Retail Loss Prevention: 7 Powerful Tools & Technologies to Help You Reduce Shrinkage
Loss prevention continues to be a major concern for retailers, and for good reason: losses due to employee theft, admin errors, and shoplifting cost you a lot of money. According to the NRF, the US retail economy lost $45.2 billion in 2015 due to shrinkage.
Clearly, retailers need to be more vigilant about loss prevention. To help you do that, we’ve put together a list of solutions for reducing shrink and improving store security.
From tools that you can install easily to technologies that require a bit of an investment, check out the items below and see if you can use them in your stores:
Installing security signs in your store is a low-cost way to deter shoplifters and shady characters. Anti-theft signs should be fitted close to the entrance and near your fitting rooms.
Here’s a tip. Walk into your store and ask yourself: If you were a shoplifter, where would you go? The answer to that should help you determine the best places to install your signs.
As for the content of your signage, you want to remind people that shoplifting isn’t tolerated and that there will be consequences. According to the San Diego Police Department, your anti-theft signs should “emphasize that you will prosecute” and that “the best way to discourage shoplifters and keep your business from being tagged as an easy mark is to take a get-tough attitude and prosecute on the first offense.”
If you’re willing to invest a bit more in store security, consider installing surveillance cameras in your stores. Doing so will allow you to monitor store activities 24-7, and it’ll give you recordings that you can revisit if necessary.
Depending on your store and the security system you already have in place, you may be able to integrate your cameras with your POS, foot traffic solutions, and other loss prevention programs.
Consider what American Apparel did. The clothing retailer combined its foot traffic management and loss prevention tools in one system. The company used RetailNext’s searchable video solution to track how people moved around in their stores and combined that with foot traffic insights.
According to RetailNext, “American Apparel was able to interpret streams of digital video and recognize human beings moving through the stores, opening up broad capabilities for measuring shopper behavior inside its environment. This capability enabled American Apparel to measure not only the number of store visitors but also shoppers’ movements within the store — where they walked, where they stopped and how all these behaviors tied to actual sales at the register.”
Using those insights, the retailer was able to beef up its loss prevention efforts and ended up reducing theft by 16%.
Not too sure about using cameras in-store? Consider mirrors instead, which can serve as inexpensive yet effective tools for spotting shoplifting and other suspicious activities.
Do a quick walk-through of your store to see if there are any blind spots. If you spot some, then you may want to may want to install security mirrors to monitor those areas. Typical blind spots include corners that aren’t too visible from the cashier’s side, as well as areas which are blocked by fixtures or shelves.
And the good news is, it’s quite easy to purchase these mirrors. You’ll find a lot of them online or in the nearest office supplies stores, with price ranging from around $30 to $300.
4. POS system
Most modern point-of-sale systems allow you to set user permissions to enable or restrict certain tasks from being carried out. That’s why if you haven’t done so yet, check with your POS solution provider and see how you can update user permissions in your store.
Jordan Lewis, the inventory product manager at Vend, says that these permissions go a long way in preventing shrink.
According to him, it’s best if retailers set user roles based on the individual instead of the job title.
“I see a lot of companies applying the same user permissions for all managers or for all admins. But what merchants should do instead is assign permissions based on the tasks you want each employee to perform and restrict them from doing tasks outside their job description.”
He adds that retailers should be especially vigilant with voided sales and who can perform them, as this is a very easy way to steal stock.
5. Inventory management tools
Staying on top of your inventory is critical to loss prevention. Poor stock control leads to more misplaced products and unchecked discrepancies, which is why it’s important to arm yourself with a robust inventory management system that’ll make it easy for you to track merchandise.
One thing to look for when choosing inventory management tools is the capability to conduct full and partial stock counts.
Are you a Vend user? Be sure to utilize Vend’s inventory counting features when implementing cycle counting at your store.
“Counting your stock more often allows you to notice discrepancies earlier and keeps your financial records up-to-date,” says Jordan. “Aim to conduct smaller counts regularly with the goal of covering all your inventory through multiple counts.”
Jordan furthers that retailers should “count proactively, not reactively.”
This will give you the best chance of correcting any discrepancies sooner rather than later. If you wait until you have to do a full inventory count, you’ll fail to catch issues early, and the damage would’ve already been done.
Once you’re done counting, you need to actually do something with the information, says Jordan. “Use inventory reports to identify high-risk signs or regions in your store, and make sure your staff understands where these areas are, and how to minimize stock loss.”
“It’s also beneficial to compare multiple completed inventory count reports with the aim of seeing patterns and discovering root causes of the discrepancies,” he adds.
If you want to learn more about using POS permissions and inventory management to reduce shrink, check out our previous webinar, How to Set Up Winning Inventory System for Your Retail Store.
6. Inventory counters
Speaking of inventory counts, you’ll want to have a reliable tool for conducting stock-takes. Avoid using a pen and paper when counting inventory. Arm yourself and your staff with a solution that enables you to count your products efficiently and accurately.
A perfect example? Scanner by Vend — a nifty mobile app that lets you conduct physical inventory counts using your iPhone, iPad or iPod Touch.
Just scan an item’s barcode using your phone’s camera and Scanner will automatically record the SKU for you. Scanner also syncs completed counts with your Vend account, so once you’re done counting, you can easily update your stock levels.
Not a Vend user? Scanner will create a CSV file that you can email to yourself or your staff.
RFID (Radio Frequency Identification) comes in the form of chips embedded in product tags or packages. These chips contain product information and enable retailers to track items using their stock control system, so merchants can gain real-time inventory visibility and accuracy.
When used correctly, RFID technology can help you prevent losses in various stages of the supply chain as well as combat theft and misplaced products in-store.
Retailers that affix these tags right after manufacturing can track products as they move from one stage of the supply chain to the next. This allows them to prevent losses during the distribution process.
When implemented in-store, RFID enables merchants to locate items and ensure that products are in the right place at the right time. The technology can also help retailers catch shoplifters. If someone attempts to walk out of the shop with RFID tags still attached to the merchandise, your store’s security sensors could go off and alert your staff.
Additionally, RFID makes counting much easier. Rather than handling items one by one, inventory counts with RFID can be done with a handheld reader while items are still in their boxes or shelves. Associates would simply have to walk to the display with their reader, and the software will display the necessary product information.
Need more practical tips on loss prevention? Check out our article on reducing shrink and beefing up security in your store.
While the solutions above can definitely help in increasing store security and reducing shrink, don’t forget that the success of your anti-shrink initiatives lies not just in these tools, but in how you use them.
Before you jump into these tools or technologies, be sure to assess your needs and create a plan that you can implement.
What other shrink-prevention solutions are you using in your business? Tell us in the comments.