Integrated Strategies for Mitigating Stock Shrinkage in Retail Enterprises

Abstract

This study provides a critical analysis of the effectiveness of the strategies for managing the multidimensional nature of stock shrinkage in the contemporary South African retail enterprises. While using a qualitative research method, a meta-synthesis of different core theories on the strategies for managing stock shrinkage in a retail setting was undertaken and triangulated with the approach for managing stock shrinkage in the South African retail enterprises. Findings indicated the effectiveness of the process for mitigating stock shrinkage among retailers to be fraught by poor enforceability of laws against prime sources of stock shrinkage such as fraud and theft by customers, employees, supply chain crews and criminal shoplifters. Results of the analysis also revealed the reliability of in-store security technologies like sensormatic and video surveillance cameras is inhibited by employees’ conspiracies and involvement in activities that cause stock shrinkage. Sadly, it was found that most of the existing theories and practices in the modern South African retail enterprises exhibit only reactive and piecemeal approach to managing stock shrinkage. This paper fills such a gap by postulating a more proactive integrated framework of strategies emphasising the need for managers to consider stock shrinkage as part of the enterprise-wide risk management framework. Other strategies in the framework articulated the essence for improving the remuneration of retail employees, synchronisation of human and technological intelligence systems, and undertaking corporate social responsibility to reduce the emergence of criminal gangs involved in shoplifting.

Keywords: integrated strategies; mitigating stock shrinkage; performance