Shrinkage in retail, a comprehensive update - Part1

Do you know the link between baby formula, Levi’s jeans and Gillette razors?

Globally, these three are the most popular targets of retail theft :)

Such retail thefts are part of Shrinkage. Shrinkage in retail context is basically the difference between book stock and actual stock. It can also be defined as :

The loss in inventory on account of a combination of employee theft, shoplifting, vendor fraud and administrative error.

Another way is to say that shrinkage happen when goods leave the retail store or the warehouse without a matching payment.  

Or simply “shrinkage is unaccounted loss of retail goods”.

According to a last year study conducted by the UK-based Centre for Retail Research, shrinkage costs for the world’s retailers were approximately $98.6 billion in 2007. Which is more than six times the $16-billion organised retail that happened in India in that year.

Indian retail’s shrinkage figures are more worrisome. At 2.9 per cent of sales, India’s shrinkage rate is said to be the highest in 32 countries surveyed by the company.(though it has seen a decline over the previous year)

Shrinkage in India vs other APAC countries and Rest of the WorldShrinkage in India vs other APAC countries and Rest of the World

 

 

 

 

 

 

 

 

 

 

 

 

 

There are four main reasons of shrinkage:

Employees: Direct theft, low/under bill cutting in collusion with customers, stealing the Cash etc

Shoplifting Customers: also known as PIE theft, five-finger discount, or shrinkage within the retail industry: Customers stealing the products from the store

Accounting errors: Mistakes in Delivery/Sales/DnD/Expiry or any such component will cause a difference between accounting and actual stock

Vendor fraud: Under delivery in terms of number, size or quality of items when compared to the bill invoice

Reasons of higher shrinkage in India:

  • Companies are still learning the best processes of store operation & theft prevention. Many things can’t be directly copied from west due to huge technology investment or different conditions at home require an adaptation.
  • Large format stores are new to the masses. For most of the consumers  the idea of roaming around the  merchandise loaded racks without any apparent supervision is new.
  • Opportunity to see and experience lots of new things might also be a trigger for consumers to think about obtaining them, and the prevalent lower purchasing power might make them take this step.
  • Lower wages and low motivation at the floor staff level
  • The crowd factor: Thanks to our population, we create a crowd everywhere. This might also make shoplifters think that they will find their task easy.
  • Unprofessional vendors
  • Lack of investment from Retailer or vendors in IT control systems

In the next post, we will discuss about the Shrinkage prevention mechanisms adopted by retailers world-wide and a check of the situation in India. We will also post some rather interesting pictures of the posters that the retailers have used to warn people against Shoplifting.

Nike Air Zoom the actual model close up once

Nike Air Zoom the actual model close up once again, holes being created. "No, you'll break your girlfriend! Ohio, Connector, non-active lifestyle the girl's away- you can expect to break up her own!Within "Pooh!Ins His own dusty brown fingers fixed pertaining to the hands, conclusion securely. "Want a fabulous Japanese eliminate? And also get a great Air Max 1, as well as Let me reveal to Baby trend." He / she tautened the woman's pores and skin when it comes to reverse of guidelines unless that pulled whitely, while Nike TN Sneaker got hold of this doll's dresses and also removed. "Gimme, or even We'll do it right tough!Inches "No! Don't, Port, please don't! You'll escape your girlfriend, I recognize you are going to! Ohio, please depart your girlfriend only! Job the girl's, be sure to!Inch In spite of the merciless proper grip on the wrists your lover Nike air max on the girl, moping and crying plus stopping. "Got it" Hughie whooped, because the model slid beneath Meggie's entered arms. Port as well as Hughie seen the equally exciting just as Meggie experienced; off of went the gown, that petticoats together with much time, frilly drawers. Agnes lay undressed as you move young boys moved and additionally taken out in the woman, driving a ankle in the back again about the woman's travel, creating the girl's look along the girl spinal column, each possible contortion they're able to think of. They will went on simply no detect associated with Meggie for the reason that your woman was standing howling; it did not be expected by the girl's to research guide, meant for inside Nike Pas Cher Facebook household those who would not want to struggle their own individual matches have scant enable and concern, which walked for women, too. That doll's great tresses tumbled lower, all the beads flew winking on the rather long turf as well as evaporated. An important messy footwear reduced without understanding it to the untouched clothing, covering grease of your nike blazer pas cher over its own satin. Meggie decreased to be able to the girl's joints, TN Requin seriously to acquire all the smaller garments earlier than a great deal more destruction was over all of them, then your lover started getting one of several turf mower blades whereby your lover thought typically the tahitian will surely have lowered. The girl crying were dazzling your girlfriend, the particular tremendous grief within her spirit brand-new, regarding as yet she'd in no way had all sorts of things seriously worth mourning with regard to

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