Interview: 7-Eleven Mexico striving for 'culture of loss prevention'

Convenience chain 7-Eleven Mexico is looking to grow its already considerable store estate across the country in the coming years, and is investing in new systems that can aid that expansion.

As the business expands, its key goals are to maintain a single view of inventory throughout its store network and to minimise shrinkage, and store operations director Hernando Zambrano told Essential Retail that companies such as WeDo Technologies are helping 7-Eleven Mexico "see problems faster and act upon them faster".

This week sees the retailer deploy WeDo's RAID 7 business control software across its store estate (approximately 1,900 shops in total) allowing the company to monitor inaccuracies in its inventory before they can cause an impact on the bottom line. 7-Eleven has been using the system in a sample selection of its stores since January, but is already confident that it can support the wider in-house loss prevention team in identifying and documenting problems more efficiently.

Zambrano commented: "It's been helping us a lot – increasing the speed in which we realise something has happened.

"One of the reasons we went with WeDo is because our loss prevention is embedded in the operation. We have a very small loss prevention department, but we want to create a culture of loss prevention across the company.

"We used to have a tool that would alert us to a problem but there was no follow-up or documenting, and at the end of the day no-one was doing anything with those alerts. It was just a waste of time."

The WeDo software is helping the 7-Eleven Mexico loss prevention team focus on different things, while the case management part of the package encourages the department to document issues and ensures action-points are followed up.

Zambrano says that his company is "in industry parameters" when it comes to shrinkage, but argues that "every retailer wants their shrinkage to go down", especially now that many of them are selling electronic products, which have a much greater impact on margins if they go missing.

The 7-Eleven Mexico stores also sell gift cards of significant monetary value, while customers also use the stores for other services such as depositing money into their bank accounts – both factors in the retailer's decision to increase investment in loss prevention technology. In addition, many of the company's stores have small staff headcounts, and new systems such as WeDo's RAID can help inform employees that their actions are being accounted for.

"We need tools that help us analyse what's going on in stores," Zambrano explained.

While loss prevention is a key target for the entire industry, other challenges 7-Eleven Mexico is facing are perhaps more unique to businesses growing at pace and on a large scale.

Although approaching 2,000 stores, the retail chain still only operates in 11 of the country's 32 regions – and there are plans to enter more territories in the coming year. Zambrano acknowledges that the business outgrew its previous supply chain system sometime ago and has spent the last two years implementing Oracle Retail's infrastructure.

Fine-tuning is still required, as is often the case with such major infrastructure projects, but the retail operations director is confident that the business is now positioned for further growth thanks to this major investment.

"We now have inventory of stock in every store and the capability of segmenting prices across the company – we can be more productive or aggressive where we need to be," he explained.

"We needed to migrate to something more robust as we have close to 1,900 stores in Mexico, and we've been growing at around 15% per year for the last ten years. We are looking to continue at that pace; we recently opened in several new markets in Mexico and we want to grow a base of stores in those areas."

Zambrano's 23-year career at 7-Eleven has seen him hold a variety of roles, including in construction, merchandising and general operations.

For now though, he is primarily responsible for loss prevention, security, logistics and quality assurance, and he believes the challenges in keeping shrinkage rates down are greater now that electrical products such as computers and smartphones are more readily available in a multitude of stores.

He said: "Every different business model has different challenges, sometimes it's organised crime and for others its internal. Internal theft is something we all need to work with, especially with the new products on offer.

"Several years ago computers were in several dedicated IT stores, but now you can buy these products in supermarkets – the risks retailers have now are different. We need to take care of the outside threats but something common for all of us is the problem of internal theft, and we need to make the disciplines and improve the behaviour of employees to keep good numbers [avoid shrinkage].

"Training has to be conducted properly and whenever people do something wrong we need to see it fast, act fast and have consequences."

The new technology and systems being integrated by 7-Eleven are evidently helping the company achieve this target, and Zambrano and his team will be looking to use them as the business continues its growth journey across Mexico.

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