Internal Marketing, Retail Employee Commitment, and Employee Response to Retail Theft: An Exploration

Abstract

Inventory shrinkage, the financial loss to retailers attributable to a combination of employee theft, vendor fraud, shoplifting, and administrative errors, continues to be a major concern for US retailers. Of particular interest to this study is that portion of these losses that is attributable to retail employees, as, in the US, the bulk of shrinkage in the retail sector is attributable to this source. A National Retail Foundation Security 2011 report indicated that, of the $34.5 billion losses owing to shrinkage, 43.9 % was attributable to employee theft. Consequently, retailers have tried different strategies to stem this problem, among them encouraging employees to report shrinkage. The thesis in this study is that the nature of the relationship that employees have with retailers will influence the likelihood of their cooperation in this endeavor. This relationship will be based on internal marketing, which should lead to retail job satisfaction and employee commitment.