Operators are increasingly focused on loss prevention, and for good reason – shrinkage continues to be a billion dollar problem in retail. Products are disappearing from shelves faster than you can one-click order that same product on Amazon – the other threat to brick and mortar retailers.
The annual National Retail Security Survey from the University of Florida analyzed retail shrinkage in the United States. Although there were some positive signs, as some of the spikes from the 2017 survey dipped back to align with more historical norms, overall shrink continues to climb.
Four numbers stood out in the results:
- 20%: percentage of respondents reporting shrink at 2% of sales or more; down from 23% in 2017, but still up 3% from 2015
- $46.8 billion: total losses resulting from retail shrinkage; down from last year’s report of $48.9, but still up over $1 billion since 2015
- 35%: percentage of robberies netting $10,000+; up over 12% from 2017
- 79.5%: percentage of respondents who plan to increase or keep their same LP spend from 2017
Less than half of retailers surveyed reported increases in inventory shrink. Shrink is divided into shoplifting and organized retail crime (35.7%), employee theft/internal (33.2%), administrative paperwork (18.8%),unknown loss (6.6%) and vendor fraud or error (5.8%).
Overall, there are a few silver linings in these survey results, with dips in average losses from 2017. However, these reported numbers in loss/shrink are still up significantly from 2014. The improved results from last year may be attributed to the increased spend and attention given to loss prevention.
“Retailers are proactive in combating criminal activity in their stores, but acknowledge that they still have a lot of work left to do,” said Bob Moraca, NRF Vice President of Loss Prevention. “The job is made much more difficult when loss prevention experts can’t get the money they need to beef up their staffs and resources. Retail executives need to realize that money spent on preventing losses is money that improves the bottom line.”
To prevent loss, retail executives and operators need a better vantage point into their stores. They need to understand weaknesses that make them vulnerable to shoplifting and return fraud; then, operators can intervene and train employees. Operators also need to know how their store and field level employees are performing if they want to prevent employee theft.
This is where Zenput comes in – it’s a practical, cost-effective solution to improve daily retail operations. An annual Zenput subscription is less than the cost of one shoplifting incident. Schedule a demo to learn more.