Historically, loss prevention in any organization is seen as a source of spending. There seems to always be the need for new cameras, alarms or other equipment.
But a case study prepared by Harvard University Business School revealed that Circle K (formerly Mac’s Convenience Stores) in Canada was able to increase average sales by $62,371 per store, above and beyond the average annual sales increase of roughly $30,000 per store, at locations where one of the company’s community-based initiatives, a mural program called StreetART, was put into action.
Under StreetART and other programs developed by Sean Sportun, manager of security and loss prevention for Circle K—Central Canada, in-store robberies fell by 49% between the fiscal years 2007 and 2017 and associated losses by 90% from $117,467 Canadian dollars to $11,538. Incidents of robbery and other crimes decreased from 184 to 93 over that same period.
When a robbery occurs, an even greater expense than the loss of products and/or cash is the $100,000 average cost to the company’s worker’s compensation premiums for each employee who takes a leave of absence due to trauma.
“To determine how much our crime prevention programs have saved our company so far, just take the number of crimes reduced and multiply it by $100,000,” Sportun said. “That promotes a clearer understanding about how security has impacted the bottom line.”
Getting the community involved to keep their neighborhoods and the stores in them safer is a priority for Circle K. Since 2012, the company has been posting robbery suspects’ photos and videos captured by the in-store closed-circuit (CCTV) surveillance systems to Facebook, Twitter and YouTube as well as on television screens in the stores. Anyone with information about the event and/or perpetrators is encouraged to call Crime Stoppers.
Tipsters are offered a reward through Circle K.
By 2017, the program, labeled Circle K Crime Busters, had posted 609 robbery and other criminal incidents with 531 arrests made, 538 cases cleared and paid out $8,075. (Only 17-22% collect their rewards, giving the program an even higher return on investment, Sportun pointed out.)
“We paid $6.57 to catch a bad guy,” said Sportun.
Not one to be boxed in by convention, Sportun took what was once an unsightly and expensive activity—graffiti—and turned it into a bonding situation for Circle K, its neighborhood stores and the surrounding community.
“We wanted to create works of art specific to the neighborhood with images such as local landmarks and other representations of the community that could be sources of pride to residents there,” he said.
And the strategy is working. Since the first mural was painted in 2012 all the stores that have them have significantly reduced or even eliminated criminal activity, including one store that had been experiencing robberies at least once a month.
Currently there are 22 murals and the company has plans for another six to 10 this summer. Harvard Business School was so impressed with the project that it provided a $60,000 grant to continue the work. Depending on the size of the walls, the murals cost about $2,500 to $4,000 each, but it is a significant savings over the $5,000 the chain had spent annually to paint over vandals’ graffiti.
After the same burglar broke into one of his Birmingham, Ala. Quick Shop convenience stores for the third time, David Collins, president of DC Oil Co., which owns and operates Quick Shop, knew he would have to search beyond traditional security measures to keep tenacious intruders out. One fix was to install a roll-down wire mesh door inside the store to discourage smashing the glass to gain entrance at night.
To solve this problem, Collins’s company also installed a motion-sensitive camera that automatically sends a text about any suspicious behavior to the store supervisor, who can then monitor the back-door area on a video live-stream via smart phone.
At the same time, the equipment uses a silent alarm to alert the local police about the presence of the would-be thieves.
“Once a thief has broken into the store, it takes him tops two minutes to clean it out of the cigarettes that have the highest street value, so the silent alarm sent by the motion-detector camera buys a little time by alerting the police before the break-in,” he said.
It also helped the supervisor to identify the multiple break-in suspect by the very distinctive, brightly-colored tennis shoes he wore when he broke in as well as when he visited the store as a “customer” during the day.
On the front of a troubled store with only one entrance/exit, Collins installed a Tag Camera, which can provide a broad view or zoom in with the sensitivity to read everything on a license plate.
“I can see numbers and every other detail on the plate and identify the face of a person in any car that enters or exits the store location,” he said.
Inside two of his stores he added cameras that offer 360-degree views of their surroundings to cut down the number of cameras needed to view certain areas.
TO THE RESCUE
New technology such as artificial intelligence can identify potential problems before they occur or escalate and alert corporate security and law enforcement, said Lisa LaBruno, senior vice president of retail operations for the Retail Leaders Association (RILA). One new tool can detect people wearing masks or brandishing or concealing weapons and report them to corporate security and local law enforcement before they come into the store. Enhanced recognition capabilities on cameras make it easier to identify people who commit theft.
Other technologies can help reduce shrink by immediately tracking and reporting unusually high activity and removal of products from shelves, she said. The original function of this technology is to control inventory by monitoring on-shelf availability of products, preventing out-of-stocks. By working together with retail asset protection executives, tech companies can find out how to fully leverage and enhance their technology to make it more valuable to retailers.