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How to Leverage Enhanced Evidence Packages to Combat Shrink

November 18, 2024

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Global retail theft costs retailers a staggering £289 billion ($379 billion) a year, and – according to recent reports – that number is only expected to increase.

Organised retail crime (ORC), theft and in-store violence are still on the rise. From countries in North America to the U.K, Spain, and Germany in Europe and others in Oceania, retailers nearly everywhere will have to refresh their approaches to combating shrink in one form or another.

This is a big ask, bearing in mind that retailers have traditionally had limited data on theft, leading to under-reporting and unprosecuted crime. Compiling fact-based evidence packages to send to law enforcement could begin to really make a difference when it comes to closing cases of shoplifting, creating stronger environments of deterrence in order to dissuade future thieves.

‘Deterrence equals capability times will,’ said Ned McCauley, retail technology business consultant. ‘It’s an old military term that’s appropriate for describing where loss prevention and law enforcement teams stand today.’

‘In order to deter shoplifters, you need the capabilities to do so – which we now have – but nothing can happen until you pair those capabilities with the will to follow through. The good news is that the will is starting to emerge because there are now tools at retailers’ disposal to provide law enforcement with everything they need to catch shoplifters.’

Here’s a closer look at those tools, along with all the steps you should take in order to start enhancing your evidence packages to aid law enforcement and combat shrink.

How Under-reporting and Lack of Prosecution Hurts Retailers

While no retailer wants to suffer a loss event, once it happens, action is needed. However, it’s in the past, and store managers know that their first responsibility is always in the here and now, ensuring that daily operations flow smoothly to protect sales and provide a safe store environment.

From that perspective, it’s not difficult to see how reporting theft could fall by the wayside. Why disrupt daily operations to gather evidence, viewing hours of CCTV recordings or checking inventory reports and transaction logs, when doing so could lead to unserved customers or longer checkout queues?

Declining to report, however, is not without cost. Failing to follow through on pursuing thieves risks your stores being labelled as easy targets. While focusing on the day’s sales after a loss event may help in the moment, it can lead to a revolving door of even more losses down the line.

Not only could this recurrence of theft and fraud lead to even more financial losses, it could also place your employees and customers at risk. Aside from the obvious safety implications, high-theft shopping environments have negative effects on the shopping experience, employee morale and customer trust.

Of course, under-reporting on the part of retailers is only one part of the equation. From lack of theft event data to low prioritisation, cases of shoplifting are difficult for law enforcement agencies to solve even when they are reported. In order to support law enforcement with fact-based evidence packages, however, retailers will need to leverage equally enhanced tools.

Collecting Evidence Through a Connected Estate

What does it take to support law enforcement, catch shoplifters and safeguard your assistants and customers?

These three technologies work together to form a connected estate of solutions capable of providing law enforcement with enhanced evidence packages.

  1. RFID-tagged merchandise
    That is, Radio Frequency Identification. By tagging your products with RFID tags and labels, you will enable them to be read digitally by exit sensors and store software.
  2. EAS
    Next, you will need an RFID-based Electronic Article Surveillance system (EAS) to collect and track your store’s RFID-tagged stock.
  3. Shrink Analytics
    With tagged stock and integrated store systems, you can now begin to analyse shrink when it occurs in your stores. It is these automated, analytic capabilities that will be key to compiling comprehensive evidence packages.

Enhancing Evidence with Analytics

Precision is accuracy that is repeatable, and store data collected through a connected estate of RFID, EAS and other store systems provides the kind of trusted, contextualised and unbiased data you need in order to reveal the ‘who, what, when, where and why’ behind each shrink event.

‘It’s easy to get overwhelmed by all the data available to retailers today,’ said Jaime Kress, RFID sales director for North America at Sensormatic Solutions. ‘In many cases, there’s just too much raw data to extract meaningful insights. But with the right shrink analytics, retailers get just the pure, focused, actionable data they need to glean insight with none of the noise.’

Advanced tools, such as the cloud-based Shrink Analyzer application from Sensormatic Solutions, collect data in a single location from item-level inventory, exits, the point of sale and CCTV footage. With speed being a critical factor in conviction rates, you need a tool that allows you to view, gather and synchronise this key data quickly and easily.

What does this look like in practice? With the Shrink Analyzer app, a store manager can now receive notifications from RFID-tagged products that have passed through the exit system without having been paid for. Without skipping a beat, they can now easily find time-stamped video evidence of the event together with all stolen product details presented in a ready-to-send package for law enforcement.

The Analytic Advantage

While sustainable, long-term deterrence to shoplifting will be built by increasing the reporting and conviction rates of retail crime, shrink analytics can help you to strengthen your own in-store operations as well.

Item-level exception-based reporting at the exits can help your loss prevention team to gain greater clarity into the finite details behind lost merchandise. By understanding the ‘who, what, when and where’ behind each lost product, you will be able to identify the root causes of shrink at your stores. Is it external, administrative, supplier-based, or something else that previously wasn’t even on your radar?

‘The precision analytics available in the Shrink Analyzer app provide insight into the external sources of theft like never before,’ said Eric York, business analyst at Sensormatic Solutions. ‘The ability to predict and budget shrink has been difficult for many years, but with the accurate exit-read data available through shrink analytics, retailers can receive data in a detailed scenario that can be transformative to how loss prevention teams combat shrink.’

Even better, shrink analytics can help you to measure the loss prevention tactics you deploy to combat these newly revealed root causes of shrink. The same automated speed and accuracy that revealed vulnerabilities will be able to measure the effectiveness of your mitigation efforts so that you and your team can respond to ORC trends and identify optimal deterrence strategies faster.

Key Points

To stem the rising tide of retail theft, retailers will need to adopt a more proactive and tech-savvy approach to combating shrink.

Enhanced evidence packages, powered by the connected estate of solutions such as RFID, EAS and shrink analytics, will be key to supporting law enforcement in the effort to catch and deter potential thieves.

Through the power of the Shrink Analyzer app, retailers can transform their stores’ data into actionable loss prevention insights. With this clear view into the ‘who, what, when, where and why’ behind every loss event, retailers can address the root causes of shrink more effectively in order to protect their products, profits and – most importantly – people.

Contact the experts at Sensormatic Solutions to discover all the ways in which shrink analytics can transform your loss prevention strategy.

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