Minimizing Losses in the Retail Sector
retailciooutlook

Minimizing Losses in the Retail Sector

By Retail CIO Outlook | Thursday, September 20, 2018

The National Federation of Retailers reports that more than nine out of ten retailers have become victims of organized retail crime in the last 12 months. While organized retail crime has always taken place, the rates are now accelerating alarmingly. While retail security was earlier limited to security guards or store detectives, loss prevention has become more complex with technological advancement.

A recent research on total retail loss by the Retail Industry Leaders Association looks into losses beyond mere employee thefts, shoplifting, or credit card frauds. Damages, safety accidents, and regulatory fines also lead to substantial losses that cannot be tied down to any one person. Breaches of cybersecurity data also lead to significant losses. While big data and the analytics used for forecasting potential hotspots can aid in reducing crime, there is also the technological risk that the same data that proves beneficial to the retailer can be used against him if it falls into the wrong hands. Shady deals are no longer limited to flea markets or street corners, social media sites like Craigslist and eBay can be used to convert stolen goods to cash.

The retail market is reinventing itself with the influx of new technology, including mobile POS, ship-from-store, e-commerce as well as the ability to buy goods online but pick them from the store. These variables introduce several unintentional mistakes or even the chances for abuse in the retail sector.

The use of mobile POS systems is rising in Europe. While the penetration of this technology is not yet exceedingly high, there are logistical issues that one should be aware of. Self-checkout systems are a weak spot in busy stores, hence improving the video analytics has become a necessity. The use of RFID tags to monitor the movement of valuable goods might enhance safety measures already in place. This can be reinforced by encrypting data from card scanners through backend systems to improve security.

The removal of human interaction from the sales equation feeds the information into a network, from which it could easily fall into the wrong hands. The internet of things adds on to this by providing more access points that might aid in breaching cybersecurity.

The new additions to the competitive market challenge people working on loss prevention in the retail sector to reinvent these technologies for minimizing the loss in the industry. As a result, loss prevention workers show an increased focus on safety issues while being OSHA-compliance. The aim, ultimately, is to reduce the loss in the retail arena due to unintentional mistakes as well as organized crime and add value to retail companies.

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