Shop-lifting under control

CASE STUDY

CVS Caremark is a leading pharmacy and retail health care provider in the US and one of the most proactive practitioners of loss prevention.

CVS, which generates nearly three quarters of its revenue from its pharmacy, has long recognised the need to be proactive.  “There is a dual force to play in retail: the challenge of reaching top line sales numbers and the intense pressure on the bottom line numbers from internal and external theft”, says product protection manager Jon Roberts.

The problem

Internal shrink is always a concern, but a combination of store training and prudent use of technology has kept many employees from making what Roberts terms “Bad Decisions”.

With external theft on the rise, however, a dual focus is business imperative. ‘’Like other retailers we are facing great pressure from organised retail crime,” he says. That activity has spiked over the last four or five years”.

As a result the use of data mining and analytics has increased. “We look at the data coming through and we hold a quarterly training programme on internal and external theft practices.”

Shrink levels vary by stores and location which is why CVS analyses it on a store-by-store basis in order to apply a specific applications.

On the supplier side, CVS works with numerous manufacturers to build programmess that combat the sale of large quantity of stolen merchandise “we let vendors know if they have a high risk product and what they can do to help us, whether its new fixturing, packaging or putting an EAS security tag within the product,” says Roberts.

Expanding EAS programme

CVS relationship with Checkpoint dates to 2004, when the chain installed digital RF EAS systems in all its store, a move that gave it access to state-of-the-art source tagging. More recently, CVS was looking for a way to extend benefits of its EAS programme. As a result, the chain began using Checkpoints Evolve, a new EAS system that focuses on data analytics and merchandise security without compromising the customers shopping experience.

Evolve helps retailers reach what has been described as the next generation of loss prevention. “There is a lot of rich data that can be sliced and diced to make better decisions on a store-by-store basis,” Roberts says.

The benefits

CVS is using intelligent video analysis and testing a different Checkpoint frequency tag in the pharmacy that will enable it to spot suspicious events, identify the times of day when stores are most at risk for shoplifting and differentiate between incoming and outgoing EAS alarms. “I can put this tag on a bottle of medicine and if it goes through the front gates there is silent alarm that triggers a data point,” Roberts says. “ This allows me to see it in the data. Then I can go back in time and look at the CCTV system in the store to see what happed.”

This has been enhanced by the closed circuit system’s remote capability that enables investigations to be performed at a distance. “It’s way more efficient because it cuts down on ‘windshield time’”, he says. People no longer have to be in the stores to collect data. It’s a real revaluation; we are seeing a ton of benefits.

Although India tops the chart in shrinkage, the percentage has been reduced from 3.2 per cent in 2009 to 2.72 per cent in 2010 due to a considerable spend in loss prevention measures. The security spending in India has increased from 0.19 per cent to 0.23 per cent. Although this percentage is lower than the global average, yet it’s increased considerable as compared to 2009. In India retailers have also started taking measures in controlling shrinkage, as every theft is a direct loss in the net profit of the retailer.

Dharmesh J Lamba, General Manager, Customer Management, South Asia, Checkpoint

There is a lot of rich data that can be sliced and diced to make better decisions on a store-by-store basis.

Jon Roberts, Product Protection Manager, CVS Caremark