Classic British clothing brandJaegeris to roll out a loss prevention programme based
ondata miningto cut theft and fraud by
a fifth and boost its profit margins by 2%.
Steve Hearn, head of risk and business continuity at the
122-year-old business, said an exhaustive analysis had revealed the
company had been focusing its loss prevention strategy on the wrong
things.
"We were spending four times as much on garment tagging as on
all the other areas, but shoplifting was only 30% of the problem,"
he said.
The analysis estimated that internal theft accounted for 42% of
losses, poor processes for 21%, and suppliers for 7%.
Jaeger's new loss prevention programme aims to change managers'
behaviour by giving them the data they need to take action.
Jaeger went to UK loss prevention specialist
Oris, which has a
strategic partnership with product identity and shrink management
company Checkpoint
Systems. Oris also supplied
IDM Systems'
Oracle-based LossManager data mining application.
Data from its electronic point of sale system lets Jaeger
identify the source of losses, integrate information from other
applications such as
RFID and CCTV, monitor investigations, and provide action
alerts for managers.
"From data mining we knew that 84% of goods stolen were taken
from near doors, despite 70% of our [more than 120] stores having
tagging," Hearn said.
This prompted Jaeger to install very high-resolution CCTV
cameras so that it could pass good images of shoplifters on to
police. The company was able to stop tagging clothes altogether in
favour to pursuing convictions and recovering goods.
Once the application goes live this month, Hearn plans to make
the data mining facility available to other parts of the business.
These include time and attendance, buying and logistics, and sales
and marketing.
Stores run by managers who had been through "shrinkschool" were
consistently more profitable and suffered fewer losses, Hearn said.
"Already we can see that company-wide sales are up 200% but the
value of losses has stayed level," he said.