My Retail Musings


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Thoughts and Stories Around My Retail Career

Contributor: Jim Kearney

On this page I will reminisce, about things that have happened in my career in retail. It may be boring, mildly interesting or pure genius. My bet is one of the two former rather than the latter.

The Great Ping Pong Ball Drop

7/15/2018

In the early 70's I was in a Management Training Program with W.T. Grants. My first assignment was at the Ridgemont Plaza Store in Rochester, NY. I had, by this time, worked my way out of the stock room to the sales floor.

The management of the store, at the time, had hired a local radio station to help promote a big summer sale. As a finale to the event the radio station would, from its helicopter, drop hundreds of ping pong balls onto our parking lot. It was advertized that several large prizes with several smaller but useful prizes would be awarded and that could be claimed by matching the number printed on each ball with the corresponding prize. (There were also a lot of balls with the same, let's call it a, consolation prize number. We had a budget for the event!)

On the day of the drop the promotion was working very well. The traffic had been building in the store in the hours leading up to the drop and sales were up.

At the appointed time the announcement was made for everyone to join those already gathered in the parking lot.

The helicopter arrived on schedule. (It was one of those bubble canopy type helicopters. So it was easy for everyone to see the pilot and the passenger preparing for the drop.) I could see the passenger pull to the door a large burlap bag.

I noticed that the helicopter seemed to be a little high but this was my first such event and I figured that everyone knew what they were doing. (A word to the wise - don't ever assume that!)

As the bag was emptied the prop wash did some scattering of the balls. That seemed to make sense. After all it would be a free-for-all if they had all landed in the same general location.

Very quickly, that thought was replaced by a bigger concern - out right panic as a gust of wind began to carry the ping pong balls towards a four lane highway next to the parking lot.

It seemed like the balls were floating in slow motion while being chased by a mob bent on capturing the prized white round objects. While, at the same time, seemingly oblivious to the fact that they were running head long on to a busy highway with moving objects that could injure or kill them.

I cannot explain it to this day but mercifully there were no injuries or fender benders. My guess is that, because there were no trees or buildings between the parking lot and the road, there was a clear line of site for the drivers. They could see the hundreds of folks charging towards them right after the cars were pelted by object falling from the sky. So it would seem the collective response was to slow down and try and figure out what the heck was going on!

I heard screeching breaks, that's it, mainly because I had my eyes closed at the time.

That promotion was never repeated at that store.



The Great Tower of Shrinkage

07/26/2018

Prologue: Inventory shrinkage has been responsible for many retail store failures. Simply stated it is the reduction of inventory not due to sales. Most shrinkage that occurs in stores come from theft; both internal and external.

Some inventory shrinkage is common in most stores for various reasons. Theft is the big one but clerical errors, failure to record item markdowns or damaged goods are the other most common causes.

The result is whenever store reconciles its inventory, usually once a year, the shrinkage amount is deducted from the balance sheet resulting in a loss of assets. It is not only charged against any profits earned but the items represented by the difference in the inventory book value and the actual on hand amount, or lack thereof, means the store no longer has those items to sell; impacting future potential sales.

Of course all retail managers do their best to manage their shrinkage loss as much as possible.

In 1974, As a first time store manager, I was challenged to limit a historically high shrinkage store to under 1% shrinkage. After my first full year, I was able to report to my district office that we had achieved that goal.

No good deed goes unpunished. It was a year later that I was transferred from my fun-to-run 10,000 square foot downtown location to a 95,000 Square foot anchor store in a mall as the Operations Manager.

In stores that large there was a general manager who was responsible for the store. Then, under the GM, there was an operations manager and merchandise manager. Both of whom had usually managed a smaller store. This assignment, if managed successfully, would be a stepping stone to a GM position. The two position titles, operations and merchandise, described fairly well the divided responsibilities of running the store.

The office, human resource, security, four bay automotive center along with the 120 seat restaurant all fell under my area of responsibility. That also meant that the store's very scary 4% shrinkage rate was my responsibility also!

The margins in retail stores are very small. Stores rely on volume to make the store profitable. Any store with a 4% annual shrinkage rate is doomed to fail. Most store's cost of doing business just can't handle that kind of loss.

This is the story of the steps I took to try and stem the inventory leaks in a monster store. The topper was a tower. A tower and the stories involved with its birth and its results stay with me to this day. Over the years I have shared these stories with those attending management workshops / seminars I was charged to conduct around the country.


The Mall
VS The Store
08/10/2018

The Mall: It was a small mall by today's standards. We were a 95,000 square foot anchor. There was a small bank, about 10 various small retail stores and on the other end of the mall was a good sized farm and home type store.

The Store: What I remember most was my shocking realization of serious problem when I first entered the location. The front and main entrance from the parking lot had 10 plus checkouts. A potential problem but not the immediate problem.

The real problem was the opening to and from the mall. It was as big as the mall corridor itself with two checkouts. In most malls today the entrance to the large anchor stores is purposely designed to look separate from the mall common area.

It did not take me long to figure out that many customers would exit to the mall, with their unpaid items in a shopping cart, without even realizing that they had left the store!

Some would come back and pay for their items and some would take advantage of the situation and continue on their merry way! I'm sure that in some circles the knowledge of this very easy store exit allowed for some premeditated theft , while at the same time, plausible deniability, "oh I'm out of the store?", if they were challenged.

4% shrinkage? I had to be thinking," why so low"! And, How in the ... do I fix this!

Problem Number One - Close the Gaping Hole!

This was the most looming and most obvious problem. The ability for anyone to leave the store knowingly or unknowingly with a shopping cart containing unpaid items had to be fixed.

In consultation with the general manager and maintenance we designed a line of metal handrail stanchions mounted to the cement floor. The purpose was to guide the customer traffic to the checkouts and leave one opening for casual or pass through traffic. The casual opening was wide enough to allow any one person through but not wide enough to allow a person with a cart to pass through.

I was not under any allusion that installing the stanchions was the total answer to the store's shrinkage problem. I was right. It was a small step in what would be multiple serious shrinkage problems.

  • Too Many Ways to Leave the Store

  • Poor Record Keeping

  • External Theft

  • Internal Theft - This One Broke My Heart

 

The Tower!

I search all over the store for a vantage point where I could post, during busy times, one of the two full time security guards I had just hired. The other was to roam the sales floor helping customers and just being visible. They were both purposely uniformed.

They were both instructed NOT to stalk the customers. My whole approach centered around them being a deterrent rather than confrontational.

Times, back in the early 70's, were not as litigious as they are today. I don't recall even being concerned about that aspect of the business. I was more concerned about upsetting the good customer. Losing loyal customers over a perception by them being under suspicion would be as bad if not worse than the theft problem.

The basic plan was for one guard to view the sales floor and guide his partner to areas were there seemed to be suspicious activity or an actual theft in progress.

But what observation position would offer the best view of the store?

I first looked at the perimeter of the store. The stock room wall seemed to offer the best potential. The ceiling on the sales floor and the stock room were a little over 20 feet tall. I toyed with the idea of building a deck or walkway along the wall adjacent to the sales floor with an opening every so many feet. The estimates for such a project, while potentially workable, was far too expensive; especially given the stores profitability problems.

No, if this was going to be done it would have to be on a shoestring budget. It was hard enough to get the security guards on the payroll.

One day, while on my way to the store's restaurant, I walked through the Men's Department. The dressing rooms caught my eye. They were not partition dressing rooms that one sometimes see. These were stud framed sheetrock, albeit very small, rooms. That's it! The first level of a my security tower!

The Original Idea

It seemed straight forward and simple enough. Take one of the men's dressing rooms, build a second story with one way glass on all sides. The location was in the center of the store from side to side and a little forward front to back. It would offer a good observation point to the most vulnerable departments.

There was just one little problem. The men's department manager was vehemently against the idea. Not because it was a bad plan but because it would take away one dressing room which she said we could not afford to lose.

We got around her concerns by modifying the tower to have a hatch and the ladder that could be pulled up and the hatch closed allowing for its use. Plus she agreed to use that dressing room only when absolutely needed

Construction of The Tower

First the shopping list:

  • 2 x 4's, sheetrock and needed hardware.
  • One way glass for the four sides of the tower. We were able to obtain that from a local glass dealer cut to size.
  • Electrical supplies - ceiling light fixture, electrical wire, light switch and telephone wire.
  • Miscellaneous - Binoculars, walkie talkie, telephone and a ladder.

I'm sure there was a lot more but that covered the essentials to do the job.

The framing was quick as I recall. I remember the first thing was to put a plywood ceiling that would be the tower floor. With a little cutting and some hinges we had our hatch. The wall reached the store ceiling struts. I'm sure the builders secured the new upper frame to those.

It only took a couple of days and the job was done. I was very pleased. I noticed some customers stopping and looking during the construction. After, the tower was painted the same as the store, no stopping and looking.

That bothered me a little because part of the tower's job was to deter potential shoplifters. But, after all, I was looking at the 90 plus percent of our customers who could care less about that big tall thing; whatever it was. My target was the thief and I was sure that they would take notice!

It's time for a dry run and who else to take it out and run it around the block but the man with the idea.

That is when I first found out that one way glass is only one way if there are no lights on inside the tower. Not a real problem. There was some ambient light showing though which seemed to be enough on its own. I found that fact Interesting.

Then, that same day, there was my most embracing moment at that store! ...

Going Operational

Did I need to be the first one in the tower and try it out? Of course! 

It was smaller than I thought it would be. There was just enough room for a small pedestal table for the phone  a swivel chair and the ladder that would be pulled up when someone was in the tower. The chair and table had to fit without blocking the hatch. 

I was pleasantly surprised with the views of the store sales floor. It was better than I had hoped. There were a lot less blind spots than I thought there would be. 

The static over the walkie talkie was a little annoying . I believe it was being so close to the florescent lights that caused the interference .

So finally my little step towards addressing the  inventory shrinkage had taken another step towards that end. And I considered it a large step that would not only deter some potential thieves but I could actually catch a few and send a message to the thieving community that the day of reckoning had come and we will no longer stand for... I remember that at some point during  my jubilation there was a tap,tap,tap on the hatch. I slid my chair over and lifted the hatch.

She had a combination of angry eyes with a little smirk around her lips. It was very similar to the look I got when I first told her that I was going to turn one of her dressing rooms into a security tower. It unnerved me then and seeing it again was a little scary. I will never forget our short conversation!

“How are things going?” She asked. “Good”, I said, I think this is going to really help in stopping the shoplifting problem. “Great!”, she said, “what do you want me to do with these?”

She was holding up an old tattered pair of jeans. Apparently while I was in my ivory tower someone had gone into the dressing room directly below me and changed into a brand spanking new pair of jeans and exited the store leaving his old jeans behind. 

By the way those old jeans today would be worth about 50 bucks. Just saying.

I don’t recall what I did immediately after being told the news. It’s possible that my brain short circuited and it had simply shut down.  

Anyway, over the past years, I have talked about that event hundreds of times. But the tower had a few more stories in her; some good and two kind of sad. The tower taught me several lessons that would help shape my future management style. I think in a good more realistic way than I would have without the tower experience.

Despite the early embarrassing trip the tower was having a positive effect on the frequency of shoplifting.

Bad Surprise!

The tower did help catch multiple shoplifters and, for the most part, we did prosecute to send a message to the community. Of course there were cases with, what I would call extenuating circumstances or sympathetic stories. Within those categories there were those who were young, stupid and had no record. I had a problem placing a mark on an young person's life. I was young and stupid once.

But the tower did come into play involving internal theft of cash.

Every so often, but not scheduled for security reasons and as is the practice of any business, we would do a cash register pickup. This included cash, checks and credit card receipts. Those pickups would be counted, double checked and recorded by cash register number.

The next morning all of the prior day's receipts were reconciled. It's a rather straightforward method and the result will show one of three things for each pickup point. Each register would either balance, be short and on some occasions have too much cash. I usually cringed when the latter happened because that meant that we probably cheated some customer when giving change back.

The only other variable would be the person running the register trying to manipulate the register to their benefit and got it wrong.

One day the store office informed me that the restaurant register was twenty dollars short for the prior day. That is a very specific and well rounded amount. Usually when there is a shortage it's pennies or portions of a dollar to include one dollar. Twenty dollars missing sends up a big red flag.

I made a mental note and went back to business. A few days later it happened again. Twenty dollars was missing from the total receipts for the same register. So we knew we had a potential internal problem.

Internal theft is a very serious problem and needs to be stopped in a way that catches the employee.

Announcing that we are on to the problem and investigating will stop it for a while. However sooner or later it will rear its ugly face in a slightly different way. So the best answer is to catch the person in the act.

A pattern did develop. Every few days twenty dollars went missing from the restaurant register. So that narrowed it down to someone who had access to only the restaurant register.

We needed to narrow further the timing of the theft. Three times each day for a couple of days I visited the restaurant register during a lull in business, did a register reading and counted the drawer. That information along with the prior reading, on all three instances the register balanced.

On the second night I finished checking the register for the last time. All three checks showed that the register balanced. After the store closed I counted the restaurant register receipts. It was twenty dollars short. I knew then I had caught the thief! I now had to prove it.

My initial thought, that it was someone who had only access to the restaurant register, was incorrect. The prime suspect was one of the security guards I had hired. One of his responsibilities was to do the regular pickups. While very disappointing and embarrassing if it were to be proven true it would be one of the most flagrant abuse of trust I had experienced in my career to that day.

What confused me was why that register every time? I would think that he would mix it up some way. Maybe a different register and amount each time for example. But I knew it was only a matter of time for me to be able catch him in the act.

The tower provided me with a unobstructed view of all the registers. It only took a couple of nights observing the pickups.

He came out of the restaurant and proceed directly towards the office. About halfway there he quickly shoved his hand into the pickup pouch and came out with a bill and shoved it into his pocket. The pouch had divided sections each for a certain register. The first divider was the restaurant's.

I don't think he gave any thought whatsoever as to which register it was. It was simply the easiest to see and get to the bill he wanted.

When I got back to my office I confirmed that there was twenty dollars missing and called the police. The officer arrived very quickly. All the officer could do was shake his head as I conveyed the story to him. Then I called the security guard over the two way radio and asked him to come to my office.

When he arrived he looked a little shocked as to what he was walking into. That was the response I was looking for. My first sentence to him was very direct, "Give me the twenty dollars you took out of the pickup pouch". His response was expected in that he did not know what I was talking about. I was pretty sure I was speaking plainly enough so...

I explained to him, slowly, that I had been on to him for some time. That I saw him remove money from the pouch. That the register did again come up twenty dollars short and that I had marked each twenty in the register drawer with a small check mark; all on the same corner.

I said again, "give me the twenty or this officer can search you". He confessed and handed me the twenty; marked with a check mark. I gave the twenty to the officer who took his statement followed by his arrest for theft.

I'm not sure what happened to him after that night. Those things tend to take some time even with a confession. I was not contacted regarding the case. We would only be able to prove that one twenty dollar bill was stolen. My guess is not too much happened to him given the amount stolen. He probably pled guilty or no contest. Either way the chances of him working as a security guard again would be slim!

Thanks for reading my Musings. I may start another page again but for now it's back to my talking to new retail / business up-and-comers.

Jim


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