AI enabled Security plays pivotal role to combat Retail Shrinkage
Retail security is one of the benchmarks for today’s retailers. Add in nimble, fast-to-market, convenient and cost effective ways to the mix and the winner’s gain the customers’ loyalty, attention and purse. Choice, Cost and Convenience are the three C’s of retail that will be the crucial differentiator. In order to provide an exceptional customer experience, they are opting for too many stores with an over-supply of products favoring rock bottom and discount prices. This is at the risk of retail shrinkage or product loss/theft that’s directly affecting the balance sheets.
In the retail industry, just a data breach, theft or fraud related rumors can cause a serious dent to your reputation as well as your bottom line. There is even Organized Retail Crime (ORC) that retailers of all sizes continually face. According to NRF’s latest 2020 security survey, over the past five years, retailers have increased their focus on all types of risks. Ecommerce, organized retail crime and cybercrime in particular are increasingly important to retailers. In the survey, 27.5% of the respondents voted ORC to be much more of a priority than ever.
Retail theft or retail shrinkage is an omnipresent factor that’s affecting all retail organizations, big or small, running to the tune of multi-billion dollars, loss of inventory due to shoplifting, pilfering, employee theft, or other errors which cost retailers their reputation and affects customer loyalty.
Combating retail shrinkage with security measures
Retail environment is changing fast with the evolution of e-commerce and a global economy. Retailers are combating the detection, fear and prevention of shoplifting by adopting various advanced security measures such as AI, Machine learning and IoT devices. A security solution that suits their business requirements through loss prevention can make it safer and secure.
While it’s not possible to completely eliminate retail shrinkage, implementing proper software and hardware security solutions along with effective employee training is the key. Retailers have tried several measures including video surveillance as well as mirrors to expose blind spots and investing in real-time security technologies. In retail security there is no “Try”. Its either “Do or Do Not”.
Many retail stores are adopting real-time security technology. Combining security management systems and bio-metric surveillance technology (or facial recognition software), is proving to be a good recipe for combating retail crime. As a threat or violation is discovered in real-time, a notification is sent to the closest security officer, who can step in to manage the situation.
One practical implementation of AI based retail security is the “Vaak Eye”, developed by Japanese based startup Vaak. What makes AI-based shoplifting detection setup a practical proposition is that most of the hardware — security cameras — are usually already in place. By linking it to an analytics tool which uses algorithms to analyze security camera footage for fidgeting, restlessness and other potentially suspicious body language, it alerts staff about potential thieves via a smartphone app. The setup can assist with loss prevention for big and small businesses in a more efficient and effective way.
The top priority for retailer’s w.r.t their security are categorized into:
∎ Organized retail crimes: The process begins with the boosters stealing your product. The fencers then step in and resell the products online or to small distributors. They often add legitimate inventory to the stolen products to escape detection.
∎ Cyber-related incidents: Topping the list is data breaches, card skimming, website hacking, identity thefts, financial frauds etc.
∎ Internal theft: Retail theft by employees, either in-store or at any point in the supply chain and logistics machinery.
∎ Ecommerce crimes: Includes return frauds such as buy online pick up in store (BOPIS), cheque/credit returns, fake receipts etc.
In conclusion, the best way to protect yourself against digital threats is to ensure that the hardware and software that you’re using is compliant and up-to-date with the latest security standards. This is applicable for all the payment and customer data handling programs and equipment’s.