EDITOR'S NOTE: Dennis Wamsley is the director of loss prevention and safety for Publix Super Markets, Inc. He is a 2010 recipient of Publix President's Award, which recognizes his commitment to diversity and leadership. Prior to joining Publix in 2005, he served in numerous managerial roles in both loss prevention and operations at Kmart Corporation.
Wamsley serves on RILA's loss prevention steering committee, where he is vice chairman, and is a member of the board of advisors to the Loss Prevention Research Council. He is the chairman of the Florida Retail Federation's law enforcement officer-of-the-year selection committee and is a member of the Florida Police Chiefs Association. Wamsley is a graduate of Montana State University.
EDITOR: How did you get started in loss prevention?
WAMSLEY: My first introduction to the grocery industry was the general store my dad owned in the small Montana town where I grew up. After college I started in retail as a management trainee at S.S. Kresge Company, which later became Kmart Corporation, and worked my way up to assistant manager, store manager, district manager, and then regional manager. One day I got a call asking me to come to headquarters and become director of loss prevention. My first reaction was, "You have got to be kidding me. Why would I do that? Why me?" They told me that they were making changes and thought that I would be good for the department. You don't really say "No" to a request like that.
EDITOR: How did you manage the transition from the operations side to the LP side?
WAMSLEY: Coming from operations, I was already involved with my loss prevention team at the store level. But in those days the involvement was really asking, "How many shoplifters are you catching?" Today, that atmosphere has certainly changed, and rightfully so. But, as an operator, I didn't know exactly what the LP group did, and the LP group didn't really have a good understanding of what the operating group did. So, I found out that we were really doing a lot of the same things, but we were just doing them independently of one another. It really made sense, and it was a good move on the leadership of Kmart's part to put an operator in there because we could create some really good synergies, get a lot more done, and have a lot more success if we worked together.
|All of our associates share in stock each year, so the feeling of ownership definitely contributes to our mission as a company to provide premier service. On the LP front we always try to frame everything around helping the stores prevent and reduce their losses, without having any impact on customer service, without any impact on the quality of the merchandise or the selection of the merchandise.|
EDITOR: And when did you make the move to Publix?
WAMSLEY: My first day was April Fools' Day 2005.
EDITOR: Talk a little about the founder of Publix, and the culture he created in the company.
WAMSLEY: Publix was founded in 1930 by George Jenkins in the midst of the Great Depression, which was a pretty bold move on his part to open a store in that economic environment. The attitude and approach that made him successful then are as important today as they were more than eighty years ago. Our mission statement sums it up nicely: "In order to be the premier quality food retailer in the world, we have to be passionately focused on customer values; we have to be intolerant of waste; and dedicated to the dignity, value, and employment security of our associates. We are devoted to the highest standards of stewardship for our stockholders, and involved as responsible citizens in our communities." Today we are a big company with more than 1,070 stores in five states. So, to live up to that mission statement, we have to be quality focused.
EDITOR: How does being a privately held company impact the LP mission?
WAMSLEY: All of our associates share in stock each year, so the feeling of ownership definitely contributes to our mission as a company to provide premier service. On the LP front we always try to frame everything around helping the stores prevent and reduce their losses, without having any impact on customer service, without any impact on the quality of the merchandise or the selection of the merchandise. We don't have EAS systems. Although we studied EAS, it didn't fit with our customer-service culture.
EDITOR: When you arrived at Publix, what were some things that you saw early on that you felt you could change to make an impact on the LP program?
WAMSLEY: My first focus was on shrink numbers. While we were a successful company, there were things we could do better. There was still money we were leaving on the table that we didn't have to. At that time there was also a lot of focus on the theft aspects of the loss prevention program. Everybody knows you can't catch your way to improved shrink results. So, we started to change the focus of the department from a reactive to a more proactive approach.
EDITOR: How have you organized the LP function within Publix?
WAMSLEY: We've followed the structure of our retail operations group. They currently have four divisions, and I have four divisional loss prevention managers who support those divisions. While they report directly to me, I tell them, "You may report to me, but you better be working for your divisional vice president." We have a fairly small field staff, which is indicative of the supermarket industry. Each of the divisional managers has four or five regional LP specialists who are assigned to forty or fifty stores. We also have four or five LP auditors in each division, who look at the operational aspects of the stores and specifically the policies and procedures that are designed to control losses.
EDITOR: How often do you perform audits in your stores?
WAMSLEY: It really depends on how they score. We use a weighted scored audit. If a store scores 90 percent, they're not going to see us as often. If they score below 80 percent, they will get a follow up probably within ninety days. If they score much lower than that, they will have a follow up within thirty days. It's all based on what the opportunities for improvement are in the stores. We focus on the stores with the greatest opportunities to improve.
EDITOR: I suspect your audit encompasses more than just a traditional LP audit to include operational and expense issues.
WAMSLEY: That is correct. We've even folded in a lot of safety questions. Both our loss prevention auditors and our safety specialist focus on raising awareness. If a department manager is scoring low on their LP audit, we're going to take the time to show them the right way to do things. And then we're going to follow up to see if they did them.
Nobody likes the term "auditor." People immediately think "IRS" with all kinds of negative connotations. We tell them that we're the type of auditors who are there to find money and put it back in their pockets. Going back to the fact that our associates are also shareholders, we can make the case that, "Look, not only is this going to help your store, but it's also going to help you and your fellow associates who are co-owners with you." In effect, we are really sales people. We're trying to sell our ideas to help them put more money in their pockets.
EDITOR: When you talk about shrinkage in food retailing, what goes into the shrinkage bucket that's different from traditional retail.
WAMSLEY: In traditional retail accounting, companies have products with established selling values. For example, you have a television that's valued at $297. If you lose that, you lose $297. That's the way we look at our non-perishable grocery items. But for fresh and perishable items, it's more complicated. Some items we bring in and convert to other products. For example, in the bakery you buy flour and other ingredients that you turn into bread, which is produced fresh in our stores each day. Because we're focused on delivering a quality product, we don't sell day-old bread. We don't sell reduced-price meat. If it's not fit to sell at full price to our customers, we're not going to sell it at all. So what's thrown away becomes part of the shrinkage numbers.
|Nobody likes the term "auditor." People immediately think "IRS" with all kinds of negative connotations. We tell them that we're the type of auditors who are there to find money and put it back in their pockets. Going back to the fact that our associates are also shareholders, we can make the case that, "Look, not only is this going to help your store, but it's also going to help you and your fellow associates who are co-owners with you."|
EDITOR: Is that product literally thrown away, or do you donate to food banks and organizations like that?
WAMSLEY: We do donate what we are able to through our perishable recovery program with Feeding America. But, for example, when you're donating something that requires refrigeration, the organizations that we're donating it to must have refrigerated transportation.
EDITOR: How do the donations affect shrink?
WAMSLEY: Donations are all counted as part of shrink, and that's the same for whether it's a grocery item or a perishable item. Really everything that we don't sell at full retail price is counted in the shrink numbers, which is probably a little bit unusual. The challenge becomes, "What's an acceptable amount to throw away at the end of the day," and "Can we save any money there without having a negative impact on sales, service, quality, or the selections that we insist on having?"
EDITOR: You said you don't have EAS, but are there other technologies that you have put in place at Publix?
WAMSLEY: First, we implemented an exception-reporting tool that integrates with our POS system that we can throttle up or down to identify specific cashier activities, whether it is coupons or cash shortages, that allow us to focus in on certain individuals where we could have dishonesty or simply a training issue.
Following that we looked at our CCTV systems, which were totally analog at the time. We switched over to digital video recorders. Now we're interested in pursuing IP technology for all of those systems so that we can eventually convert to remote monitoring. You're always fighting that new technology wave. The latest technology is always something better than what you have today.
EDITOR: Are there any other technologies you've taken advantage of?
WAMSLEY: Our organized retail crime [ORC] taskforce uses a mapping tool to identify losses and try to track the criminals who are involved. Using cameras you eventually get a picture of a face, you get a partial tag number, and you're able to do all kinds of things to then identify the criminals.
EDITOR: As a retailer with an ORC taskforce, how do you measure success and ROI on that investment?
WAMSLEY: We've had a lot of success in the five years that we've had our taskforce. But we can't measure success by recovery rate because normally you don't recover a whole lot of merchandise from these groups. Organized retail crime investigations take a long time to resolve. I think our average case runs between seven and eight months of investigative effort. We don't have a lot of people doing that. Each investigator is juggling seven or eight big cases that they're working on at all times. The one thing we can measure is arrests.
EDITOR: How many arrests have you had?
WAMSLEY: We only count arrests if they're fence-level people because boosters...the people who actually come in the store and take the product...are so easily replaced. If we make an arrest on a booster today, they're going to immediately have a replacement for that person, or that same person is going to be out of jail and back at it tomorrow, assuming they even go to jail. We try to use boosters that we catch to provide information on who they're selling to. If they have a bad enough criminal record and are looking at some serious jail time, we can often get them to assist us. But, to answer your question, I think the number of fence-level arrests we've had is 249.
EDITOR: That sounds like a big problem.
WAMSLEY: It is a big problem that represents a lot of money. We don't value the cases ourselves, law enforcement values them for prosecution purposes, and they have put the number somewhere around $250 million. So, we've had really good success.
We are also proud of the fact that we work well with other retailers because, really, we're never the sole victim in these cases. By combining efforts we can resolve cases a lot faster, plus you end up with a lot more evidence to present to law enforcement.
EDITOR: Over the years Florida has gained a reputation as a hotbed for ORC. Since you're based in Florida, but you're also in other states, do you find that to be true or not?
WAMSLEY: I do. Florida is probably our most active state in terms of ORC. And, even if it's not organized retail crime, other types of schemes, like credit card fraud, always seem to crop up in south Florida and then move north. But, we also see lots of activity in Atlanta and South Carolina.
EDITOR: What are the sorts of targets that ORC groups are going after in your stores?
WAMSLEY: Right now it's mostly the health-and-beauty items, especially razor blades. But this changes. You put one group out of business and your losses go down on one thing, but they pop up on another. We had a previous problem with infant formula. We actually put a lot of those criminals out of business and in jail, but we're starting to see that creep up again because it's a crime of opportunity. It's like any other type of business. Competitors in the underworld figure out, "Hey, this market is open. I'm going to take it over." Other targeted items include teeth-whitening products, high-end facial creams, and stomach aids. We do have people who target meat and seafood, particularly shrimp, but, usually those groups are not as large as those that are targeting the health-and-beauty products.
EDITOR: I understand you recently took over responsibility for safety, correct?
WAMSLEY: That's correct. I picked up responsibility for safety about two years ago.
|We've had a lot of success in the five years that we've had our taskforce. But we can't measure success by recovery rate because normally you don't recover a whole lot of merchandise from these groups. Organized retail crime investigations take a long time to resolve.I think our average case runs between seven and eight months of investigative effort. We don't have a lot of people doing that. Each investigator is juggling seven or eight big cases that they're working on at all times. The one thing we can measure is arrests.
EDITOR: What are a few of the initiatives that you've put in place that are having a positive impact?
WAMSLEY: We started with a safety department that knew what needed to be done, but was held back by a lack of manpower. So, we recognized an opportunity to combine efforts and get more people talking about safety company-wide. I try to equate safety to our focus on customer service. If someone gets injured in a store, that's not providing the best service. So, we've increased our focus on keeping both our associates and our customers safe.
EDITOR: How have you tackled associate safety versus customer safety?
WAMSLEY: It turns out it is a little bit easier to impact workers' comp incident rates than general liability. Since you have associates who are reporting to you, you can train them to do the right things. We can tell them, "We can't afford for you to be injured because you're too valuable to our operation. So, here are some things you can do to work more safely and make sure you go home at night feeling as good as you did when you came in this morning." Our workers' comp initiatives have made really good improvement so far.
But...and I think this is true if you look across the whole industry...general liability has been more challenging. The more litigious society becomes, the more people see it as an easy source of money. Still, we've seen those numbers start to turn downward, too.
EDITOR: Let me turn the discussion to your role as a leader in the industry over the last several years. Two organizations come to mind—the LPRC and RILA. Let's start with LPRC. How long have you been involved, and what is the value that you get from the organization?
WAMSLEY: I've been involved with the Loss Prevention Research Council for about five years and serve as a member of the board of advisors. I think that it's important for industry leaders to be involved in things like the LPRC and other industry organizations because loss prevention is really only successful when people band together to try to solve problems. I think the LPRC is unique in the fact that we get retailers and service providers together who are trying to solve the same problem. The atmosphere is such that it's really a collaborative effort. As opposed to having a vendor try to sell you their solution to a problem, the LPRC turns the table and says to the service provider, "Here's our problem." And it's not just one retailer, but several retailers saying, "We need a solution for this." So, the LPRC represents a number of retailers, large and small, from different retail segments, who have a common problem and work with multiple providers to find and quantify solutions.
EDITOR: The LPRC has something called "StoreLabs." Do you have any Publix stores in the StoreLab program?
WAMSLEY: We do have a store in the StoreLab program, where we pretty much let them test anything there they need. They tested having a camera on the Crest White Strips that would page the manager when the product was gone. We were involved in putting messages and lights on CCTV to see if that affects theft. We've also tested using public-view monitors on razor blades in conjunction with their research on keepers and other product-protection devices. We are also involved in the offender interview project where the LPRC researchers interview shoplifters who are caught to gather information on how they respond to LP efforts, why they steal certain items, who they sell to, and things like that.
EDITOR: You also are involved in the Retail Industry Leaders Association. What is your involvement with that organization?
WAMSLEY: I'm excited to be a part of RILA, where I was recently asked to be vice chairman of the LP steering committee, a role that I was happy to take on. At RILA I get to work with Lisa LaBruno, who I think a lot of, and the other fine people there. I also work with David Lund, who is the chairman for the next couple years. He's a very dynamic leader in the LP industry. Of course, I'm a little bit biased here, but I think RILA really puts on a good conference. Their events over the last two or three years have just been outstanding. One of the things that RILA does well, and there are many, is they try to be inclusive to the vendors by opening up sessions to them. This allows the vendors to go in and hear what's on the minds of the people who are potentially their clients. I think that's a positive for them, which they should get a lot of value out of, and in turn that is a positive for the entire industry.
EDITOR: Are you involved in any other organizations?
WAMSLEY: Five or six years ago the Florida Retail Federation asked me to be a committee member on their panel that selects a law enforcement officer of the year. Two years ago I became chairman of that committee. It is one of the highlights of my year to go to Tallahassee to review the many submissions that have been sent in by the various law enforcement agencies in Florida and help select the winners. My getting to present that award to these outstanding law enforcement officers at the Florida Retail Federation's awards banquet is truly the highlight of my year.
My Florida-based managers and I are also heavily involved with the Florida Police Chiefs Association. We attend their conferences and have developed very strong working relationships with that group. They're anxious to talk to retailers about what we can do to work together to help prevent problems. We very much appreciate that working relationship and will do anything to help that group out.
EDITOR: What other issues are these state associations involved with?
WAMSLEY: There's been a major move nationally to raise the felony level for retail theft. We work closely with the Florida Retail Federation and the Georgia Retail Federation to try to keep that number low.
EDITOR: Why is that?
WAMSLEY: Because right now if the felony level is $300, criminals know that threshold and will steal $295. If the
felony level was raised to, say, $1,000, they would steal $995 per stop. That would cause losses to retailers to go up dramatically. So, I think it is important for retailers to be involved at the state level on issues like this that can have a dramatic effect on retail losses.