Retailers Cutting Inventory Shrink With SPSS Predictive Analytics Software
Retail Shrinkage Spikes at Christmas Season
CHICAGO - December 15, 2004 - Major retailers are harnessing SPSS predictive analytics software to reduce inventory shrinkage through stocking, placement and monitoring of those retail items most likely to disappear. Retail shrinkage- a reduction in inventory primarily due to shoplifting and employee theft - spikes dramatically during the Christmas season.
While retail shrinkage has shown a long-term decline, it still remains a huge problem: recent figures from the University of Florida’s National Retail Security Survey peg shrinkage at more than $34 billion per year.
Chase-Pitkin Home & Garden, which operates 15 home improvement stores in upstate New York, is using SPSS predictive analytics storewide as a backbone for a corporate-wide inventory information system that analyzes data to uncover and predict trends so as to make quicker, more strategic decisions.
Chase-Pitkin first implemented SPSS technology in its tools and power tools department, which represents over 10,000 items. Chase-Pitkin has been able to identify the top 16 items that represent 50 percent of the chain’s inventory shrinkage. By focusing on these 16 items, including monitoring them by store cameras, Chase-Pitkin managers were able to determine that shoplifters smuggled these particular items.
They have since developed policies and procedures to prevent such theft and also now inventory these items on a weekly basis.
“By using SPSS predictive analytics, we’re able to reduce the disappearance of certain high-value items by more than 50 percent, and slash overall shrink by two-tenths of a percent,” said T. Christopher Dorsey, Chase-Pitkin’s CIO and Controller. “This represents a significant savings from a small implementation. SPSS software paid for itself in just a year, and based upon the success achieved with this first deployment, we decided to implement SPSS predictive analytics storewide and foresee similar type opportunities.”
With retailers counting on part-time seasonal help during the holiday season, inventory reduction poses a daunting problem for retailers and consumers alike. Experts believe that the average family spent $400 more last year than it should have to cover the costs of stolen merchandise.
About SPSS
SPSS Inc. [NASDAQ: SPSS] is a leading worldwide provider of predictive analytics software and solutions. The company`s predictive analytics technology connects data to effective action by drawing reliable conclusions about current conditions and critical future events. More than 250,000 commercial, academic, and public sector customers rely on SPSS technology to help increase revenue, reduce costs, improve important processes, and detect and prevent fraud. Founded in 1968, SPSS is headquartered in Chicago, Illinois. For additional information, please visit www.spss.com .
For more information contact:
Kim McLynn
Public Relations Manager
SPSS Inc. Corporate Communications
kmclynn@spss.com
Phone 1.312.651.3804 / Fax 1.312.651.3690
SPSS Inc., 233 S. Wacker Dr., Chicago, IL 60606
www.spss.com
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