ECR Retail Loss

Enabling the Retail Sector to Sell More and Lose Less

Invitation to Participate in New Research

As our research has highlighted (click here) the "marking down" of food close to its expiry date can help accelerate sales and avoid the added costs of charity donations, animal feed and landfill. In the last five years, there has been significant progress by retailers on discounting strategies, with many retailers moving away from static to dynamic discounts. Further advances have been made to improve productivity through the use of ledger based systems that help reduce the number of inspections by 85% in one of the recent case studies presented by a retailer. However, there has been relatively little research on the placement of the items that are being marked down with the often yellow stickers. Where is it best to place these yellow stickered products? Do you place the markdowns in the aisle alongside full priced products, or keep them in the same aisle / bays as the full price products but place on the bottom shelf or alternatively, like in the picture, move them to a special dedicated location within or at the end of the aisle. And if so, for what reasons are you making these choices? To maximise the markdown sell through rate? to manage the cost of labour? or grow the profit margin, by reducing the impact on the sales of full price substitutes? Or is there a marketing and brand reputation reason that the business is looking to achieve via the placement strategy? A new research study has been commissioned and is being by Professor Sarah Martins and she will present the research study to the food waste working group and with a request to retailers for help with the research and data on the impact of these different placement options. The presentation and discussion is planned for March 20th and f you would like to join that meeting, please click here to register. In the meantime, we need your help in completing a simple one question survey that asks you please share where you currently display markdowns / yellow stickered products in your stores. It should take less than two minutes, to complete and it is best taken on a personal device Vs laptop. The link is below. Thank you very much for your help.

Store Colleague Donations: Key Learnings

In February, we hosted an online discussion on the case for, and the case against, donating unsold food to store colleagues. Ahead of the meeting, we had invited retailers to share their current policy via an online survey. We received replies from 37 retailers, from USA, Canada, UK, Europe, Middle East and Australia / New Zealand. From this sample of 37 retailers. there were 10 (27%) who shared back that they had such a scheme, leaving 73% sharing that they did not have such a scheme. The meeting, attended by over 40 different retailers, started with a presentation from a UK retailer who started their store colleague donation scheme in 2017. Their presentation highlighted both the benefits and challenges of implementing such initiatives, and the discussion that followed was informed by this retailers learnings and the differences between their respective operations. Below, we explore the arguments for the case for and the case against donating unsold food to store colleagues. The Case for Store Colleague Donation Programmes Food Waste Reduction & Redistribution Efficiency Store colleague donation programmes provide a cost-effective and agile means to redistribute surplus food, reducing waste significantly. Their model ensures that food is offered to store colleagues only after charities have had the first opportunity to collect donations. This hierarchical approach prioritises external donations while still preventing food waste within stores. This model retailer is donating, on average, 15% of their unsold food to colleagues. Operational Cost-Effectiveness Compared to other exit routes, such as charitable donations or disposal through animal feed, colleague donations are the cheapest option, involving minimal additional labour. This retailers process integrates with existing markdown procedures, requiring no extra handling time for staff. The company has fine-tuned its system to ensure efficiency with minimal disruption to store operations. Improved Employee Engagement & Well-being The programme is seen as a valuable employee benefit, allowing workers to access surplus food free of charge. This initiative supports staff, particularly those on lower wages, and contributes to their financial well-being. The retailer has also extended the donation programme to "family and friends" doubling the number of families that can benefit from free unsold food. Their employee feedback has been overwhelmingly positive, with many describing it as one of the best benefits the company has introduced. Scalability and Adaptability The retailer demonstrated how its donation programme can be adapted for seasonal changes (e.g., Christmas, extreme weather) and scaled across different store formats. The system's flexibility allows the retailer to adjust donation times and prioritise redistribution when charities cannot collect food, such as during public holidays or extreme weather. By way of example, a recent extreme weather incident lead to 150 of their stores being forced to close for 24 hours, with no charities collecting, the presence of their store colleague donation programme ensured that they were able to maximise the redistribution of unsold food to humans. Use of Technology for Security & Compliance The integration of the colleague discount card into the donation process, where every item donated is treated as a "sale" and scanned at the POS, ensures the full traceability of the free unsold food items distributed. There is an automated system to flag irregularities and prevent potential abuse, such as excessive food collection by employees. This real-time monitoring helps store managers investigate suspicious activity while maintaining fairness in the distribution process. The Case Against Colleague Donation Programmes Potential for Fraud and Abuse Several retailers, cited concerns about theft and employees manipulating markdowns to benefit from free food. The model retailers early iterations of the programme encountered similar issues, prompting the introduction of stricter controls and automated tracking via employee discount cards. Tax & Legal Implications Some U.S. and UK retailers, expressed hesitation due to uncertainties around taxation. There were concerns that free food for employees could be classified as a taxable benefit, potentially leading to financial implications for both the employer and staff. The model retailer clarified that their system operates below taxable thresholds, eliminating this issue. Perceived Employee Hierarchy Issues Some companies worry that prioritising employees for food donations could be perceived negatively, particularly when charity donations are insufficient. In some cases, there was resistance to the idea that colleagues should receive leftover food rather than external beneficiaries. Implementation Complexity While the retailers system is automated and integrated into store operations, other retailers noted that they lack the technological infrastructure to implement a similar model. Manual processes are more prone to inefficiencies and abuse, making large-scale adoption more challenging. Cultural and Market Differences The discussion revealed that while the retailers model is effective in the UK, adoption in other markets varies based on cultural and regulatory differences. Some U.S. retailers, for example, are still exploring the feasibility of implementing such programs due to differing tax laws and internal policies. Takeaways The discussion underscored the point that store colleague donation programmes can be a valuable tool in reducing food waste, improving employee benefits, and maximising redistribution efficiency. However, successful implementation requires robust fraud prevention measures, clear policy guidelines, and technological integration, to the POS and employees discount card for example. The model retailers programme, refined over nine years, serves as a benchmark for other retailers looking to develop similar initiatives. Retailers considering such programmes must balance the benefits with operational, legal, and ethical considerations to ensure sustainable and fair food redistribution policies.

Design Challenge Competition: New Ways to Stop Products from Being Stolen, with the Planet in Mind

The theft of high-value, easy-to-conceal products is a persistent and growing challenge for retailers. While bulky packaging and locked displays may deter some shoplifters, they’re far from eco-friendly and frustrate genuine shoppers. To tackle this, we’re announcing a new product packaging design challenge with the Design Against Crime team at the University of the Arts London’s Central Saint Martins. This design competition with students builds on our previous successes, like last year’s project to tackling losses, frustrations and poor customer experience at the self-checkouts With the EU Green Deal setting ambitious waste-reduction targets, many traditional theft deterrents are no longer viable. Brand owners and retailers need to think differently. The students from Central Saint Martins’ BA Product and Industrial Design course will take on the dual challenge to innovate packaging and protection that doesn’t harm the planet. From our previous challenges, we know their innovations will be practical, creative, and inspiring for the industry. A legacy of creative problem-solving In 2024, we worked with Central Saint Martins to reimagine self-checkouts, yielding imaginative concepts like CCTV avatars and queue management lighting systems We also worked with UAL previously in 2020 on research to Improve Scan Accuracy Through Design. That resulted in 20 design concepts to tackle known problems at SCO. These projects highlight how young designers, working alongside industry professionals can address both human behaviour and technical challenges in retail crime prevention. Be part of our 2025 challenge! This year’s competition kicks off on February 20th, 2025, at Central St Martins in London. Students will get a full briefing from retail experts, sustainability specialists, and academic leaders. Retailers and brand owners will join us for this kick off to offer their insights, share challenges, and witness the start of what promises to be another ground breaking project. If you would like your business to be involved in some way, be that taking part in the briefing, offering feedback, joining us for the finale, and engage with the creative minds of tomorrow, please send me an email @ colin@ecrloss.com

HOT NEWS: Announcing the Top 30 e-Commerce Loss Innovations for 2025

The world of e-Commerce continues to evolve faster than ever before. In the two years since our last e-Commerce Loss Innovation Challenge, the landscape has again shifted significantly. Retailers and suppliers have embraced new technology to tackle some persistent challenges, but at the same time, new threats and areas of focus have also emerged. ECR Retail Loss is pleased to announce the Top 30 e-Commerce Loss Innovations for 2025, selected from a 100+ shortlist by a panel of retail digital loss prevention experts from ten global brands, including Frasers Group, Gap Inc, The Hut Group, M&S, Next, Walmart and Wayfair. What’s Changed Since 2023? Certainly not the four focus areas: Pre-delivery, fulfilment, returns and logistics. However, over the last couple of years we have seen a growth in innovations which set out to tackle issues like: Promotional and Gift Card Scams Innovations like 3-D secure have made massive inroads in reducing these sort of scams Payment Fraud & Account Takeovers Still a huge issue, particularly as groups of bad actors are working together. Retailers are also trying to find technologies which help them get the right balance between blocking legitimate sales and picking up the ‘cues’ that an order might be fraudulent. Internal Theft Increasingly from retailers or logistics partners Logistics Challenges Losses during logistics continue to frustrate retailers. Determining responsibility remains complex, with few effective solutions in the market to date. Fulfilment Retailers are increasingly proactive in tackling loss prevention between the point of sale and delivery. We have seen a notable rise in demand for solutions addressing payment fraud, account takeovers, and identity verification—reflecting a shift towards preventative measures. Returns With the ongoing complexities of reverse logistics, interest in tackling fraudulent returns, counterfeits, and non-saleable items (both malicious and non-malicious losses) has surged. Retailers are looking for smarter ways to manage the high volume and complexity of e-Commerce returns. The 2025 Top 30: Driving the Future of Loss Prevention The innovations on this year’s shortlist represent the most relevant, as rated by the retailer judges, innovations in e-Commerce loss prevention. From AI-driven fraud detection to blockchain-based supply chain solutions, these initiatives were rated chosen for their potential to make a meaningful impact on day-to-day operations. Join Us for the Finale On March 26, 2025, ECR Retail Loss will host the online e-Commerce Loss Innovation Challenge Finale, where the top 10 innovators will pitch their solutions to a panel of retail judges and industry peers. Don’t miss this opportunity to see the future of loss prevention in action. Click here to view the full list of the Top 30 innovations Register now to attend the finale and be part of the conversation shaping the future of e-Commerce loss prevention. Together, let’s tackle the toughest challenges in e-Commerce and drive meaningful change for the industry.

1of4

FOCUS AREAS

The research priorities are determined by its members – they drive the agenda to ensure ECR delivers research that meets the need of the industry bringing new insights, tools and techniques that enables retailers to sell more and lose less.