NRF PROTECT 2018 Exhibitor Big Ideas session produced by Profitect

1. 6/12/2018
1
LP & Finance: A New Winning Combo
Sally Beauty – Jim Mires
Guy Yehiav – Profitect
Joe Hippler - Belk
A Look at
LOSS PREVENTION

2. 6/12/2018
2
A Look at
PROGRESSIVE
LOSS
PREVENTION
LP Working Across Multiple Departments
PLANNING
LOSS
PREVENTION OPERATIONS
FINANCE
SUPPLY
CHAIN

3. 6/12/2018
3
Today
LOSS
PREVENTION
FINANCE
• Alignment of vision between Finance and AP will ensure process,
policy, compliance & governance
• Driving profitability through improved inventory unit accuracy &
operational compliance ensures a great customer experience
• Customer experience depends on having merchandise available when
customers are ready to buy…regardless of channel
• Collaborating to provide decision support and analytics to all business
partners ensures a positive customer experience while increasing
margin opportunities and overall profitability
Asset Protection from a Financial View at Belk
The relationship between Finance and AP must evolveThe relationship between Finance and AP must evolveThe relationship between Finance and AP must evolveThe relationship between Finance and AP must evolve
beyond shrink and securitybeyond shrink and securitybeyond shrink and securitybeyond shrink and security ———— that’s the JOB.that’s the JOB.that’s the JOB.that’s the JOB.

4. 6/12/2018
4
Jim Mires
VP Loss Prevention & Safety
8© Profitect, Inc., All rights reserved, Confidential Information
TRADITIONAL FOCUS:
• Physical security and
employee theft
• Visible measures
• CCTV
• Electronic sensor barriers
TODAY:
• Data protection
• Safety and risk management
• Inventory control
• Legal compliance
• Investigations involving highly skilled
and aggressive criminal groups
significantly
impact a retail
company’s
financial
stability and
brand.
Today’s Role of Loss Prevention

5. 6/12/2018
5
9© Profitect, Inc., All rights reserved, Confidential Information
Why the need for a strong relationship with finance
Pressure to increase shareholder value and reduce costs across all business functions
• Corporate office resources
• Field Operations are expanding spans of control
‒ Reducing touch point time
‒ More exception based managing
Shrink Control is primary focus, but continued compression in SG&A costs are impacting
other cost centers.
• Damages
• RTV process
• Shipping costs
• Customer experience is impacting company ability to control promotional costs
Total retail losses may not be sexy; however, the impact is big and getting bigger.
• Top line sales are impacting bottom line results
Root cause of total retail losses
Stores Supply Chain E-Commerce Corporate
MALICIOUS NON-MALICIOUS
• External Theft
• Internal Theft
• Fraud
• Damages &
Finical expenses
caused by
Criminal
behavior
• Loyal points
theft
• Waste
• Abuse
• Spoilage
• Missed Returns
• Lost Profits from
OOS
• Natural Disaster
• Cash
• Human & System
Error
• Bad promotional
execution
MALICIOUS NON-MALICIOUS
• External Theft
• Internal Theft
• Fraud
• Damages &
Finical expenses
caused by
Criminal
behavior
• Waste
• Abuse
• Spoilage
• Missed Returns
• Natural Disaster
• Human & System
Error
MALICIOUS NON-MALICIOUS
• Fraud
• Customer
Service Rep
Fraud
• Stolen Credit
Cards/Gift Cards
• Suspicious
Loyalty Activity
• Identity Theft
• Credit Card
Chargebacks
• Ecomm
Shipment System
Gaps
• Allocation
Optimization
• DC to Store
Optimization
• Increase cost to
serve per order
• Late shipments
MALICIOUS NON-MALICIOUS
• Fraud
• Vendor Fraud
• Workers Comp.
• General Liability
• Currency
Exchange Losses
• Regulatory Fines
• Product
Contamination
• Bad Dept
• Vendor
compliance
Known LossUnknown Loss Known LossUnknown Loss Known LossUnknown Loss Known LossUnknown Loss

6. 6/12/2018
6
SKU Description Sum of Var Qty Sum of Ext Price
314986 X18 STATIONARY SET(3)GWP HOLIDAY'17 -9170 ($174,138)
122112 SASSY NATURAL 100%VIRGIN REMY HH -1091 ($120,717)
314974 2017 AUGUST BRAIDED TOTE - GREY -3962 ($110,896)
111100 CHI ELITE SHIMMER BLACK FLAT IRON -1044 ($106,478)
314967 APR-MAY 2017 GWP PETAL TOTE PINK -3958 ($98,910)
314968 APR-MAY 2017 GWP PETAL TOTE CREAM -3823 ($95,537)
395010 ANDIS T-OUTLINER TRIMMER #04710 -1304 ($95,046)
157990 SALLY JUMBO END WRAPS - 1000 SHEETS -44850 ($92,366)
800275 COLOR CHARM #T18 LIGHTEST ASH BLND -19706 ($91,864)
122110 SASSY NATURAL 100% VIRGIN REMY HH -811 ($83,472)
314973 2017 AUGUST BRAIDED TOTE - PATTERN -2940 ($82,291)
314975 2017 AUGUST BRAIDED TOTE - PINK -2661 ($74,481)
314994 2018 JAN TOTE- BLACK -2452 ($68,631)
397530 ME 1875W IONIC PRO ROLLABOUT DRYER -663 ($67,157)
301675 ION MAGNESIUM FLAT IRON -830 ($64,635)
314969 APR-MAY 2017 GWP PETAL TOTE BLUE -2443 ($61,051)
240104 ARDELL WISPIES BLACK 5 PACK -3666 ($60,186)
500510 L'OREAL QUICK BLUE - SINGLE APPL -14496 ($59,999)
284051 SATIN STRNDS PREM HH 22" RIO NIGHTS -458 ($57,953)
314980 2017 LOYALTY BIRTHDAY BOX GWP -4223 ($57,644)
724842 GELISH MINI STARTER KIT -579 ($52,722)
594104 MC MANETABOLISM HAIR GROWTH VITAMIN -1964 ($49,921)
730897 NAIL GENIE PRO MANICURE MACHINE -417 ($49,556)
395066 X18 ANDIS BLACKOUT T-OUTLINER -505 ($49,287)
Top 25 SKUs ($)
SKU Description Sum of VarQty Sum of ExtPrice
157990 SALLY JUMBO END WRAPS - 1000 SHEETS -44850 $ (92,366)
800275 COLOR CHARM #T18 LIGHTEST ASH BLND -19706 $ (91,864)
992321 US HOL GIFTCARD W/ENV <REORDER> -16984 $ -
500510 L'OREAL QUICK BLUE - SINGLE APPL -14496 $ (59,999)
992323 US HOL GIFTCARD W/CARRIER <REORDER> -14186 $ -
140231 LVOC BTZ FROZN STIFF HAIRSPRAY MINI -11022 $ (33,657)
164275 X18 BS HOLIDAY LADY TWEEZERS N/D17 -10024 $ (8,435)
314986 X18 STATIONARY SET(3)GWP HOLIDAY'17 -9170 $ (174,138)
140249 BTZ ROCK ON DRY SHAMPOO MINI -9167 $ (26,122)
800274 COLOR CHARM #T14 PALE ASH BLONDE -6535 $ (30,267)
806033 FP N/E BRUSHSTROKE BLUSH -5758 $ (24,702)
373271 S/E MEGASILK OLIVE HEAT PROTECTION -5341 $ (20,205)
302322 ION COLOR DEFENSE AFTER-CLR SEALER -5282 $ (13,752)
320830 CLAIROL BW2 LIGHTENER-SINGLE APP -5272 $ (21,523)
500240 EXCELLENCE HICOLOR HILIGHTS MAGENTA -5106 $ (28,640)
406200 SUPER SUNNIES EYESHIELDS ASST COLOR -5104 $ (16,504)
140764 BTZ STW CRINKLE RELEASER MINI -4974 $ (13,009)
292026 SC HIGH OUTPUT TRIGGER MIST SPRAYER -4626 $ (11,545)
305046 ION SENSITIVE SCALP 20VOL DEVELOPER -4411 $ (8,928)
314980 2017 LOYALTY BIRTHDAY BOX GWP -4223 $ (57,644)
320970 KALEIDOCOLORS NEUTRAL SINGLE PKETTE -4196 $ (14,880)
152007 J&D PASTEL WIDE TOOTH TAIL COMB -4048 $ (4,008)
314974 2017 AUGUST BRAIDED TOTE - GREY -3962 $ (110,896)
314967 APR-MAY 2017 GWP PETAL TOTE PINK -3958 $ (98,910)
314968 APR-MAY 2017 GWP PETAL TOTE CREAM -3823 $ (95,537)
Top 25 SKUs (#)

7. 6/12/2018
7
Where Are We Going at Sally Beauty Holdings?
Focus on Research into operational shrink between all of
our businesses
• including inventory control and the merchants for long term solve
and root - cause analysis
Strong Finance and Operations background adds
credibility to position.
Development and implementation of a proactive and predictive risk strategy
• combining early identification of significant loss risks across regions with a proactive
mitigation and ongoing inventory audit
Office in Operations area of the business
• ensure integration into spontaneous conversations and decision making meetings
Today, the people in Loss Prevention
need to have skills in finance,
inventory control, accounting. They
really need to understand the retail
operation thoroughly.

8. 6/12/2018
8
15© Profitect, Inc., All rights reserved, Confidential Information
Consolidate multiple
sources of
into
DATA
INFORMATION
Turns
into
INFORMATION
KNOWLEDGE
Transforms
into
KNOWLEDGE
ACTIONS
Take
to
ACTIONS
EXECUTION
Paradigm shift from Traditional to Progressive