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Survey: Disconnect between IT, loss prevention, and other units


Chelmsford, Mass. -- There is a disconnect between IT and loss prevention departments when it comes to budgets, focus and staffing, according to a study by IHL Group and Axis Communications.

The study, “The Great Disconnect between Loss Prevention and IT,” suggests that after using IT budget to fund significant data breach protection and PCI certification efforts, retailers on average still have 6.4% of that budget left to spend on other LP priorities. As organization revenues increase, PCI and data breach protection costs level out, and IT budgets continue to grow linearly, with larger retailers ending up with two to three times more funds than smaller retailers for additional LP activities, such as organized retail crime and slip and fall prevention, electronic article surveillance (EAS), CCTV, video analytics and more.

“In the retail industry, we all have a general understanding that a lot of effort and money is dedicated to EMV compliance, PCI and data breach protection. In conducting this research, what was fascinating to our team is just how much that prioritization drains resources for other LP efforts, specifically in IT,” said Greg Buzek, founder and president of IHL Group.

Buzek added that while there is a disconnect in regards to focus of existing budget and resources, study findings indicate that real opportunities exist for other business units to actually generate revenue from these technologies with new applications, such as traffic counting and video analytics for marketing optimization, and more.

By ranking retailers in terms of LP technology spend, with tier 1 retailers spending the most, the research found that tier 1 retailers with more than $1 billion in sales dedicate only 4.5% of their IT staff to LP efforts.

In contrast, tier 3 and tier 4 retailers devote nearly 8%, clearly demonstrating that the percentage of IT staff for LP decreases as revenue and access to efficient systems and technology increases. As retailers devote more spend to investments like IP-enabled video technology, LP functions demand less personnel attention and free up resources for business growth activities.

When assigning weight to IT and LP initiatives, PCI and data breach protection take 35% of the overall IT focus, while only 26% of LP initiatives are similarly focused, with LP giving much greater weight to its own functions, such as employee and consumer theft.

At odds with both IT and LP, other organizational business units, such as finance, see PCI and data breach protection as 54% of their focus — likely linked to recent, high-visibility data breaches in the public sphere.

In other highlights from the report:

• 86% of respondents have CCTV in place today, making it a large component of LP initiatives. Of those same respondents, 64% leverage IP-enabled technology.

• While retailers are planning to further leverage the benefits of surveillance by implementing smart software and analytics, in the near term, CCTV camera use will remain dominated by traditional LP functions.

• While 89% of IT and 90% of LP find the prevention and discovery of employee theft within the walls of the store incredibly important, only 71% of other business units find this to be the number-one priority.

• 79% of IT and 90% of LP respondents prioritize the use of CCTV to mitigate consumer theft in store, while only 57% of other business titles find this an important focus of the technology.

• Unsurprisingly, 100% of LP professionals surveyed say cashier monitoring is a priority use of CCTV, while IT and other business units de-prioritize it at 56% and 57%, respectively.

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