Superpowers for Super Risks
How Entrepreneurial Retail Is Managing the Gathering Storm Clouds of Risk
If retail has a superpower, that standout quality that distinguishes it from other seemingly more pedestrian market sectors—entrepreneurship, vision, and skill to transform risks into fortunes—it would probably represent the one cape flapping capability that makes economic forecasters look up to it like a bat-shaped beacon in the storm-gathering sky.
Despite the naysayers writing off the high-risk high street, its ability to not only survive but often thrive when the meteor strikes of global challenges—the supply and staff shortages and inflationary pressures resulting from an international pandemic, the continued fallout of Brexit and the yet-to-be-reached high tide marks of what climate change and the cost-of-living crisis might yet deliver—never fails when it comes to wrong-footing industry analysts.
As the UK’s biggest employment sector, just shy of 3 million people, retail represents a shop window on the economy, a bellwether of commercial performance, signalling the trends in what’s hot and what’s not through the retail price and consumer goods index predicting the ultimate in supply and demand, seasonal spikes, and everyday essentials, as well as everything from footfall to click-through. Global changes and adaptations were crystalised during the pandemic where faltering bricks and mortar sales made way for online fulfilment, with the sector turning to omni-channel delivery to super-charge profitability, especially during the most trying of times when non-essential high street stores were closed to customers.
According to the Prosper Insights and Analytics report, in 2021 more than 40 per cent of respondents had turned to online fulfilment, particularly for groceries, as a result of the pandemic. Also found was double-digit growth for larger ticket sales such as furniture, which in normal times would have required an experiential visit to a showroom before a purchase. The sector read those runes and rose to the challenge.
During this time essential colleagues took on the superpower of “key worker” status, keeping the nation fed despite chronic shortages resulting from the lockdown. Retailers dug deep to offer those colleagues adequate protection from often frightened customers who lashed out in frustration when challenged over occupancy levels, social distancing, or facial coverings in the absence of Police support. Indeed, the proliferation of risk-mapping and target-hardening of stores with COVID screens, body-worn cameras, and lone working devices, all introduced between 2020 and 2021, have now become essential tools on the everyday retail utility belts of many workers in a post-pandemic world. All these examples represent entrepreneurial additions to the day-to-day key worker arsenal, as levels of aggressive shoplifting and store colleague abuse again begin to rise along with increasing footfall during 2022.
Loss prevention and health and safety functions also became less siloed departments, working more closely together as retailers doubled down on the overall risk management of their businesses and even collaborated more with industry peers through bodies such as ORIS Forums, a not-for-profit facilitation organisation that brings risk professionals together to share best practice relating to risk within their businesses. Once again, in a world where collaboration has become the new competition, this represented an entrepreneurial approach where leading brands battling for market share on the high street accepted that they did not have all the answers to their “in-coming dangers,” such as the new and emerging risks impacting their people, profitability, and property. This dare-to-share approach is not dissimilar to the Avengers Assemble, part of the hugely successful Marvel multiverse franchise of films where several superpowers are always better than one.
The Importance of Data
Along with entrepreneurial approaches, the other big-ticket weapon in retail’s armoury is data—the more robust the better. Data that provides the granular risk information that can be used to target clear-and-present threats with super-charged reactive and proactive responses will be the most successful. According to Canadian-based risk management consultants ClearRisk, there are six reasons data is critical to informed retail thinking:
- Increased efficiency,
- Better decision-making,
- Greater financial transparency and health,
- The ability to make more informed choices and targeted risk responses, including, importantly, getting it over the line when pitching to the board,
- Increased accountability, and
- Preventative measures to reduce repetitive losses.
Of course, the data is only as good as the team analysing it—those experienced superheroes who can interpret number patterns and identify trends from risk mapping to data mining. These keyboard warriors do not operate in a silo but nowadays increasingly work with the broader teams and risk technology giants as well as software developers to bring more intuitive solutions to market.
Such is the symbiosis between the retailer and the technology provider that the ultimate solutions now have greater accessibility to the wider risk team. In short, the technology has been “democratized” to be easy to interpret and increasingly empowering broader loss prevention and health and safety teams to interrogate the data and deliver positive outcomes off the back of the intelligence outputs. This could be anything from a fire safety audit to a stock count with field or store teams prompted throughout the process to complete the task to deliver the result in real time.
Theo Paphitis Retail Group
If you could name one retail organisation where the twin superpowers of entrepreneurship and the deployment of big data have become easy bedfellows, the Theo Paphitis Retail Group (TPRG) would probably be top of the list. Founded by entrepreneur and former Dragon’s Den judge Theo Paphitis, TPRG represents the disparate and eclectic high street estate of Ryman the stationer, lingerie brand Boux Avenue, and multi-merchandise retailer Robert Dyas. In total TPRG has 330 stores across the UK employing 4,000 colleagues and collective sales of some £360 million. Despite product and customer segmentation differences they share the same day-to-day risks, all of which are managed by Mark Crowley, group director of risk and customer care.
A seasoned retail risk practitioner who has previously worked for brands including John Lewis and Burberry, Mark has had to juggle priorities across the eclectic estate during his three years with TPRG. Yet, true to the ethos of the company, he has been empowered to bring what superpower he can muster to control the equally diverse risks impacting each business. As his title suggests, he is responsible for a wide field team of risk practitioners. He also directs the customer services function.
The customer service remit is part of his risk superpower as it provides him with a commercial and operational view of the business. “There is more of a symbiosis than people would think because I have full transparency of the spectrum of risks—from trips, slips, and falls to late parcels. This is invaluable as I am able to wear two hats when I report to the board. It sits well with risk and uses the same sorts of skills and can help me to understand the whole picture, and I can apply commercial acumen on which to make better decisions. It could give me intelligence about defensive merchandising such as tagging that may be causing some customers frustration, for example.
“It’s my early warning system as it helps me to better understand the broader risks of brand reputational issues such as late or non-delivery of an item, for example, and respond accordingly by making necessary changes based on that intelligence.”
At TPRG, there are three separate entities, all different demographically and culturally. Ryman has 193 stores, Boux Avenue has thirty-one, and Robert Dyas has ninety-three outlets. Each had its own way of collecting and collating case management data, which created reporting and efficiency challenges. “I inherited one brand with an internal tool, one using Google, and another was using a paper-based system,” said Mark. “If you take incident management, as one example, it was taking at least eight minutes to record an incident, which was far from ideal. As a legacy system, it was extremely difficult to make any kind of changes. This made it challenging when it comes to managing the risk to resource spread—how we deal with three unique brand identities when it comes to incident management reporting, health and safety, or refund discrepancy data.
“It was not really feasible, so I went to the market to find a tool that could help me manage those disparate lines of reporting and bring it all together,” explained Mark, a Group executive member at TPRG.
At John Lewis, Mark had deployed ThinkLP’s management tool after he had seen it in action at the NRF Protect Show in the US. Built upon the Salesforce CRM tool, he deployed the technology across the partnership as a middleware between customer relationship management and LP. In simple terms, it created the matrix from which he could bring all his risk data together in one place in the form of easy-to-use tables and dashboards. Leveraging Mark’s leadership position and existing relationship with ThinkLP created the environment for a supercharged deployment within TPRG. “We had employed a new analyst and this coincided with discussions with ThinkLP, which resulted in something pretty amazing —the full deployment of our Group incident management reporting in under three weeks from start to finish.”
The deployment was not simply a working system, but an intuitive system that allowed any member of the team to go into it and use it with minimum help. The best way of describing this approach is to use another superhero analogy—that of Robert Downey Jr’s depiction of Iron Man. Tony Stark’s alter ego is encased in a suit and helmet, which at eye-level surrounds him with real-time risk intelligence in the form of dashboards to detect incoming danger and calculates intuitive evasive or attack instructions. Using these features, he has time to assess the wider risk and act upon that big immediate threat data.
Although Mark is not comparing himself to a Marvel superhero, his Group-wide risk team now has greater transparency of total risk and loss. They also have the tools to create and deploy separate tabs as threats emerge, whether it is aggressive behaviour, cash discrepancies, age-restricted sales, manage intelligence around gifts and hospitality, or to ensure colleague compliance with the Bribery Act. In fact, any emerging threat can be added at any time by any team member to ensure a total view of the risk landscape at the click of a button. “It empowers my LP and health and safety teams to add different and bespoke templates,” he said. “We can now see every discrepancy, every incident, and every accident. It has become a go-to, one-stop shop for risk management, offering a simple view.”
The team is empowered to use the data as a crib sheet ahead of store visits as every detail of the estate is added—the names of employees and new starters; the number of floors, tills, and fire exits; the locations of CCTV cameras; the amount of refunds; and age-restricted sales refusals—in order to benchmark changes, remedial actions, or make performance improvements. For example, the team now has complete transparency of slips, trips, general accidents, and RIDDOR compliance (Reporting of Injuries, Diseases and Dangerous Occurrences Regulations) as well as visits from fire services and local environmental health teams.
Specific portals can be set up through the system to remotely carry out audits and risk assessments that also save time. “Forearmed is forewarned,” Mark explained, “which means that before I go into any store, I now know everything I need to know to conduct that visit effectively—and it pushes the data out to the right people.”
As a subscription-based model, Mark can add new licensees as his risk team increases with no additional capital costs. “This has been a game changer, and the team loves it because it simplifies their lives and saves huge amounts of time in their days. An incident that would have taken eight minutes to report can now be added to the system in less than one minute.” This report will not only contain the granular dashboard data but can also export any supporting CCTV footage, all of which can form the basis of a Police evidence pack. “District managers love it as well because they can filter the risk reports by the regions—there is no longer the need to reformat reports or export data. They can build a bespoke report in minutes.
“I now have a heightened view of the organisation as a whole, which I can easily share with the leadership team —it is total visibility of risk,” he said. “The benefits to me are that we as a business now have the ability and speed to resolve risk incidents quickly, and through the case management function, all actions can be followed up on. We have transparency of trends in accidents and injuries from the past as well as the present so that we can show that we are taking safety seriously and can deploy extra training if needed.”
COVID was obviously a driver of different tab creation on the system as the business, like all retailers, was dealing with never-seen-before risks. Some of those tabs will remain post-pandemic, but others have been removed to make way for the plethora of new risks facing the business that require the fire power of the team and the board.
“Risk managers may have their suspicions of something, but the hard data backs up that intelligence, and it helps in terms of investment. If we need to put something into place—it is done based on the science. We can proactively search for risk, but with the benefit of the intelligence, assign resources to it.
“Everyone now sees the power of the data on top of a rapid return on investment—it is what we call daisy-chain data because it cuts across different departments from risk to customer care and we can build intelligence that is updated every week. This is really useful if, for example, we have introduced a new tagging system or CCTV cameras, we see the results.”
Mark added, “LP and risk in general is all about credibility. I can’t turn around to the board when asked a question about a specific risk and say, ‘I don’t know.’ But I can now confidently walk into Theo’s office and give him chapter and verse of what has happened by store, town, or city, if that is what he needs to know.”
The Hidden Superpower of ThinkLP
Although they were not thinking about Robert Downey Jr.’s Iron Man character when designing the system, the comparison chimes with the practitioner-led expertise behind what ThinkLP refers to as “awesome LP software.”
Tony Sheppard, MSM, CFI, LPC, senior director of LP solutions at ThinkLP, who spent eighteen years at CVS Health’s Retail Crime Division before joining the team, said, “We’ll take that comparison. Like Mark, most clients come to us because they are looking for a one-stop shop, which includes case management, audit, and analytics. On a daily basis, retailers have tons of information coming at them—trips, slips, theft data—and they want it pulled together into one place as a repository where they can interpret and act on the intelligence.”
ThinkLP is a customizable platform. “No one in the business is excluded from this, whether it’s LP or HR. Everyone can review the relevant information and actions can be pushed to different individuals or teams,” he said.
Tim Read, LPQ, global account director at ThinkLP, added, “Having easy access to that data, we can follow the right business processes to create actionable events and delegate tasks X, Y, or Z to improve overall performance and improve visibility of what was once invisible—all of which gets recorded. This triggers the business to behave differently in terms of putting additional policies in place to counter risk and allows the organisation to grow and evolve through different workflow and processes.”
We know that the retail business is always evolving and retailers need to be adaptable to these changes. Tim added, “One of the stand-out features is that we are configurable so that clients at any level can add fields and customise the reports. It is very intuitive, which is where the magic happens. Being a customizable solution has helped ThinkLP clients immensely at all levels to obtain the best data in a way that allows them to make strategic business decisions. In fact, ThinkLP is so customizable and easy to use, users can drag and drop the information that they want into a bespoke report and create whatever customised dashboard suits their needs. Good data in means good data out, whether it is a CCTV clip, a PDF file, or an Excel spreadsheet.”
Tony added, “HR may need to investigate employee data, which it can do through individual colleagues or via a store. At CVS we used the data for loss prevention purposes, but also for pharmacy reporting. The data output depends upon who, what, and how it is filled in. You can set rules on access. For example, certain people would be automatically notified for external thefts over £500 or if specific products are stolen—these are the people who not only need to know but are also alerted to what action they need to take.”
ThinkLP celebrates its tenth anniversary in 2023. It was founded by Canadian entrepreneur Doug Treleaven, a former consultant to the LP world. During that decade, its ability to create “calls to action” from disparate sources of data previously located in multiple locations—many of which are often not used—has become known across the industry as “a single source of truth.”
This has even manifested itself in climate-critical data and the essential responses required for storm awareness and preparedness. ThinkLP was used widely by US companies with businesses in Florida when Hurricane Ian swept across the peninsula at the end of September this year. “We could not only risk assess what was likely to happen pre-event by identifying stores in the path of the storm, but also post-event to manage damage control, including advising colleagues about safety and telling them not to come to work today,” added Tim.
The wind of change is blowing through the risk community as proven by such big-ticket events where businesses need all the big data in one place to prove they are storm-ready for whatever comes their way. The more entrepreneurial businesses with a wide range of challenges are also, metaphorically, shoring up their premises in terms of risk to resource deployment. They can only achieve commercial weatherproofing through the superpower afforded by centralised and smart intelligence.