2. Reducing Shrink on Hot Products
A Shared Responsibility
ECR Workshop
Brussels, 18th May 2010
3. Table of Contents
• Shrink Approach Step by Step
• Data Analysis
• Hot Products
• Supplier Involvement
• Win Win
• Results
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4. AS Watson Shrink Reduction
Starting point >> ECR Roadmap
* All activities cataloged
Map * Process planned
* One single definition for shrink
Measure
Analyze * Stores and products identified and prioritized
Develop
* Short – Mid and Long term Solutions identified
Solutions * Exchange of beste practices
* Solutions implemented by interdisciplinary teams
Implement * All costs and benefits tracked
* Results evaluated for succes
Evaluation
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5. Step 1
Management
Commitment
Step 5
Step 2
Toolkit Supply Chain
per Analysis
Formula
Shrink Reduction
Process
Step 4 Step 3
Shrink Data
Staff Analysis
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6. Step 2
SUPPLY CHAIN ANALYSIS
To reduce shrinkage you need to know what to do and where.
Analysis of the Supply Chain is key in this to identify all Shrink Risks from Manufacturer to
Customer.
To find these RISKS all processes were analysed:
- Transport
- Logistics
- Store Operations
- Finance
Next we decided what to improve on the short-, mid- and long term with regard to:
Staff - Stores - Logistics - Products - Information
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7. Information Staff
Shrink Reduction
Process
Product Stores
Logistics
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8. Step 3
ANALYSIS of SHRINK DATA
This was key in taking the right decisions, prioritising activities and have
quick wins which show the effectiveness of all of this.
- defining the “Hot Stores”
- defining and protecting “Hot Products”
- reducing stock
- discussions with suppliers
- making the right decisions
- investing in equipment
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9. HOT STORES
Defining the “HOT STORES”
- Loss making
- High Shrink
- High Stock
- Red - Amber - Green criteria
- Assortment
- Displays / Promotions
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10. HOT PRODUCTS
Defining the “HOT PRODUCTS”
- By reason, store, supplier
- By category, reporting- and familygroup and by product
- High Shrink (not only % but also value)
- Reduction per facing / reference
- Assortment in Red stores
- No Displays with Hot Products in Red stores
- Orderpicking in secured area DC
- Protected in secured totes
- Received and counted in stores
- Stored in secured area
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11. SUPPLIER INVOLVEMENT
Discussions with our “hot” suppliers:
- Cosmetics
- Skin Care
- Health Care
• Source tagging
• Blister pack
• Wrap and tag
• Reducing stock in presentations
• Displays / Promotions
• Funding tools
• Shrinkage fee
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12. JOINT RESPONSIBILITY
• Patently shrink reduction is only possible by a collective
approach (manufacturer/supplier - retailer) and handled as a
joint problem.
• Patently shrink reduction is only possible by taking more
initiatives at the same time (tagging, packaging, training staff,
installing CCTV, incentives shop managers, stock reduction
(shelves / stockroom), clear shoppolicy, follow up shoplifting,
etc.)
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13. JOINT RESPONSIBILITY
• “Map & Measure” to measure results (improvements, succes)
• “Map & Measure”. As discussed earlier it is important to know
what your “hot products” are.
Not always because of price but because of marketability (theft sensability)
Detailed analysis is key to avoid focussing on the wrong products.
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14. L’OREAL / MAYBELLINE
Together with L’Oreal we discussed reduction of shrink in
our Cosmetics and Skin Care products:
- L’Oreal
- Maybelline
- Garnier
- Dermo Expertise
• Protection of Mascara’s in blisterpack
• Protection of Cosmetics > €. 9,95
• Wrap and tag
• Sourcetagging
• Limited stock in presentations
• Displays / Promotions
• Funding tools
• Shrinkage fee
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