Security is an important element in retail. Amid increased theft, violence and other crimes against retail stores, retailers are turning to security solutions to address those issues.
Security is an important element in retail. Amid increased theft, violence and other crimes against retail stores, retailers are turning to
security solutions to address those issues. This article takes a closer look at potential risks facing retailers and how security solutions in retail can help.
Physical retail stores play an important role in the society. They provide a venue for shoppers to buy goods and products that are necessary or of interest to them. Meanwhile, amid an increase in online sales, physical stores haven’t seen a decline. According to the National Retail Federation (NRF), 9 of the top 10 e-commerce websites are run by retailers that also operate bricks-and-mortar stores.
Potential risks that can arise in a retail environment
Retailers constantly endeavor to make their stores safe and secure for shoppers and staff alike. However, such efforts can often be undermined by security threats and risks. Below we summarize what are some of the potential risks that can arise in a retail environment
External/internal theft
Retail
shrinkage refers to the loss of store items that’s not a result of sales. Shrinkage can be caused by various factors, such as
shoplifting and internal theft.
“Shoplifting is the most common cause of retail shrinkage in the U.S. with retailers citing external theft, including organized retail crime, followed by employee internal theft and inventory process failures. According to the NRF, retailers lose billions of dollars every year to internal and external shrink – the latest estimate puts the loss at US$94 billion annually. In the UK, shoplifting hit a remarkable record high in April this year across England and Wales. With more than 1,300 incidents per day, up from 870 in 2022, the cost of retail crime is now estimated to have doubled in a single year, to 3.3 billion pounds,” said Jamie Barnfield, Senior Sales Director at IDIS.
Organized retail crime
According to Barnfield, another unwelcome trend is the continued increase in shoplifting as part of organized retail crime (ORC), with perpetrators engaging in other illegal activities too, including drug trafficking or human trafficking.
“These criminals are more likely to target CRAVED items than others. CRAVED is an acronym that refers to items that are: (1) concealable; (2) removable; (3) available; (4) valuable; (5) enjoyable; and (6) disposable. Items that have more of these characteristics are more likely to be stolen,” Barnfield said. “Top categories include apparel, health and beauty, electronic appliances, accessories, food and beverage, footwear, home furnishings and housewares, home improvement, eyewear, office supplies, infant care, and toys. There is a high demand for this type of stolen merchandise. Thieves can also more easily sell stolen goods on the black market or online, often for a significant profit, creating a strong incentive to steal.”
Acts of violence
Finally, acts of violence ranging from vandalism to physical attacks also threaten security in retail.
“Retailers are among the first to be affected by wider problems in society and these businesses can often feel as if they are on the front line. For example, whenever we see increased cost-of-living stresses, greater social unrest, or rising levels of aggression, the harmful effects quickly find their way into shopping malls, onto high streets, and into stores. And retail staff are ill-equipped to deal with them,” Barnfield said. “Increasingly it is being reported that incidents in stores involve not just theft but aggression and violence against staff, sexual and racial abuse, and the threat or use of weapons (guns predominantly in the U.S., knives elsewhere). The latest figures from the British Retail Consortium (BRC) suggest a 50 percent year-on-year increase in the use of weapons in shop theft incidents.
Why is security important in the retail industry
The aforementioned threats and risks underscore the importance of security in retail, which helps retailers reduce shrinkage, ensure customer and employee safety, and maintain the reputation of their brand.
“Having a robust physical security strategy is fundamental for retailers to not only safeguard individuals and property but also to protect the brand's reputation. Security plays a vital role in shrinkage control as retail theft, both internal and external, can account for 1 to 4 percent of revenues, depending on the specific market segment. Effective security measures can significantly reduce these losses, directly impacting profitability. Lastly, robust physical security helps mitigate liability and risk management, minimizing the potential for costly litigation,” said Scott Thomas, National Director for Signature Brands at Genetec.
“Retailers constantly face losses from theft and internal shrink. At the same time, organized retail crime incidents have become commonplace for many organizations. Comprehensive, integrated security systems have never been more critical. Retailers also can’t afford any negative brand impacts from security breaches,” said Rui Barbosa, Category Manager for Surveillance Products at i-PRO.
We’ll discuss retail security solutions in detail in upcoming articles.