Leveraging Technology to Solve Retail

Asset Protection Challenges

Mark Stinde- Sr. Director, Asset Protection

January 3, 2012

Session AgendaSession Agenda

• Overview of 7-Eleven

• Asset Protection Challenges at 7-Eleven

• In-Flight Technology Solutions for Asset Protection

• Integration of Solutions to Maximize Systems

• Building Infrastructure that Supports both the Current and Future Needs of the Business

• Questions

3

7-Eleven – World’s Largest Convenience Retailer

• 40,000 Stores Worldwide• Operating in 16 Countries• Worldwide Revenue $62.5 Billion• Over 7,000 Stores U.S. and Canada• Predominately Franchised

Asset Protection- Overview 2010

Strengths • Robbery Prevention Programs

• Response to theft and fraud

• Incident Management/Loss Recovery

Opportunities• Reactive versus Proactive

• Event Driven• Respond and Report

• Limited Technology • Data Mining inefficient and ineffective• Case Management non-existent

• Significant theft, fraud in the stores

• Safety/Risk Management

• Limited resources in Asset Protection

• Transition from Corporate to Franchise

• Respond and Report

• Critical Incidents

• Theft and Fraud Focus

• Reactive Approach

• SME on all areas of Asset Protection• Business Leaders• Strong Business Acumen• Leveraging Technology and Data• Proactive Approach

Current Best in Class

Revenue/ Profit Assurance

Inventory Variation Control

Incidents and Investigations

Safety and AP Awareness

AssetAsset Protection TeamProtection Team

Asset Protection Core Strategy

7-Eleven Franchise System- Partnership

Franchisee• Initial Franchise Fee

• Labor Expenses

• Payroll

• Workers Compensation Insurance

• Maintenance (Some)

• Inventory Shortage

7-Eleven• Own the location or hold the lease

• Responsible for most of the occupancy costs

• Utilities

• Maintenance Expense (Most)

• General Liability Expense

• Marketing/Brand

• Finance Inventory

Shared• Merchandise Write-offs

• Gross Profit

*** Franchisee can purchase up to 15% of their merchandise from Non-Recommended Vendor

Talent Investment• Investigations • Field AP Specialists

Exception Based Reporting • Exception Reporting• Fraud Management• System Integration

Case Management System • Case Management• “Cradle to Grave” Resolution• Asset Recovery• System Integration

Networked In-Store Video• DVR Technology in all Stores• Networked for Remote Access• System Integration•The utilization of Video Analytics

In Flight Technology Solutions

1) Transaction activity captured in the POS T-Log is sent from the store’s ISP to the HP Data Center.

2) The POS T-Log is captured in an unedited form and sent along with other data feeds (21 in total) to the “Secure” Exception Based Reporting tool. Some feeds are also sent to APIS.

3) The “Secure” EBR tool (SaaS) collects data & flags potential fraud or other risk conditions based on the criteria established by the AP team.

4) The video is networked at the store and is called up for exceptions identified in the Secure Tool. Video evidence can be stored in either Secure or APIS as digital evidence.

5) When a condition of concern is identified a ticket is logged in the Case Management tool (SaaS) with the associated data from the EBR tool.

6) The Asset Protection Field Manager accesses both systems via the web and manages the investigation information and results.

The Asset Protection System

Data Center

Asset Protection Team

Investigators have an overview of system activity, quick links to reports and system configuration

The portal is customized for each user’s or role requirements

The Secure Portal

Secure Questions

Automated queries are created to monitor specific fraud risk areas are saved in the system to process data

Secure InvestigationsResults of Saved questions are fed into the Investigation Center where investigators can review suspect transactions

Secure Transaction Viewer

Transaction viewer will have access to details such as:

• Receipt View• Tlog Audit View • Store Sequence• CCTV footage

Users can drill into the investigation results to see the details of specific transactions which have been flagged by the system.

Infrastructure to Support the Future

• In considering all of our technology solutions, we are balancing our current needs with those of the future.

• How flexible is the solution, and can it accommodate future needs?

• Is the provider committed to further development of their solution?

• Can the solution continue to support our needs as we grow in store count and scale?

• Can the solution easily integrate with other solutions that are currently in place or may be added?

Front Door Path Analysis

Front Door Pay & Leave

Arlington Advanced ATM Path

7/1/2011 12:00 AM 7/2/2011 FrontDoor 1606

7/2/2011 12:00 AM 7/3/2011 FrontDoor 1644

7/3/2011 12:00 AM 7/4/2011 FrontDoor 1548

7/4/2011 12:00 AM 7/5/2011 FrontDoor 1310

7/5/2011 12:00 AM 7/6/2011 FrontDoor 1312

7/6/2011 12:00 AM 7/7/2011 FrontDoor 1286

7/7/2011 12:00 AM 7/8/2011 FrontDoor 1530

7/8/2011 12:00 AM 7/9/2011 FrontDoor 1685

7/9/2011 12:00 AM 7/10/2011 FrontDoor 1657

7/10/2011 12:00 AM 7/11/2011 FrontDoor 1555

7/11/2011 12:00 AM 7/12/2011 FrontDoor 2023

7/12/2011 12:00 AM 7/13/2011 FrontDoor 1398

7/13/2011 12:00 AM 7/14/2011 FrontDoor 1384

7/14/2011 12:00 AM 7/15/2011 FrontDoor 1387

7/15/2011 12:00 AM 7/16/2011 FrontDoor 1617

7/16/2011 12:00 AM 7/17/2011 FrontDoor 1650

7/17/2011 12:00 AM 7/18/2011 FrontDoor 1557

7/18/2011 12:00 AM 7/19/2011 FrontDoor 1425

7/19/2011 12:00 AM 7/20/2011 FrontDoor 1394

7/20/2011 12:00 AM 7/21/2011 FrontDoor 1318

7/21/2011 12:00 AM 7/22/2011 FrontDoor 1320

7/22/2011 12:00 AM 7/23/2011 FrontDoor 1525

7/23/2011 12:00 AM 7/24/2011 FrontDoor 1733

7/24/2011 12:00 AM 7/25/2011 FrontDoor 1586

7/25/2011 12:00 AM 7/26/2011 FrontDoor 1399

7/26/2011 12:00 AM 7/27/2011 FrontDoor 1375

7/27/2011 12:00 AM 7/28/2011 FrontDoor 1359

7/28/2011 12:00 AM 7/29/2011 FrontDoor 1360

7/29/2011 12:00 AM 7/30/2011 FrontDoor 1613

7/30/2011 12:00 AM 7/31/2011 FrontDoor 1839

7/31/2011 12:00 AM 8/1/2011 FrontDoor 1565

Arlington - People Count

Arlington - People Count

Questions