Shoplifting cost the U.S. retail industry a hefty $46.8 billion in 2017*. While 30% of inventory loss comes from administrative and vendor fraud, nearly 70% is the result of theft from both customers and employees.
While it’s impossible to prevent all inventory loss, the retail and security industries have identified some patterns that could help retailers better identify potential shoplifters. For example, according to a recent study, 60% of known shoplifters were detected entering at least two separate locations of the same retail chain, and 20% entered three or more locations of the same chain. Shoplifters plot their visits during peak hours, when stores are crowded and employees are exceptionally busy. And dressing rooms are one of the top areas where shoplifters go to hide merchandise in bags or under clothing. How can retailers gather the right data and analysis, and use this information to deter shoplifters?
Retail chains are concerned about more than inventory loss. Their success depends on excellent customer service, effective merchandising, and maximizing online and offline sales opportunities.
Arcules integrates video with artificial intelligence and machine learning to deliver ongoing analytics to improve business operations. Here are a few ways Arcules enables retail management to gather insights and turn those into actions that improve customer satisfaction and increase revenue:
- Reduce long lines at checkout: Customized alerts can be triggered when check out lines become too long, enabling additional staff to attend to customers.
- Improve merchandising: Heat maps may indicate which aisles and displays are attracting crowds of people; does this correlate with actual merchandise sales? Is there an opportunity to use these insights to design promotions (mail, digital, in store) to customers with specific product offers?
- Efficiently plan staffing: Analyze not only the days of the week, but also times of the day when there are spikes in customer traffic in your stores. Efficiently organize staff to accommodate customer service during those days and times.
- Increase store traffic during slow periods: People counting and traffic patterns across days of week and times of day enables retailers to plan additional promotions to encourage traffic during those slower periods.
- Compare analytics across store locations: Improve merchandising, promotions and inventory management across store locations by analyzing traffic patterns, dwell times, and other integrated analytics enabled by the Arcules service.
A respondent in the 2018 NRF’s National Retail Security Survey stated, “…We need more bang for the buck and security alone is one-dimensional. Time to move on from the past.”
*National Retail Federation 2018 National Retail Security Survey.
Retail stores have implemented a number of solutions in an attempt to reduce inventory loss, including additional cameras, Radio Frequency Identification (RFID), and requiring employees to actively (and often repeatedly) greet and interact with shoppers. While these solutions provide some risk prevention, they may be limited in overall effectiveness.
For example, RFID can be difficult to read on metal or in liquid products, easy to hack, and subject to interference. They are good for inventory control, but not necessarily for theft prevention. What’s more, employers often rely on their staff to stop customers when RFID tags go off as shoplifters exit the store. Often, employees,are too busy helping other customers, or lack confidence stopping suspected shoplifters when alarms go off.
Consumers are becoming more aware – and leery — of invasive technologies and techniques, including RFID tags even after they purchase an item and leave the store. And most everyone can empathize with people who just want to browse and shop, without the interruption of well-meaning employees following customers around asking how they may assist.