Loss Prevention Is Bigger Than Shrink
Retailers have been combating theft and shrink for as long as there have been goods to sell.
Even in the days before RFID tags, alarm systems, and cameras, store owners poured time and resources into saving money by reducing lost goods. Early attempts to combat shoplifting and other retail crimes were most often thought of as “theft prevention.”
The practice primarily focused on finding and apprehending sticky-fingered thieves, but modern technology now allows retailers to address shrink of all kinds.
Advancements in loss prevention solutions have been so significant that retailers now have complex monitoring systems to reduce organized retail crime (ORC), spoilage, and other shrink events while improving enterprise-wide operations. Rather than simply sounding an alarm, these next-generation loss prevention solutions offer insights based on diverse data streams. It’s a much-needed shift, as the NRF 2021 Retail Security Survey found that 69% of retail loss prevention professionals have seen an increase in ORC activity over the past year.
Modern Loss Prevention
As noted above, theft prevention used to be a reactive solution. Stores would monitor customer behavior to identify “red” shoppers”—thieves or individuals with bad intentions—after or during the commission of a crime.
While this method is still used today, modern loss prevention strategies attempt to take a more proactive approach, using artificial intelligence (AI) and data analytics to design smarter stores that predict thefts before they happen.
However, modern loss prevention isn’t just about reducing organized retail crime (ORC). It’s about reducing loss at all levels. Robust intelligence-led loss prevention technologies also help retailers curtail shrink from spoilage, employee theft, administrative errors, and more. Next-generation loss prevention systems can:
Reduce friction for 'green shoppers.'
While many people view loss-prevention techniques as barriers to positive shopping experiences, that’s far from the case. That line of thinking stems from traditional forms of loss prevention, like receipt-checking or locked products that require employee assistance. However, intelligence-led loss prevention solutions like labor and inventory management can actually streamline and enhance shopping experiences.
Solutions that help retailers monitor shrink ensure that products and associates are on hand when green shoppers need them. Even better? Enhanced loss prevention technology supported by full-store shopper traffic and behavior data facilitates the removal of visible shrink prevention methods—like locked cases—that deter green shoppers from making purchases.
Facilitate robust analytics programs within stores—and beyond their doors
One limitation of traditional loss prevention solutions was their inability to track items once they left the store. Store visibility technology mitigates monetized theft popular with ORC groups by leveraging IoT-connected sensors to track stolen products beyond the store.
Retailers can use the same technology to track inventory, floor movement, and shopper behavior to streamline operations, facilitate alternative fulfillment methods, save energy, and more.
Solve labor allocation issues by highlighting problem areas
With the ongoing labor shortage affecting staffing across the globe, ensuring proper labor allocation is top of mind for many retailers. In the past, retailers have used strategically placed associates as physical deterrents to theft and ORC. Now, retailers don’t have the flexibility to dedicate employees to monitoring for shrink as they focus on creating a positive shopper experience.
Intelligence-led loss prevention solutions compile and analyze insights to narrow down areas of concern, allowing retailers to focus employees’ attention back on customers, restocking, and other integral shopper-experience-related tasks.
Act as brand protection
Data collection and analysis act as brand protection by allowing retailers to collect evidence that deters ORC and shrink while protecting people, locations, and brands. They collect evidence of theft events to streamline reporting, giving brands a better chance to take action against thieves.
These comprehensive evidence packages facilitate more effective investigations into ORC events. The technology shows where ORC is occurring so retailers can track shrink events and act upon them to increase profit while protecting their people and products.
Beginning an intelligence-led journey
While preventing theft and shrink events is a big piece of the loss-prevention puzzle, the benefits of a digital journey don’t stop with loss prevention. While it may seem complicated, setting up an intelligence-led loss prevention program is well worth the effort—especially because most modern retailers already have the building blocks.
Existing RFID sensors, cameras, and other surveillance technology combined with powerful, AI-driven data analytics platforms can offer outcome-based insights that fuel digital transformation journeys for retailers of all kinds. With the tools already at their fingertips, retailers that aren’t taking advantage of these capabilities are missing out on powerful tools that can transform their businesses.
Craig Szklany is VP & product GM of loss prevention and liability at Sensormatic Solutions.
