Accurately estimating ‘shrink’ (the net margin eroded by waste, theft and spoilage) across a retailer’s news and magazines category is very difficult. What is indisputable though, is that shrink costs retailers millions of pounds every year. But there is a way to minimise its effect without having to pay for and manage lots of expensive, complex and time-consuming processes.
Here, Peter Kemble, MD of rascal systems, explains their approach to managing shrink – and how the company’s automated mobile-based technology is helping some of their customers reduce shrink by up to 65%.
The first question to ask is how big is the shrink problem and what’s behind it? “It’s a hard one to quantify” explains, Peter, “But in our experience, in a well-run retailer with a dedicated resource, it’s usually over 5% – and in the convenience format it’s generally considerably higher. Every retail category has some shrink, but newspapers and magazines especially so, because it’s the fastest moving (newspapers 1 day shelf life). The fact that late editions go to print about 10pm and are on the shelves early the next morning is pretty impressive.”
So it’s the quick turnaround, manual processes, and sheer number of titles that create more opportunities for shrink? “Exactly. Errors often occur during goods-in as lots of products look and feel similar. Plus, stock delivered to store is often left unsecured, and checked by shop staff, rather than being managed through retailers’ centrally controlled and managed networks.”