Retailers lose billions of dollars annually to theft and inventory mismanagement
One of the biggest threats to retail profits is “shrink,” or preventable losses due to theft or human error. Retail shrink accounts for billions of dollars per year in lost revenue, so it’s in retailers’ best interests to have a comprehensive set of standards designed to avoid these losses. However, the rise of retail organized crime, cyberattacks, and new methods of theft have made reducing shrink harder than ever for retailers. In order to be prepared for these modern threats, retail store owners and managers must have ironclad loss prevention strategies in place, as well as the tools to enforce them.
What does loss prevention mean?
The loss prevention meaning is fairly straightforward in a retail context: It simply refers to a set of practices and policies that retailers use to preserve profit and deter preventable loss of products or services. These losses might come from several sources, including operational errors, employee theft, shoplifting, supplier fraud or package pilferage. While these individual losses might be small or even negligible, repeated preventable losses can add up to millions of dollars in lost profits for a single store. Loss prevention addresses these threats, which evolve as quickly as technology does.
Why is loss prevention important?
To understand why up-to-date loss policies are so critical in the retail space, one only has to look at some loss prevention statistics. Our own data reveals that 64% of in-store sales, service, and support retail workers have experienced theft firsthand, showing just how shockingly common this issue is – and that’s only one facet of shrinkage. While that obviously poses a threat to a store’s bottom line, a more pressing issue is the danger to employees, 47% of whom have either seen or been the victim of retail violence on the job.
On top of that, retail thieves are getting bolder, increasing the average amount lost per incident. After several years of decline, the average dollar loss per robbery in the United States shot up to nearly $8,000 in 2020. If the word “shoplifter” brings to mind an image of a teenager hastily shoving some lipstick or candy in their bag before shuffling out of the store, it’s time for a reality check. Organized retail crime – such as professional shoplifting rings – is much harder to deter without effective loss prevention methods in place. Nearly half of the retail security professionals we surveyed said they witnessed organized retail crime, with discount stores, health and wellness businesses and telecommunications providers being particularly vulnerable.
While organized criminal activity isn’t the only reason to institute comprehensive loss prevention policies, it does make up a disproportionate percentage of retail security threats. To learn more about the impact of organized retail crime and other threats that retail employees face, read our full report.
What loss prevention technology should retailers know about?
Retailers can’t simply rely on eagle-eyed associates to prevent theft and human error. Hiring security professionals is an increasingly popular option, but these officers must be equipped with the latest technology and the training to know how to use it.
According to retail security personnel, the top retail theft prevention tool is CCTV, or video surveillance technology. Despite this, our data shows that only 33% of retailers are currently considering CCTV technology in stores. This paints a picture of an industry that’s wholly underprepared for the threats modern retailers face and missing out on one of the best methods of prevention.
In addition to implementing security cameras throughout physical locations, here’s how security professionals can use loss prevention technology to reduce shrink and keep employees safer:
Body-worn cameras: Designed to record any incident from the perspective of security personnel, body-worn cameras provide indisputable evidence of crimes. Retailers should look for BWC technology that makes capturing and sharing as intuitive as possible, as well as high-quality video resolution.
Less-lethal weapons: To prioritize the safety of your employees, security officers should be trained in de-escalation techniques and have the tools to back up that training. Less-lethal weapons like the TASER help keep tense situations from spiraling out of control while also giving security pros the means to protect themselves.
A comprehensive platform: In addition to hardware solutions, retailers need to invest in software that tracks all of their efforts and ties their loss security policies together. This platform should store video recordings and make them easy to find and share with law enforcement, as well as allow you to analyze the effectiveness of your business’s loss prevention strategy and adjust as necessary.
Ultimately, the best loss prevention policy for retailers is to install a connected network of cameras, de-escalation tools, intuitive software and comprehensive training for security personnel. Axon’s suite of security solutions is designed to significantly reduce shrinkage and battle the rising wave of organized retail crime. From body-worn cameras and intuitive video management to de-escalation tools and a platform from which to manage it all, Axon can help modernize your retail enterprise’s loss prevention policies, potentially saving owners millions of dollars. Ready to learn more? Get in touch.
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