It might be assumed that the main threat to brick-and-mortar businesses would be the increase of e-commerce. However, in-store shrinkage plays a large role in hampering business success.
Inventory shrinkage costs the worldwide retail industry significant amounts, only in the U.S. retail industry over $45 billion each year. Internal theft, shoplifting, fraud, and organized retail crime (ORC) are affecting profit margins. In fact, almost all retailers are affected by ORC.
Loss prevention is the process to reduce the amount of theft, breakage, or wastage in a business. Shoplifting (taking products from the store without paying for those products) and employee theft (typically being false merchandise returns and cash register skimming) are the two most discussed topics when it comes to loss prevention.
The National Retail Federation’s 2018 National Retail Security Survey revealed more than 50% of retail shrink (on-hand inventory versus recorded inventory level) is due to employee theft or other mistakes (paperwork or billing errors of mispriced items) and not external theft.
Technology offered many tools to assist retailers to minimize this loss. It is helping retail loss prevention in different ways, from 360° HD network cameras to RFID (radio frequency identification) for theft prevention and improved inventory accuracy, to sensors capturing phone signals, offering innovative insights into store operations —and, unquestionably, there is the power of analytics.
Technology not only assists in minimizing loss, but also helps to increase revenues, manage operations, conduct store audits, and much more. Today, the innovative use of integrated technologies allows the entire retail team to do more with less as organizations are trimmed for cost savings as well as finding new ways to make use of data. Big data applications with more user-friendly dashboards give retailers actionable information for field and corporate staff to execute meaningful interventions, be it investigations that uncover fraud or training issues that increase compliance in the stores. Technology has helped loss prevention evolve to a modern, data-driven profession that truly contributes at the highest level of retail organizations.
It takes a lot of work and could be a complex process for store owners to prevent these kinds of loss. Nowadays retail is not what it used to be – and as a result, loss prevention can no longer be achieved as it used to be. With technology, retailers can better detect when theft may have happened, but more significantly, it can be used to help avoid loss altogether. From in-store to virtual, technology is an asset that retailers should rely on to help fight loss prevention.
Managing sales and predicting shopping trends are also simpler with technology. Automated inventory controls, security tags, POC and IoT-enabled theft prevention systems don’t require direct employee efforts and free up your team to focus on helping customers instead of over-focusing on retail loss prevention. These tools also provide valuable, tangible data that identifies how/where retail loss is occurring so it can be more effectively mitigated.
With the help of tracking and checking movements of customers and employees, real time tracking, and bidirectional communication, we can identify the ORC incidents and take actions to reduce it which will lead to loss prevention. While employee supervision effectively minimizes internal retail loss, we should disclose the change to all employees.
As mentioned above, technology and privacy are two things that play a major role in loss prevention. With that in mind, Ariadne has developed privacy-compliant, award-winning solutions that help the retail businesses streamline their operations and reduce shoplifting. With a few Ariadne sensors in the premises, the occupancy of each area can be tracked in real time and any unusual traffic can be detected. To get more information on how it can also help your business, you can have a free 30 min demo call with our team.
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