Continuing to Leverage Technology toSolve Retail Asset Protection Challenges

Byron Smith – Corporate Asset Protection ManagerOctober 2013

Agenda

• Overview of 7-Eleven• Asset Protection Core Strategy• 7-Eleven Technology Solutions • Integration of Solutions to Maximize Systems• CCTV Systems & Tools• The Future• Mobile App• Questions

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7-Eleven – World’s Largest Convenience Retailer• 50,900 Stores Worldwide• Operating in 16 Countries• Worldwide Revenue $62.5 Billion• Over 10,200 Stores U.S. and Canada• Each store's selection of about 2,500 different products• Predominately Franchised (80%)

7-Eleven Franchise System- Partnership

Franchisee• Initial Franchise Fee• Labor Expenses

o Payrollo Workers Compensation Insurance

• Maintenance (Some)• Inventory Shortage

7-Eleven• Own the location or hold the lease • Responsible for most of the occupancy

costso Utilitieso Maintenance Expense (Most)

• General Liability Expense• Marketing/Brand• Finance Inventory

Shared• Merchandise Write-offs

o Gross Profit

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

Revenue/ Profit Assurance

Inventory Variation Control

Incidents and Investigations

Safety and AP Awareness

Asset Protection Team

Asset Protection Core Strategy

Talent Investment• Investigations Specialists • Field AP Specialists• Subject Matter Experts

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

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

7-Eleven Technology Solutions

1) Transaction activity captured in the POS T-Log is sent from the store’s ISP to the 7-Eleven 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 AP Field Team and Corporate Investigations accesses both systems via the web and manages the investigation information and results.

The Asset Protection System

Data Center

Asset Protection Team

Quick overview of system activity, links to reports and system configuration. The portal is customized for each user or specific role requirements. Types of inquiries:

• Non Scanned Refunds• Price Overrides• Tobacco Promos• Transaction Lookup• Item Voids• Penny Rings• No Sales• Non Scanned Sales• Coupons• Cancel Age Verification• Aborted Transactions

The Secure Portal

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

Secure Investigations

Results 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.

CCTV Systems & Tools

ClickIt Retail Analytics 360 Video

Transaction Review - 360 Video

Advanced ATM Path

Front Door Path Analysis

Analytics Path Results

Front Door Pay & Leave

Analytics Heat Map

Dwell Time Map

Dwell Time Map

Infrastructure to Support the Future

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

o How flexible is the solution, and will it be able to accommodate our future needs?

o Will the provider commit to further development of their solution?

o As we address scale, can the solution continue to support our needs as we grow in store count?

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

o Are we focused on innovation and best in class solutions?

The Future

• Product Protection• Automation – Cycle Counts• Vending Product Options

Prevention Programs • Robbery Prevention Programs• Response to theft and fraud• Travel Safety & Security • Business Continuity Management

Investigations Support• Surveillance• Integrity Shops• Enforcing Compliance with Business & Regulatory Practices• Termination Investigation Process• Coupon Intergrity

• ERM Approach• Weather Alerting Options• Merchandising • Smart Safes

Product Security Innovation

Mobile App

Main Screen

Navigation

Featured Products

Special Events

Current Offers

Questions?