Retail responds to criminal losses
Thursday March 21 2013
Loss prevention research reveals changing practices to retail crime and the technologies used to build robust defences
A new report that analyses global retail crime and loss prevention (LP) trends since 2001 has found more than 78% of shrink is due to shoplifting by dishonest customers or retail employees.
It confirmed new products in fast-paced categories such as electronics, perfumes and sportswear being brought to market every year at premium prices are among the most likely to be stolen. Fresh meat also remains a high-theft category for supermarkets and hypermarkets.
But it also said retailers have taken technology-based action to combat theft in recent years. Of the 50 most stolen products, the number of items protected from theft has increased from 60% in 2007 to 75% in 2011 with electronic article surveillance (EAS) source tagging and other special high-theft systems.
More than 86% of the LP professionals surveyed saw inventory management and/or loss prevention as primary drivers to implement radio frequency identification (RFID) technology.
The multichannel role for loss prevention
The report also pointed out that the role of LP departments is evolving to increasingly provide a strategic service to the other areas of the business.
Online retailing and new payment systems such as smartphones bring new risks to the industry, meaning that LP professionals would benefit from working closely with IT, store operations and marketing in the fight against crime. The report noted that this collaboration draws on joint methods for analysing shrink, while data obtained from electronic surveillance and RFID solutions is often used to make improvements in marketing, operations and logistics.
While the report highlights a clear correlation between loss prevention spending and lower shrink, the length and depth of the global recession has resulted in increased rates of shrink since 2007 even though the number of retail thieves apprehended continues to be about six million every year.
The report, produced by the Centre for Retail Research, includes recommendations for the retail industry. Changing Retail, Changing Loss Prevention analyses the evolution of retail crime and loss prevention uncovered by the Global Retail Theft Barometer publications since 2001.
Per Levin, president of shrink management and merchandise visibility solutions for the report sponsor Checkpoint Systems, said: “In this ever changing environment, we are pleased to support the global retail community with research that offers benchmarks and practical insights with the objective to help retailers improve their merchandise availability and grow sales profitably.”