Why Communication is the Best Strategy for Retail Loss Prevention

When it comes to retail loss prevention techniques, experts recommend tips for identifying shoplifters, strengthening security, and stopping people in their tracks before they become thieves. However, the best loss prevention strategy you can implement needs to come from a higher level. It places the focus on managers and their relationship with employees, rather than employees and their interactions with shoplifters.


In 2017…

  • Inventory shrink cost the US brick-and-mortar retail industry $48.9 billion
  • Retail loss from administrative and paperwork errors grew from 16.5% in 2015 to 21.3%
  • The greatest contributors of inventory shrinkage were shoplifting (36.5%) and employee theft (30%)
  • 75% of employees stole from their employer at least once
  • 5% of companies used an anonymous telephone hotline as their loss prevention awareness program, followed by 88.9% using a code of conduct and 81% using bulletin board notices


A Culture of Communication

In many companies, senior management aren’t thought of as the front line in terms of being able to prevent retail loss. They’re seeing the numbers and understanding what the shrinkage is and how it is happening, but they aren’t involved in the why. This is why a successful retail loss prevention strategy needs to start at the top, connecting senior management with the human resources, communications and operations departments, all the way to individual retail managers and employees.

Involving management is essential because they’re the decision makers for beginning new policies and procedures, and their actions are often representative of the company’s overall culture. As younger generations continue entering the workforce, they’re calling for a bigger emphasis on company culture than ever before. When team members feel that their voices aren’t being heard by management or their company doesn’t value open communication, they’re less likely to protect the bottom line, leading to mishaps in administration, negligence with storefront security, and even employee theft.

Closed, detached communication and poor management lead to low morale within employees. Combined with a lack of consequences, employees feel like they can rectify their unhappiness by taking from the company or refusing to carry out daily responsibilities. They no longer feel a shared connection with their company, and believe that theft or negligence will actually be a greater benefit to them than their jobs. This is where the importance of a thriving, encouraging work culture comes into play. In terms of embedding consequences into a loss prevention strategy, it’s always beneficial to enforce boundaries with employees and continue to hold them accountable. However, it can be even more effective to focus on the positive side of employees actively participating in loss prevention. For instance, some companies have incentivized their strategies by offering employees a share of the savings received from less shrinkage each month.

To create a thriving culture, you need to provide your employees with a higher purpose beyond their day-to-day work. Southwest Airlines is a great example in how they’ve developed a higher purpose for their employees and successfully communicated it to them through a variety of platforms. After being given the higher purpose of “connecting people to what’s important in their lives,” employees are reminded of their broad impact through internal, inspirational videos showing the differences made in customers’ lives. This gives their employees something positive to work toward, as well as a shared value with their company that will motivate them to protect the brand name and its assets.

Digital Efforts

According to the National Retail Federation, a majority of surveyed companies used an anonymous telephone hotline as their loss prevention awareness program, while only about half of those surveyed used training videos, email notifications, and web-based communications. In reality, more and more employees prefer digital forms of internal communication or even require it if they’re working remotely. These methods can come in the form of video, social media, and established discussion forums.


Tell Stories Through Video

When Best Buy decided to re-brand itself in order to keep up with its continually changing landscape, it used its own employees as the stars of its advertising campaign, which showcased real conversations with customers. Video can be an especially powerful tool for storytelling because it brings communication down to a more personal level that employees can resonate with. After placing employees at the center of a brand’s storytelling, others are motivated to do better work and are educated on how they can do so.


Use Social Media at Work

More and more companies are also realizing the power of internal social media as a digital communications effort. Using social media at work may seem counterintuitive, but employees are actually 20-25% more productive when they’re connected with other team members. Internal social media could be in the form of Facebook groups, LinkedIn groups, a Slack channel, chat services, or a company blog, among others. Within each of these platforms, employees are given the opportunity to collaborate and freely ask questions. The main value is that they’re usually already comfortable with these platforms, so they’re more compelled to share what they’re working on as well as the difficulties they might be having.


Social media can also be a fun tool for boosting morale if employees are featured on company accounts and asked to send in their own content in order to be featured. This practice tells employees that they’re celebrated, and it creates a sense of tribalism within employees’ ability to showcase their work life to the world.


Designate Online Spaces for Feedback

If you are among the 90.5% of companies using a phone hotline as a loss prevention program, we aren’t suggesting you remove it. However, you should also consider incorporating digital avenues for your employees to use when it comes to talking about loss prevention and holding them accountable. Within a dedicated forum, managers and executives can share with their employees in a real-time, easy-to-use method by asking questions and delivering insight. Employers will then have the opportunity to answer questions and provide feedback, whether it’s anonymous or not.

This method gives managers a way to directly speak with their employees at once in an industry where that it isn’t always easy to do. Furthermore, employees can become part of a continued loss prevention conversation instead of a learning about it in a single training touch point. By creating a designated space for open, possibly anonymous, communication, managers will even be able to uncover the psychology behind their team’s attitudes and beliefs behind loss prevention and ask for feedback on better practices that employees would like to follow.


Print Efforts

Although digital efforts continue to grow in the variety of ways to communicate with employees, print materials are still one of the easiest ways to deliver a message to employees, especially if your employees are spread across many locations. By making a concerted effort toward emotionally connecting to your employees through the images and copy that you use, you can ensure your messages will be received and valued rather than ignored or misunderstood.

Let Your Employees Be the Stars

Both Southwest and Best Buy offer great examples of using video to communicate with employees, but another great takeaway from their efforts is the impact in using real employees as models and subjects. This same principle should be used within print efforts. Not only are images with people more likely to elicit an emotional response in a flyer or poster, but imagine how much more compelling the image is when it’s a friend or coworker.

Incorporate Your Brand and Culture

Just because a flyer or poster is meant for employees, it doesn’t mean you can forget all the branding you’ve carefully developed and cultivated for your company. Purely informational documents and pamphlets will go right over your employees’ heads if they aren’t compelling, just like they would with a customer.

If you’re trying to deliver a large of amount of information in one step, why not create an infographic poster or pamphlet with instructional images. The imagery you choose should also be reminiscent of your company and brand. For instance, if you own a fashion brand, your internal posters could take on an editorial design similar to what you would see in a fashion magazine. Through incorporating your branding, you’re letting your employees know that they matter just as much as the customers, and they’ll feel connected with rather than spoken to.

Don’t Forget About Demographics

In any retail company, employee demographics usually include a variety of ages, backgrounds and lifestyles. When developing your print material for employees, remember to take this into consideration so you don’t forget who you’re talking to. Your storefront employees shouldn’t have to dissect informational material for corporate jargon, and they also shouldn’t feel like they’re being alienated. The language you use shouldn’t favor any one type of employee more than the others, so you should hit a happy medium with easy-to-understand, yet exciting copy and images.


Statistics on inventory shrinkage can be an alarming reality for retail companies. Even though a majority of loss comes from shoplifting and external errors, nearly 50% is caused by the people inside an organization, which includes employee theft and administrative errors.

While most loss prevention strategies focus on heightened security and methods to prevent shoplifting, a comprehensive loss prevention strategy should also focus on open and valuable communication with employees. By reaching employees through a variety of touch points both in person and online, team members will feel a shared connection with their company and a higher sense of purpose. They’re encouraged to do their jobs to the best of their ability, and they’ll no longer feel a disconnect with the company and its assets.

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