“Shrink” is something that most in the retail industry have come to accept.
Preventing 100% of theft, fraud, and other crimes is a daunting task, and although retailers do the best they can to limit their losses, the numbers remain upsetting to look at. According to a recent National Retail Federation (NRF) report, inventory shrink cost the retail industry an estimated $46.8 billion in 2018, robbing retailers of an average of 1.33% of sales.
Nearly 41% of retailers surveyed in the report indicated an increase in inventory shrink during that year, indicating that the problem continues to grow. These numbers highlight the fact that even as online shopping plays a growing role in global commerce, brick and mortal locations remain extremely important—and securing those locations must be a priority.
On a per-incident basis, the numbers are staggering: an average incident of return fraud costs $1,766, and a typical shoplifting incident costs $559—double what it was in 2017. In fact, the report indicates that a single dishonest employee costs a retailer an average of $1,203, highlighting the need for better security to police both internal and external crime.
Fortunately for retailers, the security technology available to businesses continues to grow more advanced, and today’s integrated approach to security can help retailers protect themselves more effectively than ever.
With integration comes opportunity
There’s a well-known saying in both retail and real estate: location, location, location. Well, those in the security industry have a similar mantra: open platform, open platform, open platform. The reason for this is ease of integration, and utilizing an open platform approach makes it significantly easier to add functionality. In the security industry—and many other industries—single-function devices are becoming obsolete. After all, if you’re spending money on a solution, you don’t want it to perform just one function.
Devices today are increasingly interconnected, and that network capability opens up a wide range of new possibilities for devices, rendering those that can only accomplish a single task laughably inefficient. Think of it this way—not so long ago, you probably had a single-function device that you kept in your pocket: your cell phone. But today, you would never buy a cell phone that functioned solely as a phone. We expect more from our communications technology now, just as we do from our security devices.
This need for multi-function devices is what makes the ease of integration enabled by open platforms so essential. Technology is evolving at a blistering pace, and it is unlikely that any single provider can provide every solution that retailers are likely to need today—let alone in five or 10 years. Turning to a proprietary platform rather than an open platform essentially consigns your security system to planned obsolescence, with no recourse in the event that your provider stops supporting a piece of software essential to your security setup.
It is also important to recognize that as retailers grow and their needs change, the ability to integrate new technology that can plug these new gaps is critical. By using an open provider, you ensure that you will always have options to choose from, even if your core provider does not support the functionality you need.
Your platform must evolve with your business
Loss prevention is often the main driver when it comes to security technology, and nobody owns more devices in a retail environment than the loss prevention department. From cameras and sensors to alarm panels and point-of-sale devices, there are plenty of opportunities for integration.
And while the concern on the surface is often shrink, these devices can also provide added value to asset protection and sales and operations, identifying bottlenecks, inefficiencies, and other impediments.
Far from simple security tools, cameras and other devices can be equipped with people-counting technology, heat mapping software, and other business tools—all thanks to an integrated, open-network approach.
As we look even further ahead, it’s important to consider that we don’t know what we don’t know. New security technology will be developed, and, unfortunately, thieves and fraudsters will also develop new ways to perpetrate their crimes. As retailers prepare for these unknowns, the ability to integrate additional security frameworks to accommodate these new realities will only become more valuable.
When implementing technology, retailers and security companies alike cannot afford to stay in their own silos. The ability to integrate technology across all business units, providing everyone the opportunity to leverage and benefit from new economies of scale, will be essential far into the future.
Hedgie Bartol is business development manager for retail solutions at Axis Communications
Written by admin
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