Organized Retail Crime (ORC) has been an issue for retailers for years and is only continuing to grow as ORC gangs become more aggressive and sophisticated in their approach. According to the NRF 2021 Retail Security Survey, 69% of retail loss prevention professionals have seen an increase in ORC activity over the past year, and 65% report an increase in violence, a nearly 10% jump from 2019. With innovative technologies, including connected Internet of Things (IoT) solutions, retailers have a new opportunity to combat shrink through intelligence-led loss prevention technology.
Innovations in Loss Prevention Technology
Although there have been strides in loss prevention and IoT technology, many retailers are still using older solutions that do not share the innovative capabilities of the data-driven solutions now available. This leaves them unable to integrate and capture actionable insights from across store operations. Many of the loss prevention strategies retailers had previously leveraged were only applicable in-store, leaving them unable to take action once items were removed from the store. By implementing IoT now, retailers can take their loss prevention strategy to the next level, better connect their stores and solve a growing business challenge.
Leveraging the latest in loss prevention solutions, storefront visibility integrates IoT technology with tags, pedestals and AI-enabled video cameras throughout stores to create an overall connected store. These technologies ultimately give retailers clearer insights into the end-to-end journey of theft as it happens, driving actionable insights for immediate outcomes. For example, using radio frequency (RFID)-based Electronic Article Surveillance (EAS) systems, retailers can scan all exits and get a full picture of what went missing, and when, at the storefront.
This technology was born out of the growing need for data to optimize retail operations and connect all touch points in store. It has also been recognized as an ideal way to combat the rise in sophisticated ORC activities. Today, many thefts are tied to larger ORC groups, which send mules into a store with a list of items to steal. Once the mule successfully removes the items from the store, they then take them back to a physical or online distribution center to resell them, which is how ORCs have been able to successfully monetize theft.
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Store Visibility and IoT Provides Insights into Items In and Out of Store
As merchandise leaves the store, store visibility scans the items in the bag and sets off a beeper to alert employees that items left the store that weren’t accounted for. Retailers can then go back into their POS systems and compare what was paid for and what actually left. This allows retailers to compile an enhanced evidence package to hand off to law enforcement and place value on what was stolen.
With RFID, retailers also can track items that leave the store back to the distribution centers and use the technology to prove the items there were stolen, potentially aiding in the takedown of the entire ORC gang rather than just the mule.
Retailers should also keep in mind that while loss prevention is hugely beneficial for combatting shrink, it also serves many other functions within a store, including monitoring inventory levels. Investing in RFID technologies can be a big initial expense, but being able to leverage the technology to optimize operations across the store makes fully connected, multi-faceted solutions a worthwhile investment.
What Intelligence-Led Loss Prevention Means for Shrink
This opportunity to track theft beyond the exits has never previously been available to retailers. The new technology has enabled a shift from event-based information to insights-based information, so retailers can better understand the magnitude of loss events. With this deeper understanding, they can make a stronger case to law enforcement when shrink does occur, and better yet take the right steps to prevent shrink in the first place.
Increasing shrink and ORC activity is no longer just a loss prevention problem — the implications of shoplifting span across retailers’ enterprise and impact customer experience, creating a companywide issue that employees at every level can help solve when empowered with the right tools and technologies.
Brent Brown is the SVP and General Manager of North America for Sensormatic Solutions, an award-winning global provider of one of the industry’s most comprehensive set of retail performance solutions. Brown is passionate about delivering value to enterprise customers and end consumers through the innovative use of technology and services, including Sensormatic IQ, an open, scalable and intelligent operating platform for retail. He has over 30 years of experience in the retail industry — building, leading and executing IT solutions/services, aligning program management delivery organizations and driving transformational programs.
