As if retailers didn’t have enough to worry about, inventory losses continue to be a vexing problem that hits their bottom line quite hard. According to the following article, various security and systems enhancements can improve their plight.
Brick-and-mortar retail spaces offer myriad opportunities for systems integrators, particularly in the areas of shrink control and asset protection. Statistics show us that having a wide array of up-to-date, high-tech security services available is essential for retail clients, and security professionals can be profitable in this market by staying ahead of the curve providing solutions for this growing market.
According to the 2016 National Retail Security Survey, conducted by the National Retail Federation (NRF) and the University of Florida, U.S. “retailers’ inventory shrink averaged 1.38% of retail sales, or $45.2 billion in 2015, up by $1.2 billion from 2014. 47% percent of retailers surveyed reported increases in overall inventory shrink in 2015, with shoplifting accounting for the greatest cause with an average loss of $377 per incident (39%), up nearly $60 from 2014.”
The NRF report also found that robberies cost an average of $8,180, up from $2,465, with the rise in 2015 “driven by an increase in jewelry stores reporting extremely high average losses.”
The global retail market lost more than $123 billion between 2014 and 2015, according to the latest Global Retail Theft Barometer study. That represents 1.23% of total retail sales over the same period and, the study notes, 39% of the lost revenue involved dishonest employees, 38% shoplifters, and 16% administrative, non-criminal sources.
The Global Retail Theft Barometer adds that the most common merchandise stolen were items that are easy to conceal: footwear, batteries, accessories for mobile devices, alcoholic beverages and razor blades. In addition to common shrinkage, the 2015 survey indicates robbery continues to be a growing concern, as well as workplace violence and hold-up/duress. Surprisingly enough, however, it’s not always largest chain operations that experience the greatest losses.
Brick and mortar stores are suffering a major downturn due to industry forces, and no relief is in sight. While store inventory control and merchandise tracking systems have significantly improved in recent years, inventory shrinkage still remains a serious problem especially due to theft, financial errors, and fraud. Staff cutbacks and limited financial resources make this a very difficult problem to solve.
Overview by Raymond Pucci, Associate Director, Research Services at Mercator Advisory Group
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