With every new year, businesses should take stock of where they are and what they intend to achieve in the months to come.
For retailers, a critical area, as always, is loss prevention. Retail changed a lot during the pandemic, and it will only do so more rapidly as consumers increasingly look for the human experience of returning to malls and stores in 2024, which means loss prevention professionals will need to make key business decisions on how to leverage their technology budgets. This requires smart video security vendors to be flexible and creative with their solutions, how they are deployed, and even which budget they can be paid out of.
New retail models bring new risks
BOPIS (buy online, pick up in-store) was pegged as one of those “retail trends to watch in 2020.” While the BOPIS model still exists, in 2023 more consumers are wanting the classic retail experience.
However, the point remains true:
With every change in how consumers can complete a purchase comes a fresh set of loss prevention risks for the retailer.
“How do you handle customers who don’t have the right ID to pick-up orders? Or what about allowing people to designate who will pick-up a package? Are you going to use a store pick-up code?”Lisa Brock, national director of investigations at Best Buy, said to Loss Prevention Magazinein 2019.
Part of the solution is to have that pick-up counter under cloud video surveillance. Simply marking all BOPIS orders clearly in receipt text makes it easy to search for all of these transactions and review them in the Solink app.
Organized retail crime impacting your profitability
Battling organized retail crime (ORC) also continues to be a challenge for retailers heading into 2023. In the U.S. National Retail Federation’s annual ORC report released in December, “ORC is a persistent and growing problem in the United States that available evidence
suggests is growing in its scope and complexity.”
In one scenario, merchandise is stolen while it’s en route from a distribution center. It will then be “returned” for store credit, usually in the form of gift cards. Those cards are then sold for cash.
If Solink’s smart video security system were part of this logistics operation, the business would have been notified of the missing items as soon as they did not arrive at the store they were intended for. Then, the items based on the SKU or serial number could have been blacklisted from ‘no receipt return’ at stores based on geography.
According to the report, the top strategies to combat ORC include changing return policies, changing POS policies, improving employee screening and adjusting how trespassing is handled. Equally important, of course, is having a visual record of those refund transactions at the POS that may involve stolen goods.
The classics
While ORC is a new, persistent, and growing threat, retailers of all stripes continue to suffer from the same old loss and shrinkage problems as well. You should be mindful of these ongoing threats and not focus solely on ORC:
- Shoplifting: Average dollar loss per incident continues to hold steady despite security measures such as surveillance cameras and digitized tags that set off alarms.
- Employee theft: Internal theft accounts for half of all retail shrinkage. It may show up in the inventory, or in a cash drawer that keeps coming up short.
- Administrative error: This includes simple pricing mistakes, as well as poor record keeping and inventory management.
- Vendor fraud: This arises in those cases where outside vendors are trusted to come into the store to restock inventory.
Focusing on all types of shrink (operational, internal, and external) is the only way to truly reduce inventory shrinkage.
What can you do?
Cloud-based video surveillance can prove a useful deterrent, source of evidence, or staff training resource in all the following scenarios:
- Customer identity problems at the BOPIS counter
- Theft of a delivery left on the loading dock
- A break-in
- Employee theft at the POS
- A customer refunding stolen goods
- Cash disappearing from the back office
- Shoplifting
We could go on, but you get the idea. Regardless of the situation, the perpetrator is banking on one thing: not getting caught. They operate on the hope that they will not be seen, or at least, not be seen well enough to be identified and tied to the crime. This is the base of the employee theft triangle.
Investing in smart video security
With legacy video surveillance systems, perpetrators often didn’t have to worry, even if they walked right by security cameras in your store. That’s why it is so important to equip your business with a modern, intelligent, and data-driven video surveillance system.
Modern smart video security technology integrates the latest digital camera technology with a cloud video management system and a mobile app. Features like motion- and event-based search that allow hours of video surveillance footage to be screened for specific red flags in a matter of seconds combine with the ability to integrate with other software systems used in the business—staff scheduling, POS, inventory, and access control systems.
With this technology, retailers can be far more proactive, and not just reactive, when it comes to loss prevention.
Is 2023 the year for your business to invest in new loss prevention technology?
