Picture it: a hot summer day walking through Harvard Square in Cambridge, Massachusetts. Suddenly, an icy taste runs through your body, surprising you with how unexpected it is. You turn and look to see the double doors of a fashion clothing store flung wide open on a hot summer day, fresh air pouring from inside. He soon learns that this is the normal, everyday practice of this business. Simple math suggests that the (fairly large square foot) store was losing hundreds or dollars a week, if not a day. If you think this is an isolated incident, keep your eyes and ears open, and I promise you will eventually believe that this is not an isolated incident and, in fact, it is common!
I often hear trading and stock market reports describing how competitive the retail landscape really is. I don’t doubt this, but what seems doubtful to me is the sense of urgency to remain competitive. I have seen too many cases of companies losing money by making irrational decisions. Here are some examples. As a citizen of Ohio, I usually only needed to be within 10 feet of the never-locked entrances of several local Walmarts before the heat blowing in from inside thawed me out. More recently, my local supermarket had a RedBox kiosk near the checkout that, in the winter, required my wife and I to run because the checkout door never locked. I have been told by family and friends who have worked for clothing retailers and electronics stores that the amount of theft perpetrated by other employees and management ranged from several thousand to more than $100,000 per month.
Anyone who pays their own bills should be surprised that not only do these events happen frequently, but it seems that employees and/or management don’t seem all that concerned about these events. I often wondered why the doors on these shutters were never closed or better security measures put in place to prevent thousands of dollars worth of theft. These solutions are not similar to those performed during brain surgery and as such suggest to me that employees or management simply don’t care because it’s not their money. So every time I hear that the margins are skinny, I laugh and wonder “HVAC, employee theft, or employee indifference?” Who knows? Maybe my innovative and revolutionary solutions, like requiring doors to be closed in summer or winter, will land me a vice president position at some major retailer!