Loss prevention resolutions for the new financial year

As retailers complete their final stocktake and tick off the requirements that mark the end of the financial year, it’s a timely opportunity to look to the new business year ahead. And amidst a lengthy list of new year’s business resolutions, loss prevention should be high on the agenda.

Statistics from the Global Retail Theft Barometer indicate shrink will cost Australian retailers at least $2.7 billion in the next 12 months, with shoplifting accounting for over a third of that loss.

So as the retail industry looks to commence a fresh battle against one of their most significant foes, here are four resolutions every retailer should consider for loss prevention in the new financial year.

 A quick audit

The final stocktake of the year provides retailers with an overarching insight into the extent of their retail loss for 2016-17, indicating what strategies work and where improvements are required.

In an interview with Canstar, Australia Retailer’s Association executive director Russell Zimmerman noted three per cent was considered the industry average in terms of loss, but varied depending on the size of the retail outlet and the loss prevention strategy.

“Smaller retailers tend to have a closer contact with their customers, and provide more personalised service, so theft is lower in smaller retail stores – particular if the owner is working on the floor of the business.

“Larger retailers and department stores tend to put in security systems such as cameras, and security tags, both RFID as well as dye tags  (in clothing stores), to eliminate as much theft as possible.”

What the figures tell you

Final year figures not only tell you how much loss a retailer incurred in the financial year prior but exactly where that loss occurred, and there’s a lot to be learned from where and when items are stolen.

Inside Retail explains easy to conceal items with a high resale value are most often targeted. These include “mobile accessories, batteries, fashion accessories, and razor blades, as well as high-value items with high resale value, such as denim, handbags, iPhones/smartphones, perfumes and fragrances, and surprisingly, infant formula”.

“When sorted by retail vertical, the most stolen items included denim (apparel and fashion accessories); batteries (DIY home improvement); mobile device accessories (electronics); infant formula (food and beverage); and makeup products (health and beauty).”

If certain merchandise is more prone to theft than other items it may mean:

• Targeted stock needs to be better supervised.
• Alternate technology is required like specific tags for bottles, or higher quality, superior strength tags for clothing.
• Staff need additional loss prevention training.
• A second tier of loss prevention is required like RFID, ink tags, and camera surveillance.

A comprehensive strategy

While any loss prevention is better than no protection at all, the ultimate strategies involve a multi-tiered approach.

This includes layers of protection that deter, detect and identify thieves, so may incorporate electronic article surveillance with the additional feature of RFID or ink, staff training to have a watchful eye on the floor in a bid to prevent and recognise loss, and visible camera surveillance to deter and identify thieves.

If your outlet is operating with a single or outdated loss prevention plan, the beginning of the financial year is a timely opportunity to audit, upgrade and invest in additional or newer technology in the knowledge your loss figures may be greatly reduced by this time next year.

New technology

As with any technology, loss prevention is an evolving and improving area of expertise. What may have suited your retail outlet five or 10 years ago will likely have been superseded or significantly improved in the interim.

In clothing tags alone, locking mechanisms have greatly improved over the years to include stronger and almost impenetrable magnetic options like Superlock, Hyperlock and Multi-polar tags. The future of loss prevention will also see greater emphasis on RFID, and data collection.

In the meantime tech savvy thieves are constantly honing their ability to circumnavigate and thwart theft prevention technology, with the internet the perfect platform to source information and share shoplifting tips.

This means retailers should ensure their technology is up-to-date. If using only standard strength tags, the new financial year is an opportune time to upgrade to superior strength options like Superlock while looking to compatibility with further technology like RFID. Together these upgrades are imperative to protecting a shop front not just this financial year but well into the future.

The final word

The new financial year marks the ultimate time to revisit your loss prevention strategy. Not only will increased security provide very real financial benefits over the coming months, but come the end of the year, it may significantly improve the bottom line as well as proving a valuable and tax deductible asset for your business.