Retailers Eye Loss Prevention Expertise
Retailers Eye Loss Prevention ExpertiseBy Leah Gabriel Nurik
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Challenging economic times have retailers looking to tighten up operations to reduce costs. A recent study by analyst firm Retail Systems Research (RSR) found retailers are looking to invest in technologies that strengthen Loss Prevention (LP) strategies and improve profitability by reducing the loss of stolen goods and cash. Channel Insider takes a closer look at the survey results and what technologies VARs can add to help retailers meet their goals.
Sources of Shrink
The survey of 83 multi-national retailers, sponsored in part by ADT and Sensormatic Retail Solutions, found that retailers indentified their top three sources of shrink as employee theft of merchandise, shoplifting and employee theft of cash.
Tough Times Spurs More Theft
Over the past year, 44% of retailers experienced a rise in theft, most likely fueled by challenging economic times. Those retailers that ranked Loss Prevention (LP) high on their list of priorities performed better than those that did not, with their sales growth outpacing the 3% retail industry average.
Move it on Up
78% of top retail performers reported they moved LP up the priority list versus 48% of underperforming retailers.
Top Tech Solutions for LP
Successful LP strategies require implementation of critical technologies that span the gamut from RFID to BPO. Among the top technologies identified as advancing LP efforts, 63% of survey respondents cited better business intelligence to analyze all their data; 40% listed more accurate inventory tracking to identify the items being stolen; and 39% cited more creative uses of existing technologies.
LP Roadblocks
So, what roadblocks will a VAR encounter when selling LP-focused solutions to retailers? 86% of respondents said they are challenged for capital41% suffer from a lack of staff to review LP and audit data (compared to 29% in 2008)36% report existing inventory systems are “extremely” inaccurate and they are unable to quantify areas of loss.
Cash Vulnerable
One of the largest sources of loss is from within. The report shows employee theft of cash has increased from 32% to 45% of total losses. Most likely, the rise in employee theft is related to economic conditions, and retailers look for more advanced business intelligence solutions, rather than additional staff, to analyze data and results.
VAR Opportunities
Resellers like Dimension Data and Agilysis as well as a variety of resellers of POS systems are taking advantage of retail’s focus on loss prevention. VARs that can show retail expertise and offer advanced networking and infrastructure, inventory tracking, retail analytics and business process optimization stand to gain and continue to grow their retail practices in these challenging economic conditions.