Richard Laucks' bottom line: Security efforts increase revenues at ShopKo Stores

Sep 1, 1997 12:00 PM, GEORGE PARTINGTON

"The retail world is one that changes at light speed, and the loss prevention area in retail is the same way-continual new threats," says Richard Laucks, vice president of loss prevention for ShopKo Stores Inc., Green Bay, Wis. Laucks oversees security for all of ShopKo's 130 stores, distribution centers and corporate offices. The company's retail outlets, which compete with stores such as Kmart, Wal-Mart and Target, are located in the Upper Midwest, Mountain and Pacific Northwest regions.

Although Laucks is an officer of the company and part of the corporate management team, he is never far from where the action is-the selling floor. He travels to the stores as often as he can, he says, to learn what the issues are and find out what he can do to help. He says "if you get distanced, you miss some things," and he works hard to encourage "upflow of information, and a lot of innovation. If there are any trends toward the negative, we try to get after it right away."

"What is unique about Rich is that he is not strictly a leader within the loss prevention area; he is also a leader within our store operations area," says Doug Bergan, who works for Laucks as a loss prevention regional manager. Laucks says security must tie carefully and directly into a company's vision and support the company's mission to create assets for shareholders.

Measuring success

Laucks measures his success with hard numbers. "We have a lot of measurables we try to keep on top of all the time with respect to our shrink numbers, our trends and cash loss and so on," he notes.

The term "shrink" is key in the retail industry. It refers to loss of merchandise through theft, damage and negligence. Laucks encouraged each store to focus on shrinkage and to better understand its causes by forming the Shrink Reduction Committee. They set about educating store management, even producing a training video on the subject. They gave store managers a shrink percentage-to-sales goal. By 1995, ShopKo had reduced shrink to 1.22 percent of sales. The goal for fiscal 1997, which ended in February, was 1.02 percent, but with the concerted, companywide effort, shrinkage was reduced to 0.87 percent of the $2.5 billion in annual sales. "Any time you are at 1 percent or lower, it is successful," says Bergan.

The success is also due to Laucks instituting a salaried loss prevention manager position at each store, says Bergan. Like other store managers, they are now on a bonus program and participate in general management decisions.

Cops and robbers

In 1970, after graduating Michigan State with a degree in criminal justice and a masters in management, Laucks began work as an investigator and supervisor for a large department store in Detroit. "It was a time when loss prevention was just starting to evolve," he recalls. "It was a real cops and robbers approach."

Laucks says security had little say in management decisions: "Everybody else decided what was going to be done in the building, and it was our function to catch all the bad guys." He recalls the time when the store was having a sale on an attractive household item: "They just put these things out in an area where they were prone to theft. We tried to get them to do something different, but it was unheard of that we could influence them." After the sale was over, they had sold 20 pieces and lost 200.

Two years later, Laucks was hired by Cleveland's Forest City Enterprises as director of loss prevention. A multi-division corporation, Forest City operated home center stores, as well as property management and construction businesses, but they have since divested their retail holdings.

More successes

Laucks came to ShopKo in 1981 as director of loss prevention, and was promoted to vice president of loss prevention in 1989. His career at ShopKo has featured many highlights. In 1986, he was influential in the enactment of Wisconsin's retail theft civil recovery law, and he designed and implemented ShopKo's in-house theft recovery program. The program has returned $5.6 million to ShopKo stores, including $1.1 million last year.

Under the recovery system, ShopKo mails a letter to apprehended shoplifters. The letter asks for monetary compensation for damages, which, under the law, is determined by the value of the merchandise. With a new computer network instituted by Laucks, shoplifting reports are downloaded to corporate headquarters within 24 hours. The civil recovery letter is mailed the same day, generating better response rates. And the reports provide a database for analyzing shoplifting trends.

Customer-friendly technology

"Good loss prevention is a marriage between good technology and good people," says Laucks. ShopKo uses electronic article surveillance, CCTV and improved lighting to protect people and property. The equipment can provide security without making a store into a "closed environment, a law enforcement environment, an unfriendly environment," says Laucks. "We try to stay as customer-friendly as possible and be a little more subtle in some of the security things we do. A real compliment from a customer is to tell me that they have shopped in our store for years and never realized that we have security. That means we are not obtrusive."

A few ShopKo stores, located in areas with higher than average crime rates, call for a greater focus on premise security. Laucks pioneered an arrangement with local police that allows ShopKo to hire officers to work part-time during their off-duty hours. The policemen are allowed to wear their uniform and sidearm and exercise all of their jurisdictional responsibilities.

"Rich has always been very responsive to the concerns of associates and customers," says Bergan. "The police program was a direct result of the customer saying, 'I really don't feel comfortable coming into your store at night'."

People person

Laucks, who has two grown daughters and lives in Green Bay with his wife, Jennifer, knows that combating crime starts with community involvement. He and his wife volunteer their time to the local Family Violence Center, which serves as a shelter for battered women and children. Over the years, they have helped raise money with events such as a bicycle ride, charity auction and telethon.

Laucks initiated a company-wide program that has loss prevention managers visit elementary schools to talk to the kids about the world of retail security. "If you take a long-haul, proactive approach to loss prevention in the retail world, you have to get to the youngsters," explains Laucks. The children, usually third and fourth graders, learn about the ramifications of shoplifting. "We feel we can make some impact," says Laucks. Besides, he notes, "the world of loss prevention can sometimes be purely negative. It is a great, uplifting thing to take a morning to go out and talk to a bunch of third and fourth graders. It is a positive experience and well worth it."

The loss prevention vice president is also active in ASIS and is a former chairman of the IMRA Loss Prevention Council. When he isn't golfing, cross-country skiing or running, Laucks enjoys cooking and Green Bay Packers games. He says the return of the glory days for the Pack was only a matter of time, once the front office got its act together. "The key is to get a good organization and then get the right players in place, and then it starts," he says.

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© 2008 Penton Media Inc.

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