I cannot recall a loss prevention team being as publicly lauded as the Coles Smarter Profit team was in 2024. “Crackdown on thieves puts $80m in the kitty” was the headline following CEO Leah Weckert’s F24 profit announcement (Sydney Morning Herald – Finance 26/8/24). It is rare enough for stock loss and theft to be mentioned in a market update, but for loss prevention to be so publicly credited with improved results is truly remarkable.
There is no doubt that the cost-of-living crisis hurt Coles and other retailers through increased theft throughout 2022-2023. Stock loss increased sharply as people who had not shoplifted before began stealing, plus the more experienced increased their volume or frequency. At Coles, we reacted by creating an accelerated strategy that would materially shift the dial on our loss trend.
The strategy was created under the “People – Process – Technology” banner and included initiatives that were both cutting edge as well as an upweighting of the tried and tested.
PEOPLE
· We upweighted our covert security delivery and recruited additional suppliers. This resulted in a whopping 25,000 shoplifters being apprehended in 12 months. Our data tells us that 94% of offenders that are apprehended by a covert do not get caught in Coles again. This strategy was particularly effective as the climate had driven new people to offend who were more easily “scared straight” through apprehension.
· We also developed the Rapid Action Response team with our service provider MA; a team of the very best coverts deployed selectively to target specific offenders
· Amelia Adey joined the Coles team and took control of our engagement and communication.
· We saw significant improvement in the quality and usefulness of our stores’ Auror reports through her focus on key factors and training.
· Amelia’s various communications to store teams kept them motivated by seeing the wins coming off the back of their intel.
· We also revamped our upline communication with informative and exciting weekly executive updates that sold our programs and results to senior leadership.
PROCESS
· We expanded our Organised Retail Crime program to include a new element known as Quick Wins.
· Quick Wins capitalise on the increased police interaction on the Auror platform by targeting recidivist and higher value offenders who fell outside the scope of our more serious ORC investigations. In many cases the police were identifying our offenders and requesting the evidence themselves.
· In F24, the Quick Wins program resulted in over 1,000 recidivist shoplifters being charged by police.
· Continuing focus on the ORC syndicates and collaborated with other retailers and police to cause genuine disruption.
· Addressing store process, the Smarter Profit team introduced a revamped indicator program to have clear metrics on all loss leading behaviours.
· We saw a clear correlation between improved stock loss and improved indicator scoring. This also provided Loss Coaches clear focus areas and target stores.
TECHNOLOGY
· Coles became the first retailer in Australia to introduce the iTab ‘Smart Gates’. These gates only open when a customer has successfully completed a transaction in the Assisted Checkout. For those trying to walk straight out, the gate stays closed.
· This was paired with Everseen skip-scan detection to create a potent combination of both scanning and egress security.
· An in-house software solution was developed, known as Bottom-of-Trolley (or BOT), to detect bulk items that were left in trolleys unscanned (think soft drink cans – one of our highest loss items).
· Other technologies deployed include ANPR, wrong-way detection (for those exiting at the entry), and in-aisle AI behaviour detection and weighted shelves.
· Our revised focus on internal fraud saw us introduce a new software program that delivered alerts direct to store managers. This was a more proactive approach and focused more on early intervention and culture change rather than pure investigation.
· Whilst terminations did increase 50% YoY, an even bigger success was the thousands of coaching conversations that were now taking place to prevent future loss and fraudulent behaviour before it happened.
In conclusion, the numbers speak for themselves. Coles Smarter Profit team reversed the loss trajectory through an aggressive but calculated program. We delivered amazing loss results that materially lifted the bottom line, playing an undeniably significant part in record profits.