Top strategies to reduce retail shrinkage

Posted on

Part 1: CCTV Surveillance – The eye in the sky

Each year three per cent of retail sales is written off to the wasteland of retail shrink. Comprising the elements of shoplifting, employee theft, fraud and inventory error, this shrinkage costs the Australian economy $2.7 billion, or $424 per household per year, according to the most recent Global Retail Theft Barometer.

These are no small figures for bricks and mortar retailers already battling it out in an increasingly competitive sphere.

The good news is, while thieves may be savvy, so too is the technology designed to identify them, predict their habits and reduce any loss. In this series we explore the prime strategies used to combat retail shrink, and profile how they can arm retail stores in the ongoing war against theft.

CCTV Surveillance

Considered the most popular form of loss prevention, CCTV surveillance is nothing new. Throughout the course of modern retail history shopkeepers have found it prudent to have a set of eyes carefully roaming the showroom floor. But, where once this was the domain of the burly security guard with a steely gaze, now cameras play a vital role.

First used in WWII, camera surveillance has been rapidly evolving over the past 70 years with a major boost in the 1970s when images could not only be seen but also recorded via video technology. Now there are over 350 million surveillance cameras used globally with digital technology and its remote viewing and storage capability driving the trend.

Modern camera surveillance

Modern camera surveillance is an important element of any loss prevention strategy and it’s more affordable, easier to install and offers additional benefits to its predecessors.

With digital replacing analogue, newer systems work by turning images and audio into data which can be transmitted over a network or the internet. IP (internet protocol) CCTV, as it’s known, offers the following benefits:

  • Higher resolution and video and image quality
  • Improved and more advanced file and storage options
  • Easier and less time consuming installation
  • Remote access and viewing capabilities

Not only does this visible camera surveillance deter and detect thieves but it also secures retail premises, and protects staff.

Additional benefits

CCTV uses aren’t limited to a watchful eye in the sky to combat theft, its deployment can also be part of a wider store management strategy used to improve the customer experience, predict shopper habits, and hone staff interaction. And this happens in a number of ways:

Store management – By combining CCTV surveillance with traffic counting and heat mapping technology, retailers are better positioned to understand the ebb and flow of consumer habits throughout the day. It provides a unique insight into when a store is likely to be busy and how well staffed it is at the time.

Meanwhile knowledge and viewing of busy periods combined with POS sales transactions provides key information on sales conversion rates. Monitoring also allows management to see their staff in action and further hone training to suit.

Further integrations – No one security strategy is likely to combat all retail theft, with experts noting the best security encompasses a number of different systems. By integrating camera surveillance with additional layers of security like electronic article surveillance (EAS) and (Radio Frequency Identification (RFID) tags, retailers can be alerted to items leaving the shop floor and catch the thief in action via CCTV.

Internal theft control – While 39% of Australia’s retail shrinkage is attributed to common shoplifting, a whopping 25% is committed at the hands of employees. That makes monitoring the register and storeroom almost as important as watching the shop floor.

Interlinking – America’s National Retail Federation Vice President of Loss Prevention Bob Moraca told Security Magazine surveillance practices are not only becoming more sophisticated courtesy of facial recognition software, but there’s a trend towards working surveillance of one entity with another.

That means a retailer within a mall may be targeted for theft, the images are caught on that store’s camera, then security within the mall then CCTV on the street, making the tracking of thieves easier.

Mobile capability – As with most things, the mobile age has led to new advancements in CCTV, with ‘plug and play’ IP cameras offering a highly affordable means to implement inshore CCTV. Requiring minimal time and disruption for installation, footage can then be accessed from anywhere, at any time, even on mobile devices like smartphones or iPads.

  • Sign up to our Newsletter