Wal-Mart Safeguarding Tangible Assets with Intangible Deterrents…

Michael D. Moberly, Principal, Founder kpstrat and ‘Business Intangible Asset Blog – Business Intangible Asset Strategies and Risk Mitigator

This post offers an early perspective of Wal-Mart’s transition from a family owned – overseen local – regional retailer and its founder’ (Sam Walton’s) stewarding – supplying – staffing 270+/- stores in the mid-1980’s.

Coincidentally, at the time, I had the good sense – good fortune to execute an opportunity to develop – teach a ‘private security’ course in a university.

Private (business – corporate) security was in its early stages of development, i.e., articulating functionality – materiality across sectors.

The ‘evidentiary need’ for business leadership to commit to building-funding-directing an internal entity focused on safeguarding tangible – physical assets was relatively new, aside from…

  • companies whose focus is to engage defense – national security projects, and/or
  • retailers concerned with shoplifting, ala ‘inventory shrinkage’.

Then, internal (private – business specific) security units were largely considered ‘a cost’ item…

  • absent a clear strategic need or objective means to measure contributions, benefits, and/or ROI (return on investment) near-term and overtime.

In circumstances in which there was a clear mandate, (contractual – public – risk), security considerations often emerged as some variation of this decisional criteria, unless risks – threats were materializing, and/or tragedy struck, do the minimum’.

For most retailers and suppliers they relied for tangible – physical products to sell,shoplifting – theft, and/or inventory shrinkage were persistent problems…

  • which posed varying degrees of $ loss, which may – may not translate to urgency (providing either were calculated), or
  • deemed to warrant mitigation which may include hiring dedicated staff to apprehend wrong doers, not-so-much prevent, deter, or mitigate risks.

This brings readers to Wal-Mart’s decision to (a.) retain its entry – in-person greeting message, ala ‘welcome to Wal-Mart’, (b.) introducing ‘in-store ceiling’ CCTV units, in its second generation (newly built, still largely rural) locations, as (c.) Wal-Mart was expanding regionally to 300+ locations.

I learned that Sam Walton’s ‘decision point’ to develop enterprise-wide – in-store ‘loss prevention units’ would be based on if-when Wal-Mart’s (overall) inventory shrinkage rose to 3%.

Calculating those once elusive ‘numbers – percentages’ was made more straightforward – evident with the development – widespread application of (a.)  ‘bar codes’ affixed to products-for-sale, and (b.) the associated technology being introduced at retailers’ points-of-receiving and sale.

Obligatorily, the introduction – application of product-specific ‘bar codes’, prompted suppliers – retailers to move beyond the conventional, e.g.,

  • ‘I am pretty sure I ordered this product, and I recall receiving – stocking this product, but I have limited evidence of actually – selling that particular-product to customers, therefore,
  • any discrepancies must be due to ‘shoplifting’ and/or variations of ‘internal theft’, which retailers euphemistically refer to as ‘inventory shrinkage’…

Entering a Wal-Mart, during this period when CCTV was being introduced to each-of-its location, and, in-close-proximity to each stores’ human greeter, was a TV screen in which customers ‘could see themselves’.

The perspective was, the combination of (a.) a ‘personal greeting’, and (b.) ‘seeing oneself on camera’ would (c.) alert shoppers to the presence of CCTV.

  • this combination was decidedly deemed to represent ‘general and individual – (intangible) deterrents’ to shoplifting and internal theft by employees.

More coming on the business-side of intangible assets…

The ‘Business Intangible Asset Blog’ is experientially-researched, written, and produced by Michael D. Moberly, to provide perspectives, insights, and additional and sometimes alternative perspectives to readers, ala business leaders, management teams, boards, and investors, etc., to aid in identifying, distinguishing, assessing, valuing, safeguarding, and lucratively – competitively utilizing -applying their ‘mission essential’ intangible assets. 

Readers are-encouraged to review and comment on this, and other posts wherein arrays of issues related to business things intangible are authentically and practically conveyed.


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