Case study: Jaeger uses data mining to reduce losses from crime and waste
Case study: Jaeger uses data mining to reduce losses from crime and waste
Leg of lamb is the most stolen item at Iceland. Thieves also like cheese, bacon and coffee. With the UK in recession, shoplifters appear to be switching their sights from alcohol, electric toothbrushes and perfume to food. Tesco, Marks & Spencer and Iceland have all reported an increase in shoplifting since the economy began to contract in the second quarter of 2008. Tesco alone caught some 43,000 would-be thieves in the first half of 2008, up 36% from the same period in 2007.
The impact of the recession on retailers is yet to be reflected in any of the major surveys of shoplifting. The Centre for Retail Research's Retail Theft Barometer only has figures up to the end of 2007. Those figures show that shrinkage - losses from crime and waste - cost retailers 1.3% of sales in 2007, down from 1.34% in 2006. Even though 2007 was the peak of the boom, the losses were still huge. Customers stole some £1.6bn and employees another £1.3bn. Suppliers took £209m fraudulently. Some £73m was lost through card fraud and another £39m through robberies or burglaries. Retailers lost £666m through waste. The systems and security guards intended to reduce losses cost £785m. The total bill was £4.6bn.
Retailers have used a variety of technologies to reduce their losses. Closed-circuit television (CCTV) and electronic article surveillance (EAS) - the tags attached to individual items - are all visible in stores. Some retailers, however, are using a different type of technology to reduce losses: data mining.
During the summer of 2008, British clothing chain Jaeger went live with a data mining application in an attempt to identify where it was losing money. The application, which is located centrally, interrogates data held on different systems throughout the business, including both the head office and the company's 90-plus stores and concessions.
In common with every other data mining application, Jaeger's
Leg of lamb is the most stolen item at Iceland. Thieves also like cheese, bacon and coffee. With the UK in recession, shoplifters appear to be switching their sights from alcohol, electric toothbrushes and perfume to food. Tesco, Marks & Spencer and Iceland have all reported an increase in shoplifting since the economy began to contract in the second quarter of 2008. Tesco alone caught some 43,000 would-be thieves in the first half of 2008, up 36% from the same period in 2007.
The impact of the recession on retailers is yet to be reflected in any of the major surveys of shoplifting. The Centre for Retail Research's Retail Theft Barometer only has figures up to the end of 2007. Those figures show that shrinkage - losses from crime and waste - cost retailers 1.3% of sales in 2007, down from 1.34% in 2006. Even though 2007 was the peak of the boom, the losses were still huge. Customers stole some £1.6bn and employees another £1.3bn. Suppliers took £209m fraudulently. Some £73m was lost through card fraud and another £39m through robberies or burglaries. Retailers lost £666m through waste. The systems and security guards intended to reduce losses cost £785m. The total bill was £4.6bn.
Retailers have used a variety of technologies to reduce their losses. Closed-circuit television (CCTV) and electronic article surveillance (EAS) - the tags attached to individual items - are all visible in stores. Some retailers, however, are using a different type of technology to reduce losses: data mining.
During the summer of 2008, British clothing chain Jaeger went live with a data mining application in an attempt to identify where it was losing money. The application, which is located centrally, interrogates data held on different systems throughout the business, including both the head office and the company's 90-plus stores and concessions.
In common with every other data mining application, Jaeger's