employees. The suspect maybe frisked or searched in order to recover the stolen property.If the complaining employee has done the proper job of witnessingthe theft, the recovery of the evidence should not pose a problem.If the detained employee is to be prosecuted, the police shouldbe notified at once and the investigation conducted and completedwithout delay. In some jurisdictions the arrest process is delegated to store security employees who deliver the necessarypaperwork to the police. Most states have passed legislation to protect the retailer in the event of false arrest claims arisingout of detentions to determine the ownership of merchandise, providedthat there was reasonable cause to act and that the investigationwas conducted in a reasonable manner.~ CASHIERSCash shortages, failure to ring up sales, and failure to givereceipts are not proof of theft. Prosecution is not recommendedunless there is a direct observation of stealing and recoveryof some tangible evidence in merchandise or money. Identifiablecash recovered from the person of the suspect is the best kind ofevidence. This is often referred to as a "pocket case." Properquestioning based on observation of highly suspicious actionscan often result in admissions of theft. Without further evidence,the best course of action is to explore the feasibility ofobtaining restitution. Oftentimes, the employee admits tofrequent thefts going back over a period of weeks or months.The amount of money involved can be significant. Very oftenrestitution can be ordered and arranged through the courts. Itis unwise to seek restitution without legal advice.~ UNDERCOVER INVESTIGATIONUndercover investigation has long been used for providingintelligence information and is no less applicable to retailing.With sophisticated retail security, improved training andtechniques, and the utilization of modern technology's latestadvances in equipment and devices, the value and effectivenessof undercover investigation cannot be minimized. As a lossprevention tool, it can provide information to security and othermanagement that is not easily obtainable by any other means.In practice, investigators posing as employees are placed withina firm. This effects their "cover" and should be done through normal placement procedures, with as few people "in the know" aspossible during the term of the investigation. Resulting meaningful information is then accurately conveyed, as quickly aspossible, to those executives who can put it to work. Onceplaced, these investigators then blend and mingle, developingrelationships with their associates for the purpose of locating andidentifying employee dishonesty. This is the primary objectiveunder most circumstances and one which cannot generally beaccomplished by in-house security personnel, because of knownidentities, techniques and so on. Additionally, relationshipswhich are fruitful are evolved over a period of time and requirepatience and planning in developing the confidence of targets orother coworkers. While some information comes from occasionalobservation of isolated spontaneous thefts, the major portion of criminal information is developed over a longer period, afterpurposeful planning of the operative's approach to acceptance,and effective performance. Most information is developed throughconfidential conversation, initially with the use of comments and remarks specifically designed to elicit a response. This, ofcourse, must always remain within legal boundaries regardingentrapment. The loss prevention aspects of undercover investigationapply not only to criminal loss, but also to loss by other means.Loss and exposure to loss in operational areas can be pinpointedthrough monitoring of adherence to policy and procedures,conditions conducive to costly casualty loss, supervisoryinadequacies, systemic deviations, and so on. Also, lossprevention can apply to loss of personnel. Here, loss is generallyinsidious but can have devastating financial effects. This alsoapplies to loss, occasional and isolated as it may be, of publicesteem because of poor customer service or other reasons. Allof these factors contribute to loss, larcenous or otherwise.Loss prevention is vital in each area to insure profitableoperation and to increase the "bottom line." Undercoverinvestigation can be effective in accomplishing this. Ordinarilythe information from undercover is used to develop cases in anindependent manner, so as to avoid exposing the original source.When the information is deemed critical and there appears to belittle or no chance to proceed in another way, the cover may beblown. Causes of business losses, other than employee-related,may be due to shoplifting, robbery, burglary, bad checks, stolencredit cards, vandalism bombings, and arson. Techniques forprevention and investigation of the most prevalent of these crimesare included in this section.~ PREVENTION OF SHOPLIFTING AND OTHER CRIMESThe most efficient way to deal with the problem of crime is totake necessary steps to prevent it from taking place. Althoughit is unrealistic to expect to eliminate all crime, the proper useof people and equipment will have some effect in reducing thetotal incidence of theft and destructive acts. Some ideas are:
1. Security Guards
2. Plainclothes Detectives / Private Investigators
3. Fitting-Room Attendants
4. Shopping Services
5. CCTV Servaillance Systems
6. Employee Incentive Programs ~ SECURITY INVOLVEMENT BY STAFFThe successful security program is expected to prevent theft.Since the commission of crime cannot be wiped out, recovery ofmerchandise is equally desired. There are many retail stores thatdo not have a security staff per se. In such companies thesecurity effort depends on sales help, cashiers, stock persons,and others. Even where a security staff does exist, the totalsecurity effort will be more effective if the other employees areinvolved too. They must be trained to spot shoplifters andtaught the action to take to prevent the loss of merchandise. Ordinarily, these clerks and salespeople are not expected toapprehend wrongdoers. However, if specially trained and instructed,anyone may be expected to take necessary action, including detainingshoplifters. The actual apprehension of a person attempting tosteal merchandise from a store requires knowledge of penal statutesand codes which must be strictly obeyed. lest civil and criminalcharges result from wrongful actions. The safest policy tofollow with all employees, except those specifically employedin a security role, is to design programs aimed at preventing theft.~ AWARDS AND BONUSESMany employees perform better if there is an incentive programthat encourages interest and participation. When a bonus is givento a salesclerk who pointed out a shoplifter, other employeessit up and take notice. While it is reasonable to expect wideparticipation in combating shoplifting, the average worker willhesitate before turning in a fellow employee. Although cashawards for such information are usually larger than shoplifterawards, such incentives are not very successful. Some firmspay bonus money to security people also, since this usually keepsproductivity at a high level. However, this practice has beencriticized as a bounty system leading to over zealousness and falsearrests.~ LOSS PREVENTION PROCEDURESAlthough some shoplifting is inevitable, there are things that canbe done to keep it to a minimum. All employees must be committedto enforcing those of the following procedures that are adoptedby the establishment.
1. Articles of high value and easily pilfered should be safeguarded
under glass or locked away.
2. Article surveillance or chains should be properly used.
3. Merchandise should be returned to stock after showing it to
customers.
4. Displays should be set up so that they do not clock easy
viewing by employees.
5. Before being handed over to purchasers, contents of preboxed
merchandise should be inspected.
6. ID should be requested of any strangers in nonselling areas.
7. Price tags should not be loose or easily removed.
8. Prompt attention should be paid to customers, always.
9. Salespeople should not to turn their backs to customers.
10. Legitimate purchases should be easily differentiated from
other packages.
11. All discarded sales receipts found on floor or anywhere else
should be picked up.
12. Salespeople should be alert to the fact that luggage, when
purchased, may be filled with stolen merchandise.
13. Frequent inventories of expensive or desirable merchandise
should be taken to detect the existence of a problem, so that
immediate measures can be invoked.
14. Premises should not become a hangout. Employees should be
alert to possibility of mass shoplifting.
15. There should be frequent inspections for empty boxes or
containers. The foregoing procedures are but a sampling of the
many steps that can be taken to combat losses. Other parts of
this chapter on loss prevention offer additional recommendations. ~ SHOPLIFTINGShoplifters come from all walks of life, and they may be of anyage and either sex. Shoplifters may be classified accordingto several categories: professional, amateur, juvenile, addict,and kleptomaniac. Many people who steal for the first timedo so on impulse, and if they are caught, there is a goodpossibility that they will quit. On the other hand, those whoget away with theft will most likely steal again, since it becomes easier to pilfer each succeeding time. Shoplifting issimilar to many other crimes in that the lawbreaker will tendto return to the same place where he or she was previouslysuccessful.~ SHOPLIFTING METHODSFollowing are some of the multitude of ways in which shopliftersoperate:
1. Merchandise is concealed in boxes, bags or purses. Professionals
may carry booster boxes.
2. Merchandise is concealed in clothing. Professionals may wear
garments fitted with large pockets or hooks. Oversized garments
may be worn to afford easy concealment.
3. Stolen garments are worn in plain sight and out of the store.
4. Merchandise is carried between thighs and hidden by long
skirt or overcoat.
5. Professionals wrap garments around the legs and tuck them
into tops of socks.
6. Small articles may be carried out hidden in the palm of the hand.
7. Some thieves snatch articles and run out of the store. ~ INDICATIONS OF POSSIBLE SHOPLIFTINGStore personnel should be alert to the following signs that shouldcause suspicion of shoplifting.
1. People wearing overcoats out of season, or raincoats on a
clear day.
2. People carrying boxes, bags, or umbrellas which could be
used to conceal merchandise.
3. Nervous-looking people who are constantly touching the backs
of their heads, tugging at sleeves, or adjusting socks.
4. Exceptionally fussy people who cannot seem to make up their
minds about a purchase, or do not appear interested in purchasing
an article that they have been examining.
5. People who walk around and constantly keep one hand in a pocket.
6. People who come back to the same area of a store several times.
7. People who are busy looking about, rather than at merchandise.
People who appear to be nervous.
8. People who walk into stockrooms or behind counters and have
no business in such places.
9. Men who carry shopping bags. ~ APPREHENSION OF SHOPLIFTERSMany states have enacted laws specifically aimed at shoplifting.Otherwise the crime of shoplifting is covered by the larcenystatutes. Generally, once it has become evident that the intentof the individual is to steal the article, the crime has beencommitted. If the suspect secretes the merchandise inside ashirt or under a dress, it may not be necessary to wait untilthe person exits from the store. However, there are jurisdictionsand there are individual judges who do not agree on this point,hiding that unless the suspect has gone past the last possiblecash register where payment could be made, the intent is notclear and it can be rebutted. Therefore, unless the statute isextremely clear on this point, the safest course of action is tomake the first contact with the shoplifter at the exit. Thestore detective should attempt to keep the apprehension as lowkey as possible. There is less chance of disturbing othershoppers or of creating a physical confrontation when this isdone properly. Store personnel must be alert and watch for theunexpected. The shoplifter may attempt to run, may assault theemployee, or may even pull a weapon. The training of the securitystaff is the key to ensure proper action in accordance withdeveloping circumstances. When guards are posted at or nearexits, they should assist in apprehensions if requested.Ordinarily, the suspect will come along quietly when asked. Ifthe detective has made proper observations, the recovery of stolenarticles should be uncomplicated. Suspects should be frisked forweapons and, when necessary, a complete search may be made. Theuse of handcuffs is recommended when appropriate.~ CHECKSA significant portion of retail sales is transacted by personalchecks. To many thieves, there is less risk in passing a badcheck than in shoplifting. Unless there are meaningful controlsthat are adhered to by employees who accept these checks, thelosses can become staggering. The following guidelines will helpto promote caution in accepting checks.
1. Examples of bad checks
a. Drawn on a nonexistent or closed account.
b. A forged check drawn on a legitimate account.
c. A counterfeit check.
2. Acceptance procedures
a. Accept only personal checks payable to the store.
b. Inspect the check:
1. No postdated or undated checks
2. If out-of-town bank, use extra care.
3. Must be written in ink; no erasures or corrections.
4. Numerical amount and written amount must agree.
5. Should be for exact amount of purchase.
6. Be careful of "starter" checks.
7. Be careful when customer appears unconcerned about price.
8. Company should maintain a listing of previous bad check
passers; consult list
9. Call bank if amount is over a predetermined amount or
out-of-state.
10. If bank is closed, suggest delivery of merchandise.
11. Do not be pressured into accepting check too fast.
12. Require valid identification.
13. Compare signature and photograph.
14. Record all information on back of check.
3. Acceptable identification
a. Two forms of ID should be required.
b. Legitimate driver's license.
c. Licenses (pistol, and so on), permits or ID cards with
photos.
d. Local Bank Card.
e. Medicare cards for elderly customers who do not have
drivers licenses.
Unacceptable identification includes: social security cards,bankbooks, utility bills, library cards, birth certificates, learners' permits, or membership cards.~ INVESTIGATION OF BAD CHECKSIf a bad check is inadvertently accepted, the following proceduresshould be instituted:
1. Insufficient funds
a. Re deposit and notify maker.
b. If still insufficient, request immediate payment; turn over
to collection agency, or debt recovery service.
c. Final alternative is prosecution.
d. Check with police on local practice and procedure.
2. Closed accounts and forgeries
a. Identify the check passer. This may be difficult or
impossible because the check may have been stolen or the clerk
may not recall the individual
b. police reports and notification to banks, motor vehicle
bureau, credit card companies tend to verify the depositor's
statements in connection with the whereabouts of the check.
c. Interview cashiers to get leads.
d. Publicize current names or aliases being used.
e. Communicate with other retailers and the police.
f. Alert refund departments.
g. Prosecute when absolute identification has been made. ~ CREDIT CARDSLosses due to acceptance of lost or stolen credit cards are on theincrease. Suggested procedures which help cut such losses are:
1. Examine card for authenticity; expiration date. Imprinted
name and signature must match.
2. Use terminal or telephone to obtain authorization.
3. Follow instructions according to code. If "hot card," confiscate
if possible. If above floor limit, may need additional ID.
Customer may be advised "cash only".
4. Be aware that lost or stolen cards issued by out-of-state
banks experience unusual time lag in appearing on "hot list".
5. Examine ID carefully; compare signatures.
6. Be wary of customers who appear unconcerned about price of
merchandise.
7. Watch out for customers in a hurry, particularly at closing time. ~ MISCELLANEOUS CASHIER GUIDELINES In addition to adhering to acceptance procedures with checks andcredit cards, employees who handle sales transactions must beconstantly alert to render efficient service, pay attention toprices, and safeguard the contents of registers. Training andinstructions such as the following should cover potential problems:
1. Know the merchandise; prices; number of pieces.
2. Do not turn away from an open register drawer; keep it closed
between transactions.
3. Do not count the contents of register on the selling floor.
4. Do not leave register unlocked; take the key.
5. If unusual amount of cash has been taken in, request it be
collected.
6. If customer claims to be shortchanged, request assistance.
7. Allow only properly identified persons behind showcases and
counters.
8. Be alert to detect counterfeit bills.
a. Portrait appears lifeless and background lines not distinct.
b. Treasury seal may have uneven points.
c. Border lines are not clear and distinct.
d. May be printed on bond paper without red and blue fibers;
or printed with red and blue lines to resemble fibers.
e. Strip in $10, 20,50, 100.
9. Be alert for till tappers.
a. They create confusion, drop change, start an argument,
divert attention while accomplice steals from register.
b. On any suspicion, close the drawer.
~ REFUND OPERATORSSome shoplifters find it more lucrative to refund stolen goodsthan sell them. Very often items that have been purchased with bad checks are converted into cash this way, especially byprofessionals. Some thieves find it less risky to seek a refundfor stolen merchandise without ever leaving the store. Somepolicies which may be established to combat these practicesfollow:
1. Make refunds payable by check in the mail.
2. Insist on price tickets and sales receipts.
3. Verify merchandise and price in appropriate selling department.
4. Examine documents for alterations or erasures.
5. If purchase was made by check, allow time to clear.
6. Make refunds on credit card purchases through account.
7. Steal an item of merchandise, return same item for a refund without
sales slip. ~ CONCLUSIONShrinkage is an insidious illness which does not cure itself.Proper systems will contribute toward prevention of losses, butthere must be constant follow-up and reevaluation to ensure thatwhat was adequate yesterday is still applicable today. Crime ison the march, and new schemes are constantly being devised.Expertise i loss prevention is as essential in today's retail worldas fashion and salesmanship. The merchant has recognized andaccepted the fact the money spent to protect company assets doesits share in providing profits.
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1. Helping self to cash from common drawer register
2. Failing to give receipt to customer and voiding the sale after
customer leaves.
3. Avoiding ringing the sale; pocketing the cash
4. Under-ringing the sale; pocketing the difference
5. Failing to close register drawer after each sale
6. Imprinting more than one charge on a credit card transaction;
exchanging surplus charge slip for cash
7. Allowing accomplice to remove cash; reporting the theft later
8. Raising the amount of a check taken from a purchaser;
pocketing the difference
9. Accepting bad checks from accomplice
10. Selling to friends at discount
~ INVESTIGATION OF CASH THEFT Proper and adequate investigation is hampered by frequentemployee turnover in retailing. Very often, by the time aparticular pattern of shortage is detected, the guilty individualis gone. Some investigative procedures which may be usedaccording to modus operandi follow:
1. If shortages exist in common drawer registers, switch cashiers
daily and keep "over and short" records to track individual
performance.
2. Frequent voids, no sales, or reports of till tapping should
initiate surveillance of suspect at work. Results may be
obtained by polygraph examination.
3. Spot checks of cashier's funds during working day
4. Integrity shopping
~ INTEGRITY SHOPPINGThe integrity of cashiers can be tested by means of "honestyshopping." These tests are conducted by specially trained peoplewho pose as customers. Shoppers may be in-house or contractedfrom an outside service. Shoppers operate in different waysaccording to the type of registers in use and the way a store mayconduct cashiering operations. One method is to shop as manycashiers as possible with the expectation that dishonesty willbe detected. Another approach is to select as targets principallythose cashiers who may be suspected for one reason or another. For example, many stores maintain ongoing records relating toindividual cashier performance. Those cashiers who are consistentlyover in cash may be creating the surplus so it can be pocketed.Additionally, shoppers may be given leads by supervisors orother store personnel.~ SHOPPING TEST PROCEDURESThe basic test in any integrity shipping operation is the "evenmoney buy." All other tests are built around this one. Theshopper selects an item and pays for it with the exact amountplus the tax. The idea is to afford the employee who takes thecash an opportunity to pocket it. Therefore the shopper must bein a rush and have no time to wait for a receipt or normalwrapping. In stores where the cashier function is separate from the sales function, an "even Buy" is a bit more difficult toaccomplish. An element of successful shopping is the abilityto later identify the documentation of the "buys" on the registertapes or other sales records. This is accomplished in several ways. The sale previous to the "buy" may be observed by anothershopper. Sometimes and "identification buy" is made after thetest buy, but only if the cashier has done something irregularor suspicious.The "uneven buy" requires that the cashier make change. Thisbuy is made by shopper number two whose principal function isto observe how the money from the "even buy" is handled. The"even buy" may be part of a "double buy," wherein the shopper,on being handed the change from an "uneven buy," suddenlydecides to make an additional purchase. The shopper suggest putting the item in the same bag, hands over even money, andleaves. There can be many variations of these buys. In an"exchange buy" the shopper hesitates in selecting between twoitems. Finally, the cheaper one is chosen and paid for, but atthe transaction is completed the shopper changes to the expensiveone, pays the difference and leaves. Shoppers should mark their"buy" money or record the serial numbers in advance so thatproper identification can be made of the evidence later on.~ MONEY ROOMSA special area for handling and storing cash may be necessary inlarge stores. Cashiers are usually supplied with working funds which are turned back at the end of a shift along with moneyreceived from purchases. The constant counting, disbursing, andreceipt of cash often creates shortages that are temporaryor permanent. While error in these operations may be common,the theft of money by the employees is not rare. Money roomsshould be well constructed and burglar-resistant, if notburglarproof. Alarms should protect the perimeter, the insidearea, and the safes. Holdup buttons should be strategicallysituated. Routine operations should require at least twoemployees in the room. Premployment screening should be particularly thorough for such employees.~ INVESTIGATION OF MONEY ROOM SHORTAGESFollowing are some procedures for solving shortages originatingin the money room.
1. Thoroughly audit the entire room
2. Create deliberate error or shortage to test for reaction
3. Compare individual working schedules against times when
shortages occur
4. Determine life-styles of employees
5. Since these shortages may be substantial, do not overlook
possibility of recovering losses from insurance company. ~ REFUNDINGMost retail stores have a fairly liberal policy of allowingmerchandise to be returned and of refunding the purchase priceby either cash or check. In some stores the refunding is donethrough the selling department, where the merchandise, the priceticket, and the sales receipt are examined and authenticated.An authorization for the refund is issued at that point and givento the customer, who presents it at a service desk where theapproval is issued and payment made. If price tickets orreceipts are not presented with the refund request in suchcentralized operations, the customer is usually directed to theselling department for verification of correct price. Theremust be at least two employees directly involved in any refund,one for examination of merchandise and approval and a second tomake the payout. Procedures must be established to constantlymonitor payouts against related documents and merchandise.Deviations from these systems may be indicators of dishonestemployees. Price tickets should be found properly attached tomerchandise according to company practices. Data on thesetickets should match the merchandise being returned. Manypeople switch to higher price tickets when seeking refunds.Employees, in particular, can do this in comparative safety,since they usually know what sort of information will beaccepted as legitimate for certain merchandise. It is advisable to maintain records of refund activity for each employee forpossible detection of abuses of the system. Computers canprovide such facts to auditors and security departments at periodic intervals. There is an ongoing problem with safeguarding small items of highvalue from employee pilferage between point of refund and return toselling departments. Control records must be maintained for suchitems and special locked storage facilities provided. Supervisorsmust make daily inspections of records and facilities and seeto the secure in-store transfer of the items. Since the refundoperations are particularly vulnerable to employee dishonesty,particular care should be taken in personnel selection. Temporaryvacancies due to illness or vacation should not be haphazardlyfilled. Proper and adequate training of all employees involvedin the refund procedure should be rigid company policy.~ DETAINING SUSPECTED EMPLOYEESIt is necessary to adhere strictly to legal requirements when detaining an employee suspected of theft. Hiding money ormerchandise within the store or on the person is reasonable evidence of intent to steal. Very often, however, the suspectmay offer some farfetched excuse for so doing, and the prosecutoror the court may be of the opinion that a reasonable doubt exists.The safest course of action is to wait until an attempt is madeto remove the property from the premises. The arresting employeeshould be an eyewitness to the actual commission of the crime.A rigid policy of prosecuting all employees caught stealingusually has a deterrent effect on others. Once an employee hasbeen detained and accused of theft, the situation should beconstrued as an arrest. If there is no intention to prosecute,the investigation should be conducted without delay in an efficientmanner. The investigation should terminate with a signed confessionand a release against the company and its employees. The suspect maybe frisked or searched in order to recover the stolen property.If the complaining employee has done the proper job of witnessingthe theft, the recovery of the evidence should not pose a problem.If the detained employee is to be prosecuted, the police shouldbe notified at once and the investigation conducted and completedwithout delay. In some jurisdictions the arrest process is delegated to store security employees who deliver the necessarypaperwork to the police. Most states have passed legislation to protect the retailer in the event of false arrest claims arisingout of detentions to determine the ownership of merchandise, providedthat there was reasonable cause to act and that the investigationwas conducted in a reasonable manner.~ CASHIERSCash shortages, failure to ring up sales, and failure to givereceipts are not proof of theft. Prosecution is not recommendedunless there is a direct observation of stealing and recoveryof some tangible evidence in merchandise or money. Identifiablecash recovered from the person of the suspect is the best kind ofevidence. This is often referred to as a "pocket case." Properquestioning based on observation of highly suspicious actionscan often result in admissions of theft. Without further evidence,the best course of action is to explore the feasibility ofobtaining restitution. Oftentimes, the employee admits tofrequent thefts going back over a period of weeks or months.The amount of money involved can be significant. Very oftenrestitution can be ordered and arranged through the courts. Itis unwise to seek restitution without legal advice.~ UNDERCOVER INVESTIGATIONUndercover investigation has long been used for providingintelligence information and is no less applicable to retailing.With sophisticated retail security, improved training andtechniques, and the utilization of modern technology's latestadvances in equipment and devices, the value and effectivenessof undercover investigation cannot be minimized. As a lossprevention tool, it can provide information to security and othermanagement that is not easily obtainable by any other means.In practice, investigators posing as employees are placed withina firm. This effects their "cover" and should be done through normal placement procedures, with as few people "in the know" aspossible during the term of the investigation. Resulting meaningful information is then accurately conveyed, as quickly aspossible, to those executives who can put it to work. Onceplaced, these investigators then blend and mingle, developingrelationships with their associates for the purpose of locating andidentifying employee dishonesty. This is the primary objectiveunder most circumstances and one which cannot generally beaccomplished by in-house security personnel, because of knownidentities, techniques and so on. Additionally, relationshipswhich are fruitful are evolved over a period of time and requirepatience and planning in developing the confidence of targets orother coworkers. While some information comes from occasionalobservation of isolated spontaneous thefts, the major portion of criminal information is developed over a longer period, afterpurposeful planning of the operative's approach to acceptance,and effective performance. Most information is developed throughconfidential conversation, initially with the use of comments and remarks specifically designed to elicit a response. This, ofcourse, must always remain within legal boundaries regardingentrapment. The loss prevention aspects of undercover investigationapply not only to criminal loss, but also to loss by other means.Loss and exposure to loss in operational areas can be pinpointedthrough monitoring of adherence to policy and procedures,conditions conducive to costly casualty loss, supervisoryinadequacies, systemic deviations, and so on. Also, lossprevention can apply to loss of personnel. Here, loss is generallyinsidious but can have devastating financial effects. This alsoapplies to loss, occasional and isolated as it may be, of publicesteem because of poor customer service or other reasons. Allof these factors contribute to loss, larcenous or otherwise.Loss prevention is vital in each area to insure profitableoperation and to increase the "bottom line." Undercoverinvestigation can be effective in accomplishing this. Ordinarilythe information from undercover is used to develop cases in anindependent manner, so as to avoid exposing the original source.When the information is deemed critical and there appears to belittle or no chance to proceed in another way, the cover may beblown. Causes of business losses, other than employee-related,may be due to shoplifting, robbery, burglary, bad checks, stolencredit cards, vandalism bombings, and arson. Techniques forprevention and investigation of the most prevalent of these crimesare included in this section.~ PREVENTION OF SHOPLIFTING AND OTHER CRIMESThe most efficient way to deal with the problem of crime is totake necessary steps to prevent it from taking place. Althoughit is unrealistic to expect to eliminate all crime, the proper useof people and equipment will have some effect in reducing thetotal incidence of theft and destructive acts. Some ideas are:
1. Security Guards
2. Plainclothes Detectives / Private Investigators
3. Fitting-Room Attendants
4. Shopping Services
5. CCTV Servaillance Systems
6. Employee Incentive Programs ~ SECURITY INVOLVEMENT BY STAFFThe successful security program is expected to prevent theft.Since the commission of crime cannot be wiped out, recovery ofmerchandise is equally desired. There are many retail stores thatdo not have a security staff per se. In such companies thesecurity effort depends on sales help, cashiers, stock persons,and others. Even where a security staff does exist, the totalsecurity effort will be more effective if the other employees areinvolved too. They must be trained to spot shoplifters andtaught the action to take to prevent the loss of merchandise. Ordinarily, these clerks and salespeople are not expected toapprehend wrongdoers. However, if specially trained and instructed,anyone may be expected to take necessary action, including detainingshoplifters. The actual apprehension of a person attempting tosteal merchandise from a store requires knowledge of penal statutesand codes which must be strictly obeyed. lest civil and criminalcharges result from wrongful actions. The safest policy tofollow with all employees, except those specifically employedin a security role, is to design programs aimed at preventing theft.~ AWARDS AND BONUSESMany employees perform better if there is an incentive programthat encourages interest and participation. When a bonus is givento a salesclerk who pointed out a shoplifter, other employeessit up and take notice. While it is reasonable to expect wideparticipation in combating shoplifting, the average worker willhesitate before turning in a fellow employee. Although cashawards for such information are usually larger than shoplifterawards, such incentives are not very successful. Some firmspay bonus money to security people also, since this usually keepsproductivity at a high level. However, this practice has beencriticized as a bounty system leading to over zealousness and falsearrests.~ LOSS PREVENTION PROCEDURESAlthough some shoplifting is inevitable, there are things that canbe done to keep it to a minimum. All employees must be committedto enforcing those of the following procedures that are adoptedby the establishment.
1. Articles of high value and easily pilfered should be safeguarded
under glass or locked away.
2. Article surveillance or chains should be properly used.
3. Merchandise should be returned to stock after showing it to
customers.
4. Displays should be set up so that they do not clock easy
viewing by employees.
5. Before being handed over to purchasers, contents of preboxed
merchandise should be inspected.
6. ID should be requested of any strangers in nonselling areas.
7. Price tags should not be loose or easily removed.
8. Prompt attention should be paid to customers, always.
9. Salespeople should not to turn their backs to customers.
10. Legitimate purchases should be easily differentiated from
other packages.
11. All discarded sales receipts found on floor or anywhere else
should be picked up.
12. Salespeople should be alert to the fact that luggage, when
purchased, may be filled with stolen merchandise.
13. Frequent inventories of expensive or desirable merchandise
should be taken to detect the existence of a problem, so that
immediate measures can be invoked.
14. Premises should not become a hangout. Employees should be
alert to possibility of mass shoplifting.
15. There should be frequent inspections for empty boxes or
containers. The foregoing procedures are but a sampling of the
many steps that can be taken to combat losses. Other parts of
this chapter on loss prevention offer additional recommendations. ~ SHOPLIFTINGShoplifters come from all walks of life, and they may be of anyage and either sex. Shoplifters may be classified accordingto several categories: professional, amateur, juvenile, addict,and kleptomaniac. Many people who steal for the first timedo so on impulse, and if they are caught, there is a goodpossibility that they will quit. On the other hand, those whoget away with theft will most likely steal again, since it becomes easier to pilfer each succeeding time. Shoplifting issimilar to many other crimes in that the lawbreaker will tendto return to the same place where he or she was previouslysuccessful.~ SHOPLIFTING METHODSFollowing are some of the multitude of ways in which shopliftersoperate:
1. Merchandise is concealed in boxes, bags or purses. Professionals
may carry booster boxes.
2. Merchandise is concealed in clothing. Professionals may wear
garments fitted with large pockets or hooks. Oversized garments
may be worn to afford easy concealment.
3. Stolen garments are worn in plain sight and out of the store.
4. Merchandise is carried between thighs and hidden by long
skirt or overcoat.
5. Professionals wrap garments around the legs and tuck them
into tops of socks.
6. Small articles may be carried out hidden in the palm of the hand.
7. Some thieves snatch articles and run out of the store. ~ INDICATIONS OF POSSIBLE SHOPLIFTINGStore personnel should be alert to the following signs that shouldcause suspicion of shoplifting.
1. People wearing overcoats out of season, or raincoats on a
clear day.
2. People carrying boxes, bags, or umbrellas which could be
used to conceal merchandise.
3. Nervous-looking people who are constantly touching the backs
of their heads, tugging at sleeves, or adjusting socks.
4. Exceptionally fussy people who cannot seem to make up their
minds about a purchase, or do not appear interested in purchasing
an article that they have been examining.
5. People who walk around and constantly keep one hand in a pocket.
6. People who come back to the same area of a store several times.
7. People who are busy looking about, rather than at merchandise.
People who appear to be nervous.
8. People who walk into stockrooms or behind counters and have
no business in such places.
9. Men who carry shopping bags. ~ APPREHENSION OF SHOPLIFTERSMany states have enacted laws specifically aimed at shoplifting.Otherwise the crime of shoplifting is covered by the larcenystatutes. Generally, once it has become evident that the intentof the individual is to steal the article, the crime has beencommitted. If the suspect secretes the merchandise inside ashirt or under a dress, it may not be necessary to wait untilthe person exits from the store. However, there are jurisdictionsand there are individual judges who do not agree on this point,hiding that unless the suspect has gone past the last possiblecash register where payment could be made, the intent is notclear and it can be rebutted. Therefore, unless the statute isextremely clear on this point, the safest course of action is tomake the first contact with the shoplifter at the exit. Thestore detective should attempt to keep the apprehension as lowkey as possible. There is less chance of disturbing othershoppers or of creating a physical confrontation when this isdone properly. Store personnel must be alert and watch for theunexpected. The shoplifter may attempt to run, may assault theemployee, or may even pull a weapon. The training of the securitystaff is the key to ensure proper action in accordance withdeveloping circumstances. When guards are posted at or nearexits, they should assist in apprehensions if requested.Ordinarily, the suspect will come along quietly when asked. Ifthe detective has made proper observations, the recovery of stolenarticles should be uncomplicated. Suspects should be frisked forweapons and, when necessary, a complete search may be made. Theuse of handcuffs is recommended when appropriate.~ CHECKSA significant portion of retail sales is transacted by personalchecks. To many thieves, there is less risk in passing a badcheck than in shoplifting. Unless there are meaningful controlsthat are adhered to by employees who accept these checks, thelosses can become staggering. The following guidelines will helpto promote caution in accepting checks.
1. Examples of bad checks
a. Drawn on a nonexistent or closed account.
b. A forged check drawn on a legitimate account.
c. A counterfeit check.
2. Acceptance procedures
a. Accept only personal checks payable to the store.
b. Inspect the check:
1. No postdated or undated checks
2. If out-of-town bank, use extra care.
3. Must be written in ink; no erasures or corrections.
4. Numerical amount and written amount must agree.
5. Should be for exact amount of purchase.
6. Be careful of "starter" checks.
7. Be careful when customer appears unconcerned about price.
8. Company should maintain a listing of previous bad check
passers; consult list
9. Call bank if amount is over a predetermined amount or
out-of-state.
10. If bank is closed, suggest delivery of merchandise.
11. Do not be pressured into accepting check too fast.
12. Require valid identification.
13. Compare signature and photograph.
14. Record all information on back of check.
3. Acceptable identification
a. Two forms of ID should be required.
b. Legitimate driver's license.
c. Licenses (pistol, and so on), permits or ID cards with
photos.
d. Local Bank Card.
e. Medicare cards for elderly customers who do not have
drivers licenses.
Unacceptable identification includes: social security cards,bankbooks, utility bills, library cards, birth certificates, learners' permits, or membership cards.~ INVESTIGATION OF BAD CHECKSIf a bad check is inadvertently accepted, the following proceduresshould be instituted:
1. Insufficient funds
a. Re deposit and notify maker.
b. If still insufficient, request immediate payment; turn over
to collection agency, or debt recovery service.
c. Final alternative is prosecution.
d. Check with police on local practice and procedure.
2. Closed accounts and forgeries
a. Identify the check passer. This may be difficult or
impossible because the check may have been stolen or the clerk
may not recall the individual
b. police reports and notification to banks, motor vehicle
bureau, credit card companies tend to verify the depositor's
statements in connection with the whereabouts of the check.
c. Interview cashiers to get leads.
d. Publicize current names or aliases being used.
e. Communicate with other retailers and the police.
f. Alert refund departments.
g. Prosecute when absolute identification has been made. ~ CREDIT CARDSLosses due to acceptance of lost or stolen credit cards are on theincrease. Suggested procedures which help cut such losses are:
1. Examine card for authenticity; expiration date. Imprinted
name and signature must match.
2. Use terminal or telephone to obtain authorization.
3. Follow instructions according to code. If "hot card," confiscate
if possible. If above floor limit, may need additional ID.
Customer may be advised "cash only".
4. Be aware that lost or stolen cards issued by out-of-state
banks experience unusual time lag in appearing on "hot list".
5. Examine ID carefully; compare signatures.
6. Be wary of customers who appear unconcerned about price of
merchandise.
7. Watch out for customers in a hurry, particularly at closing time. ~ MISCELLANEOUS CASHIER GUIDELINES In addition to adhering to acceptance procedures with checks andcredit cards, employees who handle sales transactions must beconstantly alert to render efficient service, pay attention toprices, and safeguard the contents of registers. Training andinstructions such as the following should cover potential problems:
1. Know the merchandise; prices; number of pieces.
2. Do not turn away from an open register drawer; keep it closed
between transactions.
3. Do not count the contents of register on the selling floor.
4. Do not leave register unlocked; take the key.
5. If unusual amount of cash has been taken in, request it be
collected.
6. If customer claims to be shortchanged, request assistance.
7. Allow only properly identified persons behind showcases and
counters.
8. Be alert to detect counterfeit bills.
a. Portrait appears lifeless and background lines not distinct.
b. Treasury seal may have uneven points.
c. Border lines are not clear and distinct.
d. May be printed on bond paper without red and blue fibers;
or printed with red and blue lines to resemble fibers.
e. Strip in $10, 20,50, 100.
9. Be alert for till tappers.
a. They create confusion, drop change, start an argument,
divert attention while accomplice steals from register.
b. On any suspicion, close the drawer.
~ REFUND OPERATORSSome shoplifters find it more lucrative to refund stolen goodsthan sell them. Very often items that have been purchased with bad checks are converted into cash this way, especially byprofessionals. Some thieves find it less risky to seek a refundfor stolen merchandise without ever leaving the store. Somepolicies which may be established to combat these practicesfollow:
1. Make refunds payable by check in the mail.
2. Insist on price tickets and sales receipts.
3. Verify merchandise and price in appropriate selling department.
4. Examine documents for alterations or erasures.
5. If purchase was made by check, allow time to clear.
6. Make refunds on credit card purchases through account.
7. Steal an item of merchandise, return same item for a refund without
sales slip. ~ CONCLUSIONShrinkage is an insidious illness which does not cure itself.Proper systems will contribute toward prevention of losses, butthere must be constant follow-up and reevaluation to ensure thatwhat was adequate yesterday is still applicable today. Crime ison the march, and new schemes are constantly being devised.Expertise i loss prevention is as essential in today's retail worldas fashion and salesmanship. The merchant has recognized andaccepted the fact the money spent to protect company assets doesits share in providing profits.
This article was first published on : http://www.pimall.com/NAIS/n.loss.prev.html
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