Surveillance is only as good as the monitoring of it, usually a limited number of people. It becomes descriptive (after the fact) more than a deterrent or prevention.

AI will help solve a lot of this problem, especially around cashierless checkout, and areas of the store that are considered “hot spots” assuming you have advanced video analytic capabilities.

But training store associates with more knowledge won’t solve this. If criminals are brazen enough not to worry about jail time, a store associate poses minimal deterrent … plus putting store associates in harm’s way without any way of preventing this behavior is senseless.

Unfortunately retail shrink and employee-led schemes are going to continue to be one of the main loss areas for retail companies. Technology, especially AI can help identify, predict, and help prevent employee theft, yet the problem has to be mitigated during the hiring and training processes.

Employees with bad intentions will steal without fear of consequences regardless of any advanced preventative technologies. While shrink could never truly be eliminated, establishing the right culture of trust, transparency, and accountability will help to mitigate shrink. The preventative measures are only as good as the execution and dedication to this initiative.

As of June 2020, the United States had the highest number of incarcerated individuals worldwide, with more than 2.12 million people in prison. So, I would need more time to reconcile that fact with the first two bullets. The last bullet, “Opioid addiction, mental health challenges and economic conditions”, should have been the first, they are the root causes; the rest are criminal tactics. However, I think that retailers should focus on increased surveillance deterrents, flexible payment options, truly making associates partners and not just employees, and community outreach.

Technology is a two edged sword. When you implement self-checkout you obviously open yourself up to a higher shrink risk. One real solution lies in the promise of advanced Business Intelligence (BI) that not only tells you what happened (descriptive BI), why it happened (diagnostic BI), what will happen (predictive BI) but what we should do about it (prescriptive BI). Prescriptive BI leverages task management with closed loop notification and escalation capability that insures follow up on an analytic insight. This technology holds the most promise to reduce shrink.

Employees are still your number one guard against shrink and cause for it. People who are de-motivated, untrained, and allowed to stay find ways to help themselves. Has been the truth since the Wanamaker stores.

Shrink and its relationship to employees has always been and will continue to be a difficult balance for retailers. I agree that employees are the number one guard, whether it be on the sales floor, analyzing return patterns or overseeing the alerts and anomalies identified by AI. However, they have always been a leading contributor to shrink through collusion and internal theft. Unfortunately, this problem is going to continue to rise as the gig employment mentality continues to grow and long-term loyalty to a retail employer is very limited to non-existent at the lower levels. Some of the most successful tech has been used in pre-employment screening, onboarding and iterative training. The use of technology continues to give the advantage to the retailer. However, as it was pointed out technology is only as good as those managing and monitoring it. Managing is very important as like most things it needs care and feeding. A static and predictable security system will generally be worked around by especially by organized crime.

Does having a fancy car enable it to be stolen more often? No, it’s bad actors who commit the crime. We can swap that with being a woman, having a dog, or owning a gun (to be controversial). The tech doesn’t cause the act, but there may be higher likelihood that crimes are committed when it’s easier to do it. Organized crime has become far more sophisticated, and targeting of the easiest homes in a neighborhood has been commonplace among burglars for centuries. Tech is not a cause. Solutions, however, start with watching for crime, and the best options are just having good training and awareness of what shoplifting is, how they engage, and what to do about it. It’s old school, but it’s basic training for retail associates — that’s too often overlooked. Discouraging employee theft is also important, given the amount of shrink that comes from this avenue. This can take a variety of forms, from camera tech to stronger store management. We’ll see more problems with shrink, but I expect to see… Read more »

Surprise, surprise. Record unemployment = more theft, both internal and external. Bottom line, minimize the opportunity and implement effective deterrents, both technological and process-driven.