The White Company cuts shrinkage by 38% with identification technology

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The White Company: cutting shrinkage

The White Company: cutting shrinkage

The White Company, the specialist retailer of homewares and clothing, reports it has seen a 38% reduction to shrinkage levels since it invested in identification technology from supplier Zetes in March 2011.

One of the country’s fastest growing homewares retailers, The White Company has 40 stores, with further expansion planned. The company claims it made the decision to implement Nucleus IS-Stock Audit because stock audit integrity was becoming a problem for the business and shrinkage levels of high value items were a concern.

Prior to implementing Nucleus IS-Stock Audit from Zetes, The White Company outsourced its bi-annual stock auditing to a third party specialist.  While this strategy was acceptable when the retailer was much smaller, because audits were managed separately from the rest of the business, it was not possible to investigate issues quickly and store level accountability was low, the company said.

“We made a commercial decision not to continue with the original outsourced model due to concerns the integrity of third party stock counts was having a detrimental effect on the business since it was so detached from the rest of store operations,” said Colin Blake, head of loss prevention at The White Company. “It was clear we needed to bring stock auditing in-house with specialist technology and expect to see fantastic cost savings using Nucleus.”

To equip the company’s two new full time audit specialists, The White Company has purchased Nucleus IS-Stock Audit, software solution developed by Zetes, with 16 Motorola hand held terminals split equally for use in the north and south of the UK.  

“We reviewed other solutions but Nucleus IS-Stock Audit was head and shoulders above other products and I knew it would deliver exactly what we needed,” said Blake. “The system is very thorough about detecting mismatches and gives us the integrity of results we need, available the same day a count takes place.”

The White Company has estimated since implementing Nucleus IS-Stock Audit in March 2011, shrinkage levels have decreased by 38% and the system will have paid for itself within a year. 

“We were finding stock reported in a third party count as missing would then subsequently turn up in the store, a problem that occurred purely because third party auditors cannot be expected to know the individual stock items well enough to always count the right things,” said Blake.

In addition to improving accuracy levels, in-house auditing is faster and being directly involved with the process has made store management more accountable because they are closer to the process, said the company. The White Company added as a result of implementing Nucleus IS-Stock Audit, it also seen an additional benefit of improved operational compliance levels after identifying a pattern between lower stock auditing accuracy and generic compliance as a whole.

“It is always difficult for retailers to weigh up the pros and cons of outsourcing stock auditing to a third party because external auditors don’t possess the same level of product knowledge as an in-house sales team,” said Andrew Southgate, joint managing director of Zetes UK.  

“Using internal sales staff means they spend slightly less time on the shop floor while the process is underway, but accuracy is much higher because they know exactly what to count and retailers can then benefit from the associated sales uplift.”