Loss Prevention Strategy and Analytics (LPSA)

Cross-functional assessment

We help organizations understand where their loss prevention function is today and how to move closer towards the goal of continuous improvement by performing a cross-functional analysis of the processes that impact loss or operational performance. We listen and observe, and then work closely with you to arrive at a plan that will help you meet your goals.

Advanced analytics model

We help you gain clarity about which metrics are statistically valid indicators of loss by identifying areas of operational risk and creating custom dashboards that highlight and track outlying variables.

Retail analysis services

We help reatilers focus on getting ahead of problems before they arise and mitigating loss when it happens. Our framework encourages the integration of loss prevention activities across the enterprise-not just in stores-and features a dynamic risk-based approach to better align resources allocation. Addressing root causes in audit programs is part of our focus on visibility into the essential components of retail loss.

Strategic execution

We deliver an end-to-end approach to asset protection, helping you identify and deploy key metrics as well as strategize and prioritize your resources to improve profits and mitigate risks. If desired, we can arrange custom sourcing agreements to supplement your in-house capabilities.

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A recent National Retail Security Study revealed that inventory shrinkage represents 1.47% of retail revenues, which equates to more than $44 billion in annual losses for US retailers.

To guard against new and chronic sources of retail loss, today’s retailers need advanced strategies, analytical methods and a proactive approach to identifying the potential for loss. Retailers who get it right reduce overall shrink, use resources more effectively, reduce exposure to other risk factors and enjoy meaningful bottom-line benefits.

PwC’s Loss Prevention Strategy and Analytics (LPSA) team brings real-world experience in the retail industry to address these challenges. Through our strategic approach to loss prevention based in data and analytics, we help deliver sustainable competitive advantage.

At the core of our approach is a client-specific advanced risk/analytical model that helps establish the variables indicative of loss in your organization. This proprietary maturity model allows us to analyze an organization’s loss prevention capabilities against a continuum of industry practices. Our team will help answer key business questions, such as how to design and use advanced data analytics in risk mitigation and loss prevention efforts.

Key areas of focus:

  • Shrink/loss reduction consulting services
  • Loss prevention/asset protection functional transformation (including decreased audit redundancy and risk-based resource allocation)
  • Development and integration of compliance initiatives to mitigate business risks while improving organizational performance
  • Supplementary in-house loss prevention resources, co-sourcing or outsourcing of the loss prevention function

If you’re ready for a thorough and transformative approach to loss prevention and the management of retail assets, PwC can help.

Root cause diagnostics

Identifying the root causes of shrink is one of the most important factors in being able to effectively prevent loss. Our retail experience has shown that risk diagnostics must reach beyond store-level operations to include a holistic view across the enterprise of key factors that are highly correlated with and believed to be causing loss. Non-traditional retail channels, including e-commerce, mobile point-of-sale, self-check-out and emerging omni-channels make root cause diagnostics more dynamic and challenging.

Our root cause analysis examines risk factors across key functional areas of the organization as well as the internal and external drivers of physical shrink, uncovering indicators unique to each. We then work closely with you to establish ongoing controls to mitigate losses.

Theft vs. operational sources of shrink

It is essential to distinguish among shrink caused by theft versus other types of shrink, such as data integrity and operational execution gaps, which involve operational considerations. Each is important in understanding the total picture of loss throughout the organization. Our framework not only helps identify and categorize the various causes of shrink, but also assists in establishing important benchmarks that can help set the stage for problem resolution, continuous improvement and resource allocation.

A sustainable advantage

Our goal is to help clients achieve a dynamic and proactive approach to loss prevention. Our insight and technology-driven methodology guides you from a clear understanding of your current state to the development of transformational process improvements and the creation of an end-state roadmap to achieve a sustainable advantage. Central to our approach is the development of a client-specific advanced analytical model that statistically helps establish the variables indicative of risk in your organization. Some of the sustainable advantages that can be achieved with this approach include: overall process efficiency, dynamic monitoring and reporting, and mitigating controls for the root causes of risk. Our goal is to help clients proactively identify current and emerging operational risks, thereby enhancing their business planning through optimized resource allocation.

Loss prevention metrics at a glance

To monitor loss prevention efforts across today’s complex, omni-channel, and potentially global retail operations, a dashboard of up-to-date information is mandatory. Many companies, however, find themselves data rich and information poor.

Our proprietary maturity model and enhanced dashboard analytics help you focus on the metrics that matter most, and present them in a clean, clutter-free environment. We provide dashboard design and technology to make the tracking of these indicators easier for both home office and store personnel. This actionable retail loss prevention intelligence can help achieve the continuous improvements and benchmarks of your future-state vision as well as shorten the interval from detection to resolution of factors leading to loss.