Last week the Profitect team was in Dallas, Texas for the annual NRF Protect conference held at the Gaylord Texan. The focus of this year’s event, one of the premiers in the retail industry for asset protection (AP) and loss prevention (LP) professionals, was technology. There were significant discussions on how it can be leveraged not only to address standard issues for AP/LP professionals, such as shrink, but also how it can and should be used to drive sales and margin improvement. The team and I always enjoy connecting with customers and other asset protection professionals at these events and learning more about the challenges they’re facing — and, of course, how prescriptive analytics can help solve them.
One of the highlights of the show, and something we do consistently at conferences, was present on stage with one of our customers. This time, Profitect CEO Guy Yehiav led a session on the modern and progressive AP profession, featuring insights from Jim Mires, VP of Loss Prevention and safety at Sally Beauty. In the session, titled “New Winning Combination: LP & Finance,” Guy and Jim discussed how LP at Sally Beauty evolved to the point where it’s no longer simply focused on catching the “bad guy.”
As the title suggested, the presentation itself covered the importance of a strong relationship between finance and loss prevention. The pressure to increase shareholder value and reduce costs while accomplishing more with less, is something that goes across all business functions. While shrink control is the primary focus, continued compression in SG&A costs are impacting other cost centers. The important thing to remember is that while total retail losses may not be sexy, the impact is getting bigger and bigger and having an effect on bottom line results. Armed with advanced tools like prescriptive analytics, finance and operations departments can begin to leverage unbiased insights in their data for prescriptive actions that will deliver results.
In the case of Sally Beauty, Profitect’s prescriptive analytics solution has helped to cut out the mountains of reports that had to be interpreted by people to identify potential losses, even when there were none. Now the technology identifies trends that cause losses — for example, if a business is consistently opening late or closing early. Asset Protection powered by prescriptive analytics helps business leaders go beyond the basics of malicious internal and external theft and become more strategic to the business on how to improve the overall bottom line, Yehiav and Mires said.
Mires stressed the importance of LP/AP working cross-functionally with other areas of the business. He used the example of a job opening on his team, which he is trying to fill internally. Interestingly, Mires’ ideal candidate does not necessarily have a background in LP/AP, but instead he is seeking an individual with a strong focus on finance and operations. Even bolder, the person will sit in the operations area of the business — not loss prevention — to promote integration into spontaneous conversations and decision-making in meetings. This individual will focus on reducing operational shrink across all departments, including inventory control and merchants for a long-term solve and root cause analysis.
This approach will help Sally Beauty develop and implement a proactive and predictive risk approach that combines early identification of significant loss risks with a proactive mitigation and ongoing inventory audit. Jim concluded his session with a quote that resonated across the packed room: “Today the people in loss prevention need to have skills in finance, inventory control, accounting. They really need to understand the retail operation thoroughly.”
Another highlight of the conference for us was the opportunity to recognize one of our most valuable employees, and current Vice President of Business Development, Fran Clark. Fran celebrates his 60th year in retail this year and we were honored to recognize him with a Lifetime Achievement in Retail Award. Check out this video clip here to see the award ceremony!
All in all, it was another phenomenal NRF Protect for Profitect with great networking, education, time spent with our customer community, and lots of interest from the industry in our solutions. It also caps off a very busy conference season for us. Next big one on the agenda will be our User Conference, Profitect PACT 2018. We hope to see many of you there!