December 28, 2004, 12:00 AM

Chase-Pitkin fights shrinkage and big-box rivalry with web-based analytics

Chase-Pitkin Home & Garden, a chain of 15 home improvement centers based in Rochester, NY, is using a new web-based analytics system to pick out the SKUs most susceptible to shrinkage. It’s already saved $600,000, it tells Internet Retailer.

 

Chase-Pitkin Home & Garden, a chain of 15 home improvement centers based in Rochester, NY, is using a new web-based analytics system to pick out the SKUs most susceptible to shrinkage. It’s already saved $600,000, CFO and controller T. Christopher Dorsey tells Internet Retailer.

Chase-Pitkin, a century-old retailer serving upstate New York, operates with 2,500 employees and 15 stores each carrying from 39,000 to 42,000 SKUs. Competing with national chains like The Home Depot Inc. and Lowe’s Inc., Chase-Pitkin, a unit of Wegmans Food Markets Inc., takes advantage of ways in which it can leverage technology to give itself a competitive edge, Dorsey says.

One of those ways, he says, is with a new inventory analysis tool from Chicago-based SPSS Inc. that helps Chase-Pitkin sift through thousands of SKUs to focus on the ones most susceptible to theft or other forms of shrinkage.

Chase-Pitkin deployed the SPSS system a year and half ago in an effort to significantly reduce the more than $4 million, or 2% of the company’s $200 million in sales, lost to shrinkage. So far, the system has reduced shrinkage by $600,000. “We reached payback on this system within the first year,” Dorsey says.

Dorsey attributes the success of the SPSS system partly to its ability to show data on product identifiers and financial records related to individual SKUs. In the past, he says, available financial information would only show sales related to product categories; the SPSS system breaks it down to show sales of separate SKUs, making it possible to for Chase-Pitkin managers to compare inventory counts with SKU-level sales data to identify specific SKUs in shrinkage. “We’ve found 16 items that represented more than 50% of shrinkage,” he says.

Once Chase-Pitkin identifies particular SKUs involved in shrinkage, it works to reduce losses by searching for the identified SKUs in back-room warehouse stock and by more closely tracking them as they move from warehouses to merchandise displays and POS terminals, Dorsey says. In the future, Chase-Pitkin will integrate the inventory analysis system with RFID tags to better track merchandise, he adds.

 

 

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