Retail industry veterans are well-versed in the significance of reducing shrink in their stores. According to the 2020 National Retail Security Survey, shrink is at an all-time high, accounting for 1.62% of a retailer’s bottom line and costing the industry as a whole almost $62 billion. Seven in ten retailers report a shrink rate that exceeds 1%. With retailers working harder than ever to tighten their budgets and navigate COVID-19, they must make security a priority as security challenges hit record-breaking heights. Organizations are devoting more resources to combat theft in the coming year, and many of those investments will include technology security solutions.
New Threats Loom
Many factors play a role in a retailer’s shrink percentage, but new threats are more prevalent during this unique time. Scammers’ activity has increased due to the global pandemic. With economic unrest, attempted theft has been on the rise without fear of consequences, including gift card scams, self-checkout robbery, and other scenarios. Although theft isn’t uncommon, it amplifies drastically in conjunction with rampant financial insecurity and uncertainty, and high wealth inequality.
Technology Has Both Light and Dark Sides
Technology has developed many solutions for industries suffering from the pandemic, but technology has its dark side. Advancements have made it easy for those who would want to harm to carry it out. Area code spoofing and cybercrime are two notable examples. It’s effortless to create problems, but technology security has developed alongside these problems to keep up and catch culprits where possible. Unfortunately, there will always be an ongoing war between those who harm and those who protect from harm. Technology is the tool through which both sides carry out actions, both positive and negative.
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Your Responsibility Goes Beyond Yourself
In the survey numbers, organizations hope to reduce eCommerce crime, organized retail crime, and cyber-related incidents like data breaches. 95.6% of retail businesses said these have become “somewhat more of a priority” within the last five years. 84% of participants said these risks and threats have become “much more of a priority” within the previous five years.
Retail managers and shop owners need to remember that you’re not only protecting yourself with security precautions. You have employees who depend on your business’s success for their livelihood, and customers whose data is often the target of cybercrime. For the safety of your business, employees, and loyal customers—it’s critical to take steps to combat loss prevention.
How To Combat Retail Theft
Assess Your Retail Business
When looking at your retail business, identify your risks and which areas you are most vulnerable to theft attempts. Research your data insights to learn where loss prevention is preventable and where it is most predominant within your business. It’s important to consider all potential options like petty theft or employee theft. According to the 2020 National Retail Security Survey, retail business participants stated that 49.3% of theft is from in-story only sales, 26.1% from online-only sales, and 18.8% from multi-channel sales. Look at where theft plays a role within your business to learn the best prevention methods moving forward.
In the same survey, the average dollar loss per dishonest employee increased by more than 61% between $500 and $749. Although 40% of employee-related shrink was for less than $500, the numbers can add up over time. Retail business owners are aware that security challenges aren’t only through cybercrime and other customer avenues. They can also stem internally and indeed affect your bottom line.
Invest in the Right Tools
As technology advances, security solutions will be a valuable investment for retail businesses. Monitoring technology and intuitive POS systems are top solutions that retail business owners use to keep loss prevention problems at bay. Noted in the Security Survey, the top five loss prevention systems used from a retail business have increased between 3-16% since 2019. These systems include burglar alarms, digital video recorders, live customer-visible CCTV, armored car deposit pickups, and POS data mining.
Technology plays a massive role in the security measures retail businesses are taking over the past year. There is a 16% increase in POS exception-based CCTV interface and a 15.3% increase in other theft-deterrent devices such as spider wraps, keepers, etc. Retail business owners should also invest in inventory tracking and employee accountability features to cover all facets of loss prevention challenges, whether internal or external. Investing in security technology can reduce your shrink percentages and get your team on the right path to support your business.
Retail businesses have faced many challenges throughout 2020, and shrink is another component that owners must work through to keep their doors open, whether they’re a brick-and-mortar shop or an eCommerce business. Touch Dynamic offers technology that can support your security needs and help reduce loss prevention problems. To learn more about what technology will meet your business needs, contact one of our expert team members today.