According to the Global Retail Theft Barometer (GRTB) study, India with 2.7 percent of retail shrinkage ranks the highest in the world. The corresponding global figure is 1.36 percent, almost half of the Indian figure. In this scenario, simply employing uniformed personnel at the storefront is not enough. Ramesh Iyer, Vice Chairman & CEO, Topsgrup, India’s largest private security company, spoke to Nivedita Jayaram Pawar on the security concerns of retailers and some solutions.
Who are some of the retail clients you are currently working with?
Some of our major retail clients include Shoppers Stop, Madhura Fashion, Trent Ltd., Store One Retail India Ltd., Cinemax/PVR and many more.
What are the common retail security concerns of a retailer?
Security is one of the primary concerns faced by retail stores today. The list of concerns includes direct theft from walk-in shoplifters, accidental loss and product diversion. Another major concern is easy access for internal robberies by employees, especially due to inefficient and insufficient security provisions, parallel to the size and requirement of the retail chain.
In India, a number of outlets and retail chains do not follow a measuring system to gauge the number of minimum staff required in proportion to the size of the shopping mall, number of customers who visit the mall, and the intensity of the requirement based on holidays or festive seasons.
What is the primary method used by retailers in India to prevent shrinkage?
The primary cause behind shrinkage in the retail sector is ‘internal theft’, which includes abuse of refund schemes, discounts and majorly credit cards. This aspect is the most overlooked as retailers pay major attention to monitoring customer theft. So the primary action that we at Topsgrup provide when we are hired by retailers is ensuring strict monitoring of internal and external employees to avoid any abuse of products or services.
The other methods used by retailers is deploying special CCTV surveillance teams to monitor shoplifters, as it is the second largest cause of shrinkage and results in significant loss on an annual basis.
The Global Retail Theft Barometer study ranked India highest for its shrinkage. What according to you are the reasons for this loss of revenue?
As mentioned earlier, the two biggest reasons for shrinkage in the retail sector or the loss of revenue are internal and external thefts. In India, it is primarily shoplifting.
In fact, the retail shrinkage in India was the highest in the world even in 2013 at 2.7 percent according to the Global Retail Theft Barometer study. However, lately, retailers in India have increased spending on loss prevention and security.
How does technology help in tackling retail theft? What are some of the technological devices available to retailers today?
Hardware and software technologies, such as EAS antennas, tags, CCTV and other tools can play a major part in reducing shrink. Retailers require a 360-degree loss prevention strategy, which can be strengthened with the support of technology.
There are software available in the market, which connect town-based crime reduction partnerships, allowing them to share information about known gangs of shoplifters. Similarly, the software take a full-spectrum approach to the risk, identifying suspicious behaviour and common modus operandi of customers who ‘forget to pay for products they might have in their shopping trolleys’.
How does RFID help stop retail theft? Is it a necessity for all retailers?
Radio Frequency Identification (RFID) is an emerging trend amongst retailers internationally. As RFID data can be processed and managed in real-time, it helps detect any unprecedented and lopsided activities internally and externally that need quick action. RFID is most effective to monitor combat theft by shoplifters and employees as well as reducing theft as products move through the supply chain.
For instance, a company will know which cases left the warehouse, and if there are any products missing. The retailer will know what discrepancies might have taken place during the process of goods transportation. So RFID brings efficiency in tracking and hence helps in reducing retail theft.
What are the shrink management solutions for today’s retailers?
There are various shrink management solutions available today for retailers. To start with, prevention of internal theft by ensuring that the internal processes are in place – right from the employment of trustworthy staff to management approvals on refunds, credits, employee purchases, etc.
This needs to be followed by prevention of shoplifting by ensuring that expensive products are strategically placed behind the counter, keeping stores neat and uncluttered.
Merchandise visibility solutions are available, which provide retailers with unsurpassed insight to reduce theft as products move through the supply chain. Also, label solutions to secure the products and merchandise ranging from food labels, bottle security, micro cosmetic labels, hard tags, etc ensure product security and a more efficient supply chain.
A robust inventory management system is an effective method for tracking inventory accurately and reducing retail shrinkage.
Nevertheless, technology alone will not eliminate the issue of retail shrinkage. Retailers looking to reduce losses should also strive to provide good customer service and promote high job satisfaction levels among its internal and external stakeholders.
What are the areas inside a store most vulnerable to security issues? How can a retailer guard these?
The most vulnerable areas inside a store are the counters with display items left unattended or at an easily accessible distance, areas that are cluttered and messy, hence not giving a clear indication of any missing items and blind spots on the sales floor,
which may block any vision from CCTV monitoring cameras of security surveillance.
However, the vulnerable areas can be monitored against any security issues by employing well-trained security personnel and attentive sales staff. The staff must be trained to spot suspicious behaviour and ensure there are no blind spots on the sales floor, especially near counters, which are easily accessible or near the cash desk.
Is there a particular layout a retailer should opt for to ensure reduced shrinkage?
The easiest way for retailers to discourage theft in a store is by taking away opportunities to steal. A little thought into the store’s layout and design can prevent theft before a loss occurs. Design the store layout in a way that customers and staff evidently pass the register area; every move should be monitored. Never leave the register unlocked or unattended. Do not display merchandise near the store exits.
Keep the store neat and orderly. Full displays and straightened shelves allow employees to see at a glance if something is missing. Also use mirrors to eliminate blind spots in corners that might give leeway to shoplifters. Maintain adequate lighting in all areas of the store; keep fixtures and displays low for better visibility. Always place small, expensive items in locked cabinets or behind the counter. Rest rooms and dressing areas should be watched at all times. Keep dressing rooms locked and limit the number of items taken in by each customer. Use alarms on unlocked exits and close or block off unused checkout aisles. Signs and posters reinforcing security messages should be used. Post anti-shoplifting signs like ‘Shoplifters Will Be Prosecuted’ in clearly visible locations. The use of security equipment, such as closed circuit television, security tags and two-way mirrors and uniformed security guards, are the most powerful visual deterrents to the shoplifter.
A great deal of store larceny is committed by employees. Is there a smart way to screen out potential problems when hiring new workers?
The surest way to avoid internal thefts by employees is to effectively screen the right candidates when hiring. You need to take charge of the interview process and hire trustworthy candidates. It is also important to hire staff that are instinctively vigilant or else train the staff to get accustomed to carefully monitoring movement within the store. This could include behaviour of employees who might seem dubious.
In addition, employee dissatisfaction level at the front end contributes and creates high shrinkage conditions for retailers. Hence, retailers should timely review salaries or incentive structures and working hours for front-end staff
Retailers should maintain blacklisted data of defaulter employees, which they can circulate among all.