Retail security plays an essential part in business for retailers as shrink is a huge problem. The National Retail Federation’s 2022 National Retail Security Survey reveals shrink costs of almost $100 billion in 2022. Retail security helps protect the safety of its employees and shoppers as well as the bottom line by reducing shrink.
What Loss Prevention Data Says About Retail Security
While many factors affect shrink, the primary one is external theft. It turns out 37% of retailers experienced external theft with organized retail crime (ORC) incidents increasing by almost 27% in 2021. Employee and internal theft made up almost 29% of the shrink while 25% was due to process and control failures. Of course, the loss of goods is a serious problem that hits the bottom line. Therefore, the need for proactive security.
Unfortunately, ORC incidents are growing more dangerous. Eight in 10 retailers say ORC-related violence and aggression have increased in the last year. This includes guest-on-associate violence in which 49% said it’s somewhat more and one-third indicate it has grown much more.
In-store, ecommerce, and omnichannel fraud are also on the rise. As a result of these challenges, 43% of those responding to the survey are increasing their budgets for loss prevention.
Cargo theft and supply chain disruptions continue to be problems for retail centers. Almost half responding to the survey said they’ve experienced cargo theft en route from distribution centers to stores while 43% indicated cargo theft occurred at the retailer.
Retail Security Technology Investments
Technology is the most prevalent out of the budgetary categories with 60% planning to increase it. However, there is something that’s worrisome as about one-third plan to increase their budget for security guards. An explanation is coming later in the article.
Retailers are shifting to technology or intelligence-based loss prevention practices. This is due to these technologies having the ability to provide more data about offenders and loss events. The retail loss prevention technologies with the largest percentage of implementation or plans to implement are RFID systems, artificial in point-of-sale and self-check-out, license plate recognition, self-service locking cases or lockers, and perimeter surveillance.
These are not surprising considering the risks identified in the retail store crime statistics. RFID systems can do many things. It allows retailers to manage and track inventory in the supply chain. They can look up current in-store inventory information or use RFID to identify and recover stolen items.
Video analytics in point-of-sale and self-checkout systems have the ability to detect crimes like a ticket- or product-switching. This is when the offender scans the barcode of a less expensive item instead of the barcode for a more expensive item. Considering the number of internal thefts reported, “sweetheart” is a concern. Sweetheart incidents happen when an employee gives favorable treatment to a “sweetheart” or someone close to them.
Video analytics also helps with crime investigations as well as determining where problems occur to help close those gaps. This technology levels up video surveillance.
Reactive vs. Proactive Retail Security
Reactive retail security means that retailers don’t do anything until after a crime has occurred. This approach is often more expensive than proactive security. It requires retailers to pay for insurance claims, legal fees, and lost sales.
Additionally, reactive security is less effective in deterring crime. Criminals know that retailers will not likely take action if they don’t see any evidence of a crime. This makes it easier for criminals to operate undetected.
Proactive retail security involves acting before a crime happens. This approach is often more effective and less expensive than reactive security. Proactive security helps deter crime in many ways. For example, security cameras make it harder for crooks to go undetected.
Adding video analytics and trained human monitoring operators watching the cameras helps level up retail security. As soon as they spot a potential problem, they can alert authorities.
Here are the top four reasons to be proactive with retail security:
- Crime occurs 24/7.
- Shrink continues to be a problem.
- Internal theft hasn’t slowed down.
- Protect more than inventory.
Proactive security could save money compared to reactive security in the following five ways.
1. Helps prevent expensive incidents
By identifying and addressing vulnerabilities in advance, proactive security measures help deter security breaches, theft, vandalism, cyberattacks, data leaks, and other incidents. When not stopped, these incidents put a huge financial hit on the retailer. Their brand can also be affected as shoppers find out about the crime and avoid the retailer.
Preventing such incidents is more cost-effective than dealing with the aftermath. The aftermath may require investigation, recovery, remediation, legal expenses, reputational damage, and potential financial penalties.
2. Helps avoid downtime and business disruptions
Security incidents can lead to significant downtime and disruptions to business operations. People may not be able to shop in the store because of the damage. Repairs have to be done and they’re not always fast.
Proactive security minimizes these interruptions with robust security controls, risk assessments, and staying ahead of emerging threats. By deterring or minimizing the impact of security incidents, proactive security measures help ensure business continuity.
3. Helps save on incident response costs
The crime and its aftermath require significant expenses as the retailer will need to hire incident response teams, conduct forensic investigations, repair the damage, and implement new security measures to prevent similar incidents.
By addressing vulnerabilities and implementing effective security controls, businesses lower the risk of crime and its aftermath. They won’t need to do extensive incident response activities and pay its associated costs.
4. Helps enhance compliance
Retailers must meet specific security regulations and compliance requirements. Proactive security measures help retailers stay in compliance as they’ll have security controls, regular audits, and close security holes quickly.
A retailer that’s not in compliance may face high financial penalties, legal consequences, and damage to reputation. The more of these they encounter, the higher the cost it will be.
5. Helps maintain customer trust and loyalty
Security incidents erode customer trust and loyalty. In doing so, customers leave the business and take their money elsewhere. Proactive security measures demonstrate a commitment to safeguarding customer data, maintaining privacy, and protecting customers and employees.
This helps boost customer trust and loyalty. Additionally, it helps businesses retain customers, attract new ones, and maintain a positive brand image. All of these have long-term financial benefits.
Overall, investing in proactive security measures helps protect a retailer’s assets, reduces financial risks, and saves money in the long run by preventing or minimizing the impact of security incidents.
How Security Cameras with Video Analytics Boosts Retail Security
Now back to why security guards may not be a good investment. Part of the problem is that organized retail crime has become more brazen and aggressive. This is why a lot of retailers tell their employees not to stop the crime. It can lead to more danger as it’ll affect public safety and put the retail store at a higher risk of violence.
Many security guards can’t carry a weapon. In some areas, they’re not allowed to pursue suspects. In some states, the police cut back on non-emergency crimes and can’t chase crooks. ORC may know about this hands-off policy and won’t fear getting caught. Security guards do not have near the same level of skill as heavily trained police officers do. The cost of hiring security guards multiplies with every guard you hire.
Often, retailers jack up the prices to offset the losses from thefts and shrink. There’s a way to help reduce this and get a fast return on investment with the right proactive security. You also gain something better than security guards, which is more eyes on the entire perimeter of the retail property and typically a quicker response. Security cameras with video analytics and trained monitoring operators make this possible.
Here’s why more companies are investing in artificial intelligence capabilities and video analytics for video cameras. This combination of video analytics and humans can watch everything and help catch something before anything happens. Video analytics has the ability to scan the cameras in real time for potential matches of preprogrammed scenarios. As soon as it identifies a match, it notifies the human monitoring operator.
The operator reviews the video and can respond appropriately to the situation, following strict processes. The monitoring operator is not on the retailer’s property. They’re located in a safe place elsewhere. Unlike security guards, their lives are never at risk. This helps ensure they handle the situation correctly.
They can warn suspects they are being watched via an onsite speaker. If the warning doesn’t deter them, then the operator can call the police while tracking the intruders’ actions. The monitoring operator can stay on the call with the dispatcher until the police show up and locate the suspects.
Unlike security guards, remote video surveillance can record and may save all footage. This provides evidence to help law enforcement, insurance agents, and anyone else who needs it. Companies use security cameras to help improve safety as the footage can be used to show any safety hazards at the property. Eliminating safety hazards and having recordings can help protect the retailer from liability issues.
It’s possible to get your insurance premiums lowered after implementing remote video surveillance with monitoring. Insurers see this as proof that you’ve reduced the retail store’s risk. This is why it’s important to work with a retail security vendor who has retail experience. They understand the challenges and help close security gaps.
Video surveillance technology has come a long way in recent years. It’s more affordable and more effective. Most importantly, it’s a proactive security solution. To learn more about retail security, check out the complete guide to security at a retail center or contact us.
Texas Private Security License Number: B14187.
