Retail crime was a hot topic throughout 2023, and it’s easy to see why. According to the National Retail Security Survey, losses attributed to retail theft rose to $112.1 billion in 2022, up from $93.9 billion in 2021 — and experts expect this year’s total to continue to rise. Respondents also overwhelmingly indicated that shoplifters — particularly those affiliated with organized retail crime (ORC) — have grown increasingly violent in recent years, adding another layer to the challenge. Cracking down on retail crime isn’t just about stopping thieves anymore. It’s about keeping employees and shoppers safe.
Still, much of the conversation surrounding retail crime has focused on chain stores and other large businesses. And while it’s true that many large retailers have attributed store closures to the surge in both theft and violence, its impact is felt even more keenly by small and mid-sized businesses (SMBs). If big box stores with significant resources at their disposal are struggling to implement effective security measures, how can local retailers hope to keep their locations safe? Ultimately, the answer lies in making strategic investments in solutions that don’t just improve security, but generate ROI and create a positive impact on the business’s bottom line.
SMBs Are Disproportionately Impacted by Retail Crime
The stores hurt the most by retail crime aren’t big box stores. They’re mom and pop shops — the local businesses that form the lifeblood of countless communities throughout the country. Unfortunately, while larger stores often have security measures like loss prevention personnel, anti-theft sensors and other helpful solutions, those measures usually aren’t financially feasible for small and mid-sized businesses.
As a result, local retailers tend to be less protected than their competitors — and would-be criminals know it. Criminal groups — especially those involved in ORC — know that targeting smaller, more vulnerable businesses can be more lucrative than targeting larger, better-prepared stores.
The result is that, according to a recent Forbes study, 75% of small business retailers say they lose between $500 and $2,500 each month due to theft, and the businesses most likely to experience theft on a daily basis were those with between one and 20 employees. It’s also worth noting that small businesses were also found to be more likely to be victimized by internal theft, underscoring the fact that shrink doesn’t just originate from outside the business.
Those surveyed by Forbes were nearly unanimous in their belief that theft is a significant issue for small retailers — but barely 50% say they would file a claim with insurance or report an incident to authorities, despite multiple states passing laws aimed at cracking down on theft. Businesses are generally focused more on prevention than remediation — a fact supported by the fact that 98% of businesses in the Forbes study say they have implemented theft mitigation measures.
Using Analytics for Threat Mitigation — and Beyond
Fortunately for SMBs, modern security and surveillance solutions have become both more powerful and more accessible in recent years. The mental image of a security guard monitoring a bank of wall monitors has remained stubbornly lodged in the public perception of what retail security looks like, but technology has come a long way since then.
Analog cameras have largely been replaced by network cameras capable of running a wide range of analytics. Modern chipsets have dramatically increased the processing power of today’s devices, meaning that deep learning capabilities are no longer an expensive luxury — they now effectively come standard. That means advanced video analytics aren’t just for large chains with dedicated security budgets — they are both affordable and accessible to SMBs. Better still, those analytics can help improve not just security but business operations as well.
Inside stores, cameras can be used to automatically search for indicators of theft or ORC and notify employees or security personnel. That might include customers loitering in high-value areas or behaving aggressively (or in a manner intended to distract store employees). Events like a large group of customers walking into a jewelry department just before closing can also raise alarm bells, putting store personnel on alert.
These solutions can also be integrated with things like panic buttons; if an employee in the jewelry department feels threatened, they can hit a panic button that triggers a camera to zoom in on the faces of nearby customers to collect forensic evidence. They can also be programmed to alert law enforcement when triggered, ensuring that help arrives quickly. And because modern analytics are good at classifying and categorizing data, they also make it easier to search recordings for specific events, which can help root out internal fraud. If a pattern of shrink emerges that correlates to specific employee schedules or time spent in stock rooms, store management should investigate further.
Even outside the store, these devices can have significant utility — especially when integrated with other systems. Object detection can identify a trespasser approaching the store after hours and trigger a floodlight or audio recording to let the intruder know they are being filmed. This is often enough to discourage further activity, but if the trespasser lingers, the system can be programmed to automatically notify law enforcement.
These same devices also can be programmed to listen for sounds like breaking glass and respond accordingly. They also can be equipped with weapon detection analytics, which can let employees know that a dangerous situation may be unfolding before the offender enters the store. If integrated with access control systems, a weapon detection analytic can even automatically lock the doors to keep the would-be offender out.
But perhaps best of all, today’s analytics also can generate business intelligence insights that SMBs need to keep pace with their competitors. Video analytics can measure the days and times when stores are busiest, helping managers allocate staff more effectively. They can track how customers move through stores, flagging choke points and obstacles for remediation and identifying which displays or products are attracting the most attention. This can also help retailers gauge the success of different promotions, helping them refine their marketing strategies and improve engagement with customers.
Analytics also can be used to alert employees when a queue is forming or a customer appears to be in need of assistance, reducing wait times and improving the customer experience. This all has a measurable effect on a store’s bottom line — and in many cases, solutions once used only for security can effectively pay for themselves.
For SMBs, Security is a Stepping Stone
Small and mid-sized businesses are feeling the impact of the recent rise in retail crime, but modern security solutions are putting more tools than ever in the hands of business owners and security personnel. SMBs may not have the budget to test drive a wide range of solutions the way their larger competitors do, but by examining their needs — and the devices they already have in place — many will find that they can not only protect themselves, but do so in a way that bolsters their bottom line. As SMBs move to address the continuing threat of retail crime, many are discovering that the benefits of modern video analytics go far beyond security.
James Stark is the Segment Development Manager for Retail at Axis Communications. In this capacity, he is responsible for developing strategies and building channel relationships to expand Axis’ presence in the Americas retail market. Stark is a subject matter expert with dynamic experience spearheading cross-functional initiatives by leveraging business data analytics, strategic planning and specialized systems and tools to optimize security measures, risk management and customer experience. He brings more than 30 years working with the retail industry and specializes in loss prevention, safety, ecommerce fraud and supply chain security.