Friday, December 27, 2013

4 Easy Ways To Reduce Retail Inventory Shrinkage

Retail inventory shrinkage is defined as the loss of product between the manufacturer/supplier and the point of sale. Retail stores must acknowledge, track and deal with shrinkage to prevent it from cutting into their profits. Allowing it to grow out of control can dampen a store's profits. In fact, many stores have been forced to close their doors in the past due to high shrinkage. To prevent this from happening to YOUR store, check out the 5 tips listed below on how to reduce retail inventory shrinkage.

#1) Display Products Correctly

Ever notice a product tucked deep behind or underneath a shelving unit in your store? Whether it's a perishable food product or not, allowing it to sit in the dusty, dirty area behind a shelving unit will ruin an otherwise perfect product; thus, contributing to your store's inventory shrinkage. Owners can protect themselves against instances such as this by displaying product on premium gondola shelves, gridwall, slatwall, rolling racks, etc. Taking the time to display your store's products correctly will naturally reduce inventory shrinkage.

#2) Shoplifting

It's not something most retail businesses want to think about, but shoplifting is a serious concern that can greatly eat into your profits. And since it technically occurs between the manufacturer/supplier and the point of sale, it's part of shrinkage. Each year, U.S. businesses lose billions of dollars from shoplifting, which is why it's important to take preventive measures in your store. Installing security cameras, dye tags, alarms and security mirrors are just a few measures which are sure to help reduce theft.

#3) Employee Theft

Theft doesn't occur only from customers; unfortunately, employees statistically steal more product that customers. Each time an employee steals an item, it adds to your store's shrinkage. Even small items and products gradually build up to create a financial burden for retail stores.

So, what steps can retail stores take to reduce the chance of employee theft? The first line of defense is to hire trustworthy, reputable, experienced employees to run your store. I'm sure this is common sense to most people, but you shouldn't hire employees whom you don't trust. Owners can also install video monitoring systems in their storage rooms to prevent theft.

#4) Move Perishables Fast

One of the most common contributing factors of retail inventory shrinkage is from spoiled perishables. If your store sells perishable food and/or beverages, make sure your employees are trained to move it as fast as possible. Don't just place it in some obscure part of your store where customers can't easily find it, but instead keep it out in the open with signs, banners or other promotional material drawing attention to it.

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