Solving Problems Before They Occur
Although technology can be used to formulate predictive modeling reports, Loss Prevention’s/Asset Protection’s (LP/AP) ability to predict every incident is impossible. Because of this, LP/AP executives have tried to prevent incidents by assigning risk levels to each store location, determining which retail locations will receive specific LP/AP tools such as contracted security officers, an abundance of CCTV equipment, even an in-store LP/AP professional for high-risk stores. Although LP/AP have all these tools to reduce unwanted events, unforeseen incidents still occur. But are LP/AP executives utilizing all available resources to help minimize losses?
The answer may lie within each retailer’s Real Estate department.
Real Estate: The Next Frontier
To understand the connection between LP/AP and the Real Estate department, one must first understand Real Estate’s role. The Real Estate department is vigorously challenged to find profitable locations for retail organizations to meet the revenue demands of company shareholders. This is a very stressful proposition. No one wants to be in a Real Estate meeting when sales projections are steadily declining sixty days after a new-store opening. Despite the work done by this valuable department, their priority is to find locations that maximize sales, not locations that decrease criminal incidents. However, this doesn’t mean LP/AP executives shouldn’t be working side-by-side when new-store locations are being considered and when long-term leases are being negotiated.
Infiltrating the Lease
LP/AP executives may not believe they have a voice when it comes to negotiating leases, but that’s typically not the case. Lease negotiations can be tricky, with both parties trying to get as much benefit as they can from the opposing side. Therefore, the Real Estate executives usually have no problem negotiating terms that the LP/AP executive asks, especially when the requested terms will benefit the company in other areas.
For example, some LP/AP executives have been successful in getting leases to hold landlords accountable for installing shatter-proof glass in some build-to-suit storefronts. Others have been successful in getting landlords to add roving security officers in strip malls where their stores are located.
Another example involves landlords affording retailers certain autonomy. For instance, some LP/AP executives have been successful in getting language added to leases providing retailers with the ability to do whatever necessary to install security-related equipment anywhere on the property as they see fit. This includes things such as mounting cameras on light poles in parking lots, lightly scoring the perimeter of the parking lots and/or interior floors to install wiring for technology that prevents shopping cart theft and pushout theft. In this example, the Real Estate executive understands that the Marketing department could benefit from this request as well, knowing full well they may choose to add more exterior digital signage or other strategic initiatives in the future.
Understanding Landlords & Leases
The Real Estate landscape can be a little intimidating to some, particularly if they have never had experience dealing with their internal Real Estate executive. The key to success in this area is understanding that landlords want a long-term lease and therefore want a retailer to be successful long-term. Typically, this translates to landlords giving the retailer most of what they ask for. If the retailer is the anchor store for the development, the landlord usually gives them everything they ask for because if the anchor isn’t successful, the surrounding smaller stores will fail when the anchor closes its doors.
In today’s environment, technology is king. Retailers must make sure they are not signing leases that leave them with one hand tied behind their back. LP/AP executives need to understand what is in a lease and determine how they can get terminology included that makes their lives easier. More and more retailers are looking to install technology solutions such as Gatekeeper’s Cart Retention Solutions and asking for a landlord’s permission to install hardware after a lease is signed will be challenging. That’s why getting ahead of the curve by helping craft the terms of long-term leases can really push an LP/AP team ahead in their quest to eliminate loss.
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