Retailers appear to have a problem: Their loss prevention management is not always working toward the same goals as those of corporate executives. While the C-suite is developing an overall strategy that all departments in the retail organization – including loss prevention (LP) – are expected to follow, what they identify as being areas of concern may not necessarily align with the priorities of LP management.

With annual retail shrink averaging 1.59 percent of net sales, according to the University of Florida’s 2006 National Retail Security Survey – a figure that adds up to $40.5 billion a year for the retail industry – and the recent economic downturn putting the brakes on consumer spending, the stakes are higher for retail organizations to improve efficiency and focus on preserving, and hopefully enhancing, their bottom lines. Therefore, bridging gaps between the C-suite and the LP department, a function dedicated to protecting the company’s assets and investments, must be a top priority.

In light of this, during the second half of 2007, Protiviti conducted two separate surveys – one targeted to C-level executives and the other to LP management level professionals – to better understand LP strategies and practices, as well as the possible reasons for the differing priorities and barriers to communication between the C-suite and LP departments.

Key survey findings include:

1. C-level executives and LP management are not on the same page with regard to LP priorities and areas requiring improvement.
2. Executives have a strategic perspective on LP, are highly focused on areas related to profitability, and may not understand LP tactics or be aware of what is happening “in the trenches” of the retail organization.
3. LP management’s approach to LP is generally more tactical, issue-specific and reactive.
4. Executives and LP management agree that Theft and Fraud is a top priority in terms of resource allocation, but differ in regard to prioritizing resources for other LP areas.
5. Nearly half of corporate executives and LP management anticipate an increase in their LP department’s budget this year.

Download 2008 Loss Prevention Capabilities and Needs Survey: Assessing the Differing Priorities of Executives and LP Management (PDF) (requires Acrobat Reader; please disable your pop up blocker)