Home Common Macro View of Security for Retail in India and Opportunities Present

Macro View of Security for Retail in India and Opportunities Present

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The story of the modern Indian Retail Industry began a decade back, with meteoric transformation of the industry from a largely unbranded industry comprising of small retailers to an industry dominated by large eminent domestic and global players.  Today the Indian retail industry is one of world’s top five retail markets in terms of economic value fueled by the rising aspirational middle class, a shift in consumer buying behaviour coupled with rapid urbanization of metros and semi metros which has contributed to the immense growth of the organized retail industry. The sector is flocked by large Indian retailers like Pantaloons, , Croma, Reliance, Globus, Shopper’s Stop which has drawn increased interest and investment from global retail chains enabling the industry to grow at an exponential pace.

Given the growing scale and scope of the industry, the retail industry today faces increased threats with respect to cases of shoplifting and thefts which is significantly impacting the profitability of the retailers who are selling products under short margin. Today shoplifting accounts for 5-7% of loss revenue and merchandise, often posing as one of the largest challenges faced by retailers and hence their increased focus on improving loss prevention solutions that maximize growth and profitability.

Given the sheer size of the retail industry and with a large part being unorganized, many retail companies do not adhere to appropriate security measures in terms of staff required vis-à-vis the size of the outlet,  footfall in the stores especially during holidays and festive seasons. To combat these concerns, the security industry globally and in India has developed Electronic Article Surveillance (EAS) as a technological method for preventing shoplifting by protecting shoplifted articles as they pass through a gated area in a store.

EAS comprises of three components including electronic Antenna, Deactivator or Detacher and Electronic Tags. Security companies are developing efficient, durable and intelligently designed anti-theft systems engineered to detect and deactivate thefts which are further customized for specific retail requirements. The hard tags/labels comprises of electronic sensors that are attached to merchandise, deactivators and detachers to remove or inactivate the tags and systems and plays a crucial role in detecting thefts at store exits.  Over a span of time, EAS has played a vital role in reducing thefts by 60% proving to be more reliable than other security system. Recognizing its vast potential, new EAS technologies are being produced not only to reduce shoplifting, but also to help increase sales, lower labor costs, speed inventory, improve stockroom logistics and much more!

Technology is ubiquitous in the developing security systems and continues to do so even in the retail industry. Security in the retail industry is broadly classified under three technologies, including RF Technologies especially relevant in clothing retailers, department stores and supermarkets, AM Technologies  relevant for clothing retailers and department stores, as well as outlets selling cosmetics, hardware and electrical goods and EM Technologies which is used in libraries, pharmacies and cosmetics stores, supermarkets, hardware stores and electrical goods stores, wherein all three or a combination of a two are used to fortify security networks in the retail industry.

In the recent years, we have observed that many Indian retail outlets are following source tagging which is a process by which Electronic Article Surveillance (EAS) anti-theft labels and / or hard tags are incorporated into merchandise at the manufacturing, packaging, or third party level. Once implemented, Source Tagging helps increase product sales and profitability as the product reaches the store protected without altering its image and without damaging the product. Another important dimension of security in the retail industry is the usage of electronic surveillance and access control mainly comprising of CCTV’s etc which plays a pivotal role in monitoring footfall in outlets and preventing thefts by shoppers as well as malpractices by internal staff. A combination of electronic surveillance and EAS strengthens security networks in developing effective anti-shoplifting systems.

Today the retail industry is booming and the future looks bright, with foray of many global retail giants like Walmart and in the Indian market and influx of world-class malls and shopping centers especially in Tier-II and III markets. Apart from foreign players eyeing the Indian market, domestic retail brands like , , Croma & are aggressively planning on increasing the number of their retail outlets offering a vast opportunity for increasing security industry. While the Indian retail industry (comprising of organised and unorganised retail) is expected to touch a whopping Rs. 47 trillion (US$ 782.23 billion) by 2016–17, expanding at a compounded annual growth rate (CAGR) of 15 per cent, the security industry within the retail industry is also growing 10% annually.
Today both foreign and domestic retail companies understand the importance of applying robust security systems for the long term, to reduce retail shrinkage and optimize business profitability. We believe the industry is poised for growth.

About the author: Chetanya Vali, Vice President-Entrance Control, Perimeter Protection and Retail Gunnebo India