THE top manager at Lowe’s has offered a simple solution to retail crime that puts customer service at its heart.
Marvin Ellison, CEO of Lowe’s, said in his speech at the 30th annual Goldman Sachs Global Retailing Conference that the company had not seen a major negative impact from the theft “from a margin standpoint.”
“This is one of the areas of the company that we are most satisfied with.
“As a large retailer, you are right. We are one of the few that have not flagged shrink as something that has a material impact on gross margin or operating profit,” Ellison said when asked about shrink issues.
Ellison appeared to quietly denounce his company’s competitors such as Target and Walmart, which have seen a rise in retail crime.
“It’s a difficult environment,” he said. “I’ve never seen anything like this and we’re incredibly excited to be able to deliver a differentiated performance compared to the other major retailers.”
In December, Walmart CEO Doug McMillion said CNBC: “Theft is a problem. It’s higher than it has been in the past.”
While Target CEO Brian Cornell warned in May that the company is expected to lose $500 million in profits in 2023 due to a lack of inventory due to theft.
“It’s a pressing issue,” Cornell said during an earnings call, “not just for Target, but for the entire retail industry.”
Many major retailers have focused their anti-theft efforts on new technologies such as cameras and plexiglass enclosures to detect and thwart thieves.
“We’ve invested a lot of technology in different areas of the business in front of the customer and behind the scenes to address this, and we’re taking a unique and differentiated path,” Ellison admitted.
However, Ellison said the greatest impact at Lowe’s is great customer service.
“Having spent my entire adult life in retail at all levels, it is clear to me that effective customer service and ensuring you have the right type of merchandising display is the biggest deterrent to theft activity,” he said.
Ellison explained that having employees help customers at Lowe’s stores results in fewer thefts.
“Our margin increased year-over-year and we had a very strong operating margin,” Ellison said.
“And we do not expect the decline to have a material adverse impact on our business for the remainder of this year.”
To reduce theft in your stores, Ellison says companies need to pay and train their employees well.
Lowe’s is at the top end of the pay scale for retailers, the outlet reports.
The average hourly wage for a Lowe’s employee in the New York City borough of Brooklyn is $16.81 per hour ZipRecruiter.
Accordingly, the company recorded a shrinkage rate of around one percent in the last quarter The streetwhich is below the industry average.
With fewer customers trying to steal, the company’s security team can work more efficiently.
Ellison said: “We have a dedicated asset protection team that I believe is best in class in retail.”
“They have great partnerships with law enforcement and the like.
“And we spend a lot of time training employees,” he explained.