Retailers face challenges from several fronts. These range from losses/shrinkage to poor shopping experience resulting from overcrowding and long waiting times. Luckily, security technologies can help overcome these issues. This article discusses how.
Retail is a US$27.3 trillion industry globally, and sales are expected to rise 4.8 percent to $28.6 in 2023, according to Oberlo. Despite this industry robustness, retailers continue to face various challenges; these include both security and non-security issues. Below we take a look at what these challenges and pain points are.
Shrinkage and losses
Shrinkage and losses, due either to
crime or other reasons, continue to be a major concern.
“Shrinkage, in traditional form, is losses due to administrative errors and functions. While this is still a considerable security issue because it affects the bottom line, internal theft, especially when coupled with external theft, has surpassed shrinkage as the biggest threat to retailers,” said Keith Abuele, Chief Security Officer at Salient Systems. “One of the greatest challenges for especially offline retailers is organized retail crime (ORC). An ongoing concern for retailers, ORC involves a comprehensive network of individuals from ground level shoplifters to high-level business managers. Stolen goods are redistributed to other types of retailers, including smaller independently owned markets, social media, and e-commerce sites. This is an ongoing battle that retailers have had for more than 40 years and is not something that will be fixed overnight.”
“Not only do retailers have to contend with a rapidly changing economic landscape, they continue to struggle with the task of loss prevention. The age-old threats to profitability posed by internal and external shrinkage remains a top priority,” said Jason Burrows, Regional Sales Director for Western U.S. at IDIS. “Today, security managers, loss prevention, and profit protection managers are dealing with a wide array of shrink challenges. These range from staff and returns fraud, sweethearting, deceptive self-scanning, organized crime gangs, and shoplifting.”
Pandemic impact
COVID has also produced a huge impact on retail, leaving retailers with various challenges in the
pandemic and post-pandemic era.
“The pandemic and ensuing lockdowns that came along with it wreaked havoc on many industry sectors. Retail ranks among those hardest hit. Disruption ran a wide gamut, and retailers had to quickly rise to the challenge of adhering to and enforcing health and safety guidelines, including social distancing requirements, people counting and occupancy control, and the wearing of facial masks,” Burrows said.
Operations/shopping experience
Operations-wise, a shortage in labor has led to stores being understaffed to deal with overcrowding, disputes and COVID guidelines enforcement. Closely related to this is providing a good
shopping experience, which has also become more important than ever amid fiercer competition.
“When discussing safety and security in retail there tends to be a focus on activity with criminal intent. However, it’s important to remember the factors which promote a positive customer experience. In physical stores, customers want to be confident that they are safe and secure while on premises, while also having their retail experience needs met. This could be related to ensuring operations run smoothly on the shop floor, particularly during busier periods,” said Atul Rajput, Director of Channel Partners & End Customers for EMEA at Axis Communications.
How security can help
Today, retailers can use security technologies to overcome those challenges. “Thankfully, physical security solutions are helping to mitigate these risks. Video surveillance is proving a strong weapon in retailers’ arsenals. Footage not only can reveal gaps in security, and unforeseen vulnerabilities, it provides proof of security incidents that can serve as evidence not only in theft situations, but also for false injury claims and threats against staff. In addition, video tech equipped with AI-powered analytics are delivering actionable data that can improve operational efficiencies,” Burrows said.
An open platform video management system can also play a key role helping retailers deal with various issues. “It’s important to use an open video platform so retailers can easily integrate other third-party solutions to help mitigate some of these challenges. For example, weapons detection technology to combat violent acts on the retail floor or in a workplace violence situation; queue detection to better manage a smaller than normal staff, or special self-checkout cameras that record customers when the self-checkout system detects an anomaly in the checkout process,” Abuele said.
Operations-wise, security technologies can also help. “From an operational perspective, cameras can detect queue formation or loitering customers and alert employees to specific areas to provide assistance. The data captured can also be used to inform future decisions regarding operations. For example, if a store is especially busy at certain times then employee scheduling can be reviewed to ensure that the right number of staff are on the shop floor,” Rajput said. “To cater to different modes of product delivery such as ‘Click and Collect,’ cameras can be used to help manage and optimize this experience using data collection and analysis. The retailer can monitor the pick-up area using a camera and get an alert when a customer arrives. Intercoms can be used for two-way communication and staff sent to the customer when needed.”