In 2009, the Indian retail industry topped the barometer of ‘Global Retail Theft’ making shoplifting and employee theft as biggest causes of retail shrinkage.
In 2010, more than Rs 9,295.9 crore were lost to shoplifting and theft by Indian retail sector.
And according to National Retail Federation of US 2016 report, United States went into $45.2 billion loss with shoplifting as the biggest contributor. There have been many instances where simple transgressions like shoplifting have resulted in billion dollars of loss for retail stores.
In 2014, the amount of shoplifting a book from Barnes and Nobles, an international bookstore company amounted to $32 billion dollar problem, causing 70% ‘inventory’ shrinkage in US.
“A common misperception about shoplifting is that retailers can ‘afford’ the loss of a candy bar or a pair of jeans. But the truth is that the industry loses billions of dollars,” NRF CEO, Matthew Shay, was quoted as saying.
World Book Fair that happens every year in Delhi hosts 2500 stalls that also cannot prevent loss from theft. In 2016, Penguin India had more than 25 cases of shoplifting everyday at the fair resulting in a loss of Rs 5 lakh.
“Every day there are more than 25 cases when we have caught people for shoplifting. We have our limited staff and looking after every visitor is not possible. Last year we had to face a loss of Rs 5 lakhs,” an official from Penguin was quoted by news agency IANS as saying.
Retailers have been facing such problems from the times of Shakespeare, where stealing clothes accounted for 27 per cent of theft during 18th century London.
Theft in retail is not just limited to Brick and Mortar stores. Just recently in January 2017, three Indian university students were arrested when they hacked into the payment gateways of e-commerce sites such as Amazon, Flipkart etc that resulted in financial loss of Rs 92 lakh.
Who might be stealing from you and how?
Generally, the school punks will make the headlines for stealing candies from a shop. Or an employee who has been underpaid and overworked eats a bag of chips or sandwich without paying. The 2015 National Retail Federation of US reports three main reasons for retail loss, known as shrinkage- Customers (38 per cent retail loss by shoplifting), the employees ( 35 per cent of retail loss by employee theft), and lastly, your suppliers, contractors, management, and administration( 27 per cent of retail theft).
What are their targets?
Internally, 90 per cent of the employee theft includes cash, not goods. Hence, employees can tamper with cash handling or show wrong sales data and hide revenue leakage that can cost huge cash loss.
Externally apart from shoplifting, the insecure wifi connection in-store can be targeted to steal your customer credentials (loyalty or payment information).
The Case of Shoplifting: Can you recognise the signs of a shoplifter?
They avoid eye contact. You may find them looking at the staff than the products. Either enters in a large group or wears bulky clothes. If they go in and out of store many times without buying anything, then they may be upto something.
Now, you may not have a big loss prevention budget, then there are many low-cost, non tech ways to prevent shoplifting.
Shoo away the shoplifters with a Signage!
The simplest way to beware shoplifters is to have an ‘anti-shoplifting’ signage in the shop. They ward off shoplifters 24/7 and almost cost nothing. Here are some tips to make a better signage.
The message should be conveyed in such a manner that where they scare the thieves, they don’t intimidate the legitimate buyers. Place the sign at or near the front of the door. Having the sign of ‘an eye’ on the signage will increase the compliance.
Make store design shoplifter- unfriendly!
First and foremost, your store should be clean and tidy. The shelves should be organised and the merchandise should be kept ‘faced’, i.e pulling your products to the edge and make a wall of them, so that it becomes easy to tell when someone has swept the products.
Checkouts should be placed such that the customers pass it before exiting. Another way of keeping clear sight is by putting convex mirrors at the suspicious areas in the store. To avoid blind spots, have proper lighting.
Train your staff for in-your face customer-service!
Now, we wonder why the staff at the entrance of every shopping store in a mall greet us by maintaining a good eye contact. Giving a good customer service by engaging your customers will help in bewaring them from doing anything wrong, profiling any suspected shoplifter and also, wooing your customers by your assistance.
Now, not all store thefts can be tackled by above mentioned tips. Following are more medium/high cost budgeted prevention methods that retailers use from time to time-
Get a counter-checking POS system!
When Dee Sidani, owner of a retail store in UK found he couldn’t trust his employees, he took counter-protective steps. As part of his digital strategy, he set up a money counting robot that counts all money and print out all receipts. Similarly, another retailer has adopted an EPOS system that is linked with his back office. The employees know that every item scanned is being watched in real time.
The challenge is most of the retailers are depended on their staff. There isn’t a process or any automation. How do you know how many sales happened or how many customers walked in? How do you counter-check the inventory and sales data your employees provide?
Now, even if you do find a complete POS system, unless secured, it becomes a clear target for hackers and data thieves. A report by SC Magazine bewares of POS malware AbaddonPOS that is aimed specifically at retailers. It takes the form of an email campaign designed to drop Tiny Loader and then the malware. The emails are highly personalized, with recipients’ names, key company details and better-than-average grammar.
A mobile POS system will attract payment system hacks. To address such risks, you want device management tools that allow granular customization or data separation.
Ask them to smile on a surveillance Camera/CCTV!
According to a survey, video surveillance system has been the largest product category of Indian electronic security product market over the year 2010-2015.
Security cameras not only help you prevent shoplifting but also, keep an eye on your employees. Now, with a simple CCTV camera, you can ward off the impulsive shoplifters. However, for an amatuer and professionals, you may need more than that because they know you won’t be keeping tab on the video 24 hours a day. Here’s how the industry leaders in video surveillance are doing-
Securens Systems created a reliable and affordable security system. With Securens, you can integrate the online alarm system with on-site closed-circuit television cameras and a two way audio system to deter crime on a real time basis. The moment sensor is tripped and becomes active, an alert is sent online to the monitoring site of the company.
After the video verification conducted by company, the siren is switched off if the threat is not real. But in case of a crime, an audio system is used to dissuade the criminals and police is sent an alert.
Another big name in e-surveillance is Tyco that dabbles in IP cameras. Unlike analogue closed circuit television(CCTV), IP cameras are employed for surveillance and can send and receive data via internet and computer. Tyco recently introduced two of their new IP cameras – a 2MP PTZ and 12MP Fisheye camera. The cameras are so advanced that they can create transitions in pan, tilt and zoom movements. It provides high quality video up to 15 meters in the worst lighting conditions.
“We are always cognizant of our customers’ need for excellent video quality while keeping a careful eye on cost,” said Linda Natale, Product Manager, Tyco Security Products.
Beep beep… RFID tags!
According to Auburn University’s 2016 State of RFID adoption among U.S apparel retailers, 96 per cent of retailers had plan to deploy the tags on their apparel products. Since 2014, 3 billion to 4 billion apparel RFIDs had been sold.
RFIDs are expensive technology but serve multiple purposes. They work as a non-contact automatic identification technology that uses radio signals to track, detect, sort variety of objects. You may have walked into a store, picked up a bag that has a bar code attached to it. It’s this bar that set off the alarm when anyone walks out of the store without paying for the product.
RFID technology has three elements-i) a tag or a transponder that carries object-identifying data, ii) a tag reader or receiver that reads and writes tag data and lastly, iii) a backend database that stores all the data associated with tag contents.
You can keep track of your products with RFIDS- Inventory management and replenishment
Do you seem to lose your products inside the store? RFIDs help in locating and tracking in-store inventory. You can even track how the items move in the store. Hence, when a customer picks up a product from the shelf, or takes a pair of jeans to trial room, store associates can keep track of them.
Big international stores like Target and Walmart are using RFID technology for inventory management.
Bringing Omnichannel to your store
INFINIA Retail has researched that a lot of retailers are increasingly supporting Omnichannel and have adopted online orders through website or apps. However, the challenge retailers were facing with online orders was when their customers came to the store after discovering a product online, they were not able to locate it in their in-store inventory quickly. Or the customers placed orders online only to find the store hadn’t stock the item resulting in a cancellation. With RFID technology, this situation can be avoided.
Even the brilliance of Amazon Go store lies in RFID technology. Not only it eliminates cashier, it also avoid any theft as it tracks the item in real time even if the customer is walking past the door.
The Case of Digital Frauds
In the world of digital retail, an Omnichannel shopper spends between 50-300 per cent more than a single channel shopper. According to GSMA data, 66 per cent of customers are happy to give their data in exchange of services and products, provided retailers don’t take advantage of the data.
Such discoveries have made retailers innovate customer shopping in-store experience by bringing more Omnichannel and digital technologies. Technologies such as self-checkout services, multiple payment options, mobile point of sale are becoming part of in-store shopping experiences. However, how protected are they?
One thing common in Target, Ebay, Adobe etc was that they all have been victims of security breaches. Ebay’s 145 billion records have been comprised and Target have had 70 million breaches. It is reported retail is the fifth targeted industry for data breach.
The negligence that causes data breaches are accessing malware-laden websites and downloads, weak passwords, insecure system configuration, legacy softwares and poor network security.
Hack in payment systems
In 2016, an international women apparel brand Verra Bradely reported to have their brick and mortar store’s payment system hacked. According to a survey done by Accenture, 57 per cent of the shoppers are concerned their personal information may be stolen while doing a transaction.
In 2014, nearly 18 million American have suffered from identity theft. Protecting customer data and privacy as well as having contextual security in form of ‘safe system’ against cyber attacks are the responsibility of store owners.
Provide secure in-store Wifi
“It is easy to hack store’s and customer data when the wifi is not well protected through a network security system or firewall. Also, it’s important to separate your customer’s wifi from employees to protect your network from virus, spyware, intrusion and thefts”, Scott Grebe, Dell Security.
Self-checkout services increasing thefts?
A recent study by University of Leicester’s reported that self-service checkouts increased the risk of shoplifting. It led to the discovery that retailers who utilized self-service checkouts experienced 4% more loss than industry average. However, supermarkets such as Target still prioritise self-checkouts because it enables them to concentrate on providing better customer service.
One of the way to tackle the situation is by providing ‘Public View Monitors’ perched above self-service checkouts, as advised by Dr. Hayes, director of the Loss Prevention Research Council. The shoppers can be watched on the screen and warned.
It’s a perception problem!
A research done by Retail Dive says that companies are overconfident in their ability to detect data breaches. A perception problem prevails where retailers are not fully equipped to provide in-store security.
In the era of digital retail, in-store security has become a necessity. At the same time, Omnichannel and digital revolution in retail is inevitable. Make your store shine and a shoplifter signage bright!
How often in-store thefts happen in Pacific malls?
Abhishek Bansal: The In-store thefts in stores vary category and store size wise ranging from 0.25% in Anchor Fashion Stores to 0.3% -0-8% in Hypermarket / Convenience stores and In Line Stores, of the total sale for the month.
How are malls equipping themselves against in store thefts?
Abhishek Bansal: Although, in-store thefts are a prime area of concern in the retail segment but, malls nowadays are equipping themselves with the latest technologies which help them track any sort of thefts/pilferage that occur. However, there’s no way to completely protect yourself against shoplifting and employee theft, but if you make customers and employees aware that you’re keeping a close eye on your business, that’s the first and most-critical step in protecting the thefts/pilferage.
What steps are taken to handle shoplifters?
Abhishek Bansal: As per the Mall Standard Operating Process pertaining to Shop Lifting and handling of Shoplifters we usually take few steps:
- Should the person refuse to pay for the product or are claim inability to pay for the pilfered merchandise, the store manager is advised to lodge a complaint with the local police station.
- The local police station is contacted and a request is made for a police officer / constable to be sent to the premises.
- The shoplifter is then handed over to the police and a complaint is lodged by the store manager.
- In case of the store manager’s unwillingness to lodge a complaint, then the shoplifter is counselled not to visit the property again and any identity proof of the shoplifter is taken for our records.
- Besides this the stores in the mall are advised to ensure the proper functioning of the following equipment In store CCTV’s Special focus on CCTV at the Cashier location Anti-Shoplifting devices
Besides this the store also carry out daily inventory of high value items such as watches, perfumes, jewelleries, etc and monthly / quarterly inventory for items like apparels, FMCG, etc
Do you educate staff members of stores on how to detect shoplifters?
Abhishek Bansal: Since we are a mall and by the definition a collection of stores under one roof, we do counsel and work with our retail partners on imparting training to their staff on how to detect potential shoplifters and the do’s and don’ts to be followed.
The store employees are advised to watch for customers who avoid eye contact, appear nervous, wander the store without buying, leave the store and returns repeatedly. In addition to training the store employees to spot shoplifters, general shoplifting-prevention techniques include staying alert at all times, greeting all customers, asking lingering customers if they need help. When shoplifting is suspected, the store employees are advised how to handle incidents. Pacific Mall recommends the store employees to never directly accuse anyone of stealing (call security instead), give the person a chance to pay for the item they “forgot” to pay for by asking, “Are you ready to pay for that?” never try to physically stop a shoplifter. Inform the Mall security.