Retailers fight an uphill battle as shrinkage continues to grow which is why overt security is the preferred tool to prevent theft.
November 16, 2021
Marketing Content Manager
When you’re walking past the security alarms and personnel at a supermarket, have you ever broken into a little bit of a sweat and wonder, “What if I stole something?” While this thought is completely nonsensical since you paid for each of your items, you still wonder if you will set off the alarm. I know I have done it. What is even worse is when a security device is still attached to one of your items and you actually set off the alarm.
While I have always known that the security alarms, loss prevention employees, and the cameras are in stores for a reason, I never imagined just how big a problem retail theft/shrinkage really is. It’s a $61.7 billion sized problem. Yes, billion. With a B. To put that in perspective, the 2020 median annual income in the United States was $41,535. At that wage, it would take one person more than 1,485 years to make that much money.
What’s even more surprising about $61.7 billion is that it doesn’t include the cost of any loss prevention or security efforts. In 2007, Security Magazine reported loss prevention efforts cost retailers in the United States 29.3% of that year’s total shrink. If the percentage stayed consistent, then it would cost retailers more than $18 billion today to fight against theft, fraud, and loss. Combined with the $61.7 billion, retail shrink is actually around an $80 billion problem.
Another side of retail shrink affects the customers much more directly—i.e. with increased costs. The more theft and fraud that happens in their stores, the more retailers have to raise their prices for paying customers. If they don’t, they won’t stay in business. However, if retailers are forced to charge too much, customers will take their business elsewhere.
Furthermore, the actual cost of retail shrink gets higher as we step away from the monetary side of shrink. Retailers can assign an exact dollar value on products as well as on physical damages and prevention efforts. But who can assign a dollar amount to safety? To the value of a life? That is impossible, but it is the most important factor in any loss prevention endeavors.
Employee training has shifted in recent years to focus less on apprehension. That’s because violence associated with theft is rising and no amount of loss is worth an employee, customer, or innocent bystander getting hurt. In fact, violent retail incidents reached an all-time high in 2020, which was 40% higher than five year earlier. It is simply not worth the risk. Instead, the burden of apprehension falls more on better trained and equipped law enforcement.
This is why retail security is shifting to proactive methods. It is better to stop the thieves from entering the store than it is to confront, apprehend, and prosecute them after the fact. It saves money and prevents losses. Most importantly, it helps protect employees and customers.
The point of proactive, overt security is to make the effort of stealing too high for thieves. It can include everything from posted warnings and attached security devices to blatant security officers. One proactive method is to update retail security systems both inside and outside of the store. Traditionally, security is hidden, almost invisible. This includes camera systems, undercover guards, and more. The logic is that a hidden camera or guard will catch things that an overt one won’t. However, that isn’t necessarily true. Overt cameras and guards can catch the same things as hidden ones, but typically it is perceived as less because they help prevent incidents from happening.
For example, retail store security cameras from LiveView Technologies (LVT) are stationed in the parking lots and are extremely overt. They have flashing lights and everything. Well, the 1,800-pound trailer might have something to do with it as well. One national retailer stationed LVT Units on their properties and saw a reduction of parking lot incidents of 40–70%. While that is impressive, I am sure you are thinking, “Yes, but that is outside the store, not inside.” You’re right. However, another national retailer saw a 69% reduction in grab and go theft after they deployed LVT Units in their parking lots. This included theft inside and outside their stores. This retailer stated that the overt security helped keep bad actors out of the store.
These are just two use cases that prove that overt security is more effective than traditional, covert operations. Both retailers had typical security systems and protocols in place before they partnered with LVT and deployed overt camera systems.
As inflation increases and the cost of goods skyrockets, retail security will become even more important. Thieves aren’t going to stop, and they are always developing new methods. Retailers need to be proactive in their security to stay ahead of the shrinkage. Watch how LVT helps prevent crime in this video.