Five trends that will redefine retail and supply chain security in 2020, and beyond by Adriaan Bosch

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At TPSO we look for the views and opinions from the biggest names in the security industry             from across the World. We asked Adriaan Bosch, in South Africa, to give us                                             his views on the shape of post Covid security, in S.A.

We are in a new decade where we are faced with a rapidly changing world around us, with the speed of change driven by the unrelenting need of consumers for new services and product offering. Changes in technology, economic condition and customer expectation have had (and will continue to have) a direct impact on retail and distribution. With a customer base that is now truly global, it has become more important for business to understand what customer’s value. The following trends will make you think differently about security as an enabler to provide a competitive advantage to business.

  1. E-commerce and rising service expectation.

A recent study found that the amount of time a customer is willing to wait for free delivery has dropped from 5.5 days to 4.5 days. The AlixPartners report on e-marketing released in March 2018 showed that customers would base their decisions on where to shop on the time it would take to receive the products. Price and product have essentially been replaced by speed and specialisation as differentiators.

Decentralised Distribution Network

Distribution networks developed in the previous decades were designed for large orders, longer lead times and less frequent shipments. Like the industry, mature businesses are moving to smaller, more frequent shipments and increasingly adding value added services to their offering. Consumer’s requirements for convenience and fresh produce also places strain on distribution networks. Customers are also more knowledgeable and conscience of their impact on the environment with every aspect of the business needing to reduce waste and become more sustainable.

Businesses who want to keep a competitive advantage would need to develop smaller localised facilities to decrease delivery times and reduce their impact on the environment. Intermingling wholesale, retail and e-commerce operations under the same roof have become common practise. It all makes for more complex operations to manage over a large geographical area providing opportunities for organised crime syndicates to exploit these challenges.

From a security management perspective, a decentralised distribution network with more facilities in various locations is more challenging to control effectively. The smaller location doesn’t justify the appointment of senior personal to manage the security operations, with less security personnel on site in total to manage a more complex operation. Front line security managers need to implement new systems, policies and procedures, to effectively lead a decentralised security structure. The management of access control and surveillance systems are also much more complex. Not only do you have a wider variety of services that require access, but as a manager the range of contracted companies you need to manage also increases.

Changes to technology fortunately provide the ability to monitor and manages multiple surveillance and access control systems from a central location. It ultimately provides for a solid business case to develop a central command centre that acts as a force multiplier for a much wider scope of security operations.

No Hassle Returns

A “No Hassle” returns policy is a critical aspect of building trust and loyalty for e-commerce customers. The shoe retailer Zappos who is often lauded for its excellent customer service has a 365 day return policy that would go against the grain of most loss prevention manager’s instincts. They have however found that customers with the highest return rates are also the once who spend the most with the brand and generates the highest volumes. In a decentralised distribution network you will find that customers need direct access for collections and returns in your distribution centre. The need for very robust and clear return policies and procedures will play a direct role in developing new income streams for the business as well as playing a critical role in building trust and loyalty with e- commerce customers. Security or loss prevention personnel might be the only company representative they ever deal with face to face. Make sure they remember it for all the good reasons.

  • Door to door delivery

With e-commerce comes express delivery to your home or place of work. First of let’s consider it from a security management point of view. Express deliveries often bypass the post room with delivery personnel sometimes having free range of your facility. They not only have the ability to bring in a whole host of restricted or forbidden items, but can just as easily conceal and remove items of value from your facility. It’s important to have specific policies and procedures in place to deal with express deliveries and the risk associated with it.

From a service delivery point of view, express deliveries open up new markets for businesses but also a whole host of risks. Some aspects to consider from a security and enterprise risk point of view are:

  • Legislative requirements. In particular the delivery of Pharmaceuticals and hazardous materials are in some way governed in most countries around the world and you need to consider the impact of not following legislative requirements.
  • Reputational damage. The deliveries are often done by third parties often carrying your organisations insignia and acting on your instruction. Their actions or non-actions could have a direct impact on reputational risk of your organisation.
  • Ambushes and emergency management:  Ambushing delivery vehicles is no new threat, but the volume of occurrences might catch you off-guard. Make sure you’re prepared and potential hot spots or risk areas identified and communicated. Take a stand for the safety and security and ensure you build in no go areas where the risk clearly outway the reward.
  • The Rise of Experimental Retail

With the rise of e-commerce came the decline of traditional bricks and mortar stores. Businesses are constantly experimenting, aiming for that new first, or growing their conversion rates and customer base. In general there is greater movement towards a more holistic Omnichannel offering to prospective clients and in particular devising new ways to enhance the overall retail experience of the customer. Businesses often don’t know where the next wave of growth will come from. To adapt to the rapidly changing needs, security solution designs must be flexible enough to allow for future growth and risk. Whether it’s self-service checkouts or drone deliveries to the home and business, Security Managers need to be able to adapt and learn new skills to help business mitigate their risks and limit loss.

Traditional Bricks and Mortar stores will become smaller with less stock but more products on offer. Customers want to be immersed in the experience. They want to touch, test, taste and try before they buy. This is particularly true when it comes to electronics that often have all the characteristics that influence the motivations for crime and CRAVED by criminals. (Concealable, Removable, Available, Valuable, Enjoyable and Disposable). Whatever techniques or systems worked yesterday, might not work tomorrow. Security Managers need to keep reading, network with other professionals and join industry organisation to ensure they are one step ahead of the criminal.

  • Chasing the bottom line.

In an international market it is critical for business to drive down cost in order to remain competitive. Spending cuts can have a direct impact on the security department, but can also have an indirect impact on your operations model. One example would be the introduction of night time deliveries to stores. With the rising cost of fuel and traffic on the roads during the day, more and more companies are moving to night time deliveries when there is less traffic on the roads to save on fuel cost.

While it results in significant saving on the company’s fuel bill it creates a whole host of risks for Security Managers to deal with. Delivering and receiving procedures of stock needs to be adjusted to accommodate delivery times while the store is closed for trade. The store’s security systems need to be redesigned and configured correctly to keep the store safe during deliveries during closing hours. The delivery vehicles are also more at risk at night when there is less casual surveillance to notice and report any suspect activities. Drivers are often fatigued with a higher incident rate during the early hours of the mornings. Being able to adapt and deal with the change will ultimately help build a leaner more robust business.

  • Big Data

To quote Geoffrey Moore:” Without Big Data you are blind and deaf and in the middle of a freeway.” Companies are becoming more dependent on data as a new analytic-driven approach lead organizations to achieve a more sustainable market place advantage. Data help guide decision makers on what’s best for the organisation and map out a direction for future actions. In the same way good data can generate a strategic advantage to the organisation, bad data can have a catastrophic impact on an organisation. Gone are the days of relying on FUD (Fear, Uncertainty & Doubt) to justify department expenditures, risk factors etc. Security managers not only need to put procedures and systems in place to collect data, but also be able to analyse and interpret data to make calculated decisions.

These 5 trends are making security operations more and more complex… and can either enable or impede company performance. On the flip side they also represent opportunity for security managers and departments to create a competitive advantage out of innovative solutions. Consider how these trends are impacting your security operations and whether it is time to give more thought to how you can take advantage of the opportunities they provide. Because as every African knows all too well, where there are challenges, there are opportunities!

Adriaan Bosch

Adriaan is a Corporate Security Management professional and currently the Group Security Manager for Africa’s largest retailer. Looking after 149 000+ people over 15 countries he has a wealth of experience in dealing with a diverse range of challenges, built up over 15 years in the industry. With a passion for security he started out as a British Infantry Soldier and worked his way up through the ranks to where he is today