“The more things change, the more things stay the same.” This old cliche accurately describes U.S. retail shrinkage, which has remained stubbornly in the range of 1.7% to 3%+ of a retailer’s bottom line. This is true across all manner of retail, whether it be a supermarket, clothing store, or your local 7-11 shop.
What is Shrinkage? Put simply, shrinkage is the loss of inventory. This loss can take many forms: employee theft, human error, food expiration, shoplifting, administrative error and vendor fraud. Shrinkage is the difference between the expected optimal sales profit versus the actual profit earned. Though 1-3% may not sound like a lot, in some instances, like the average national profit margin for restaurants (3-5%), not controlling inventory shrinkage can mean not profiting at all.
Our microstore’s premium build distinguishes itself from the average dusty gas station vending machines. Due to its premium aesthetic and full-sized commercial capacity, we find that food operator clients typically earn greater ROI by stocking our smart vending microstores with higher-end fresh food, like $16.00 bento boxes, charcuterie and cheese snack packs, or turkey burger meal-kits that feed a family of four. I am often amazed when I see the creativity and variety of fresh food products our clients use to stock their microstores’ shelves…and all of them are delicious options. Due to these tasty bigger ticket items, we often get asked, “the revenue sounds great but is there stealing?”
To provide peace of mind, here are the top three things to consider when developing the loss prevention strategy for your microstore:
- Employee Fraud: Your dashboard records unlocking, opening and changes in inventory in your smart fridge. At a glance, you can look up who purchased, which staff member re-stocked, and which items were added or removed. It all boils down to digital traceability.
- Shoplifting:
- Survey the microstore’s surroundings. Consider what’s needed for unattended retail by examining current environment and how technology can support your team’s efforts. An employee break room vs. community hospital will have different security considerations. Your microstore will perform well in high foot traffic locations and may need security mechanisms with other methods of loss prevention, such as digital video recorders, sensors, and live customer-visible CCTV devices. In extreme cases this may require prominent, clear signage warning the public that they are being monitored and list out the consequences of stealing.
- No retail operation is free from theft but the digital footprint left by employees and customers when they unlock the fridge is enough to keep most honest people honest.
- Administrative Error: Regularly speak with your staff to ensure the team is on the same page as their manager when it comes to loss prevention strategy. It’s important to train your staff to report anything they might observe and be ready to address issues.
Got an itch to launch a smart vending machine with us? We’d love to hear from you! Click here to contact us.
