McGowan: Our stores used to be set up by salons. You'd come into a store and you'd go one way into the high-end jewelry, estate jewelry and diamonds, or you'd go into another salon, which would be the silver jewelry, entry-level gold items and tabletop items. If you were in one salon, you couldn't easily see into another. We've really changed that to a more open environment so that you can now look clear across to the other side of the store. That was primarily driven to be more inviting to our customers, but by default it helped us out from a surveillance point of view. Our cameras and security officers stationed on the floor now have a full view of the entire store. Security success is often measured by the absence of certain activities. What metrics or techniques do you find useful for measuring the loss prevention group's performance?McGowan: First of all, if nothing happens, that's our greatest achievement, particularly from any of the external threats that we face on a daily basisrobberies, burglaries, switches and thefts, which usually entail large-scale losses. Something we're looking into aggressively this yearbecause security at Tiffany transcends retail and goes into manufacturing and distributionis to come up with metrics that will give us a greater sense of goal achievements or comparison achievements versus previous years. We're looking at a number of different approaches: using an annual loss expectancy type of formula, or we're also looking at more well-known processes like the Six Sigma approach to quality assurance and sales. Ironically, corporate management can create roadblocks to a successful loss prevention program. Is there a reluctance to admit the problem, similar to companies that get hacked but don't want to talk about it?Rogers: I think in retail [the problem] stems from a historical perspective that loss prevention was really sales prevention. Today, loss prevention practitioners understand the economics of their responsibility far better than any of their predecessors did, and we operate almost completely on a return of investment basis.
McGowan: I agree with that wholeheartedly. I think there has been a big change in our industry with loss prevention practitioners becoming much more business-minded and more partnership-minded with management. We have become very attuned with the needs of the business. The early roadblocks were just thosethat whole "sales prevention" mentality. The risks in the jewelry industry can be very dangerous. This industry is under the threat of armed robbery on a daily basis, and Tiffany has not been without its own armed robbery incidents in the past. Those can be damaging from an inventory perspective, but there are also far more wide-reaching human issues in terms of [the safety of] our employees. We really don't want that happening in our locations to our employees. So with that in mind, security and loss prevention here is looked upon in a different light, and there are fewer roadblocks. How can other companies get through those roadblocks and put loss prevention and security awareness at the right level?Rogers: I think that security and loss prevention really have to make a concerted effort to work very closely together and with their counterparts in information security.
McGowan: I have been spending a lot more time with our IT group over the past three years. I also decided to enlist the help of a third-party IT security group to spend three days with me one-on-one just to see how much I didn't know, and it was truly an enlightening experience. [Laughs.] The amount of issues, the amount of information protocols that are out there in the IT security world is truly astounding. But the one thing I walked away from that experience with is [the need to] get away from a lot of the industry lingobe it IT or security or whateverand you get down those five basics King mentioned earlier.
Copyright © 2004 IDG Communications, Inc.
