Results of a new survey by the Retail Industry Leaders Association (RILA) show that criminal activity at retail continues to grow.
According to the 2010 Current Crime Trends Survey, 78 percent of retailers report an increase in amateur and organized retail crime. Nearly three-quarters cite an increase in stolen goods being sold in online marketplaces.
"We have seen a steady increase in retail crimes over the last year as criminals continue to take advantage of the economic climate to expand their activity," said Casey Chroust, executive vice president, retail operations for RILA, in a press release. "Not only are retailers presented with additional challenges due to these increases in crime, but communities and consumers lose when the proceeds from these crimes are used to fund additional criminal activity."
Derek Rodner, VP, product strategy at the retail loss prevention firm Agilence, Inc., told RetailWire, "The economic downturn in 2009 created a perfect storm for retail theft. Retailers significantly scaled back expenditures and capital projects in all areas, most significantly loss prevention. In addition, many retailers cut their LP staff up to 50 percent. At the same time, more people were losing jobs and otherwise honest folks were forced to resort to theft just to get by. These two factors combined to cause a dramatic increase in shrink. Retailers are now redoubling their efforts to combat this trend and are being forced into updating their legacy technologies and procedures to adapt to the changing dynamics."
Roughly one-third of retailers in the RILA study report that loss prevention/security staffing models have changed due to economic circumstances at retail.
Gus Downing, chief executive officer at Downing & Downing, told RetailWire, "Since June of 2008, the nation's retailers have eliminated over 43 senior loss prevention executive positions due to the economy. Now some were the retailers who went out of business, but the vast majority are companies that have been hit hard by decreased sales and have been forced to reduce payrolls with the senior executive dollars being the easiest to recoup the quickest."
In addition to executive and management-level cuts, Mr. Downing said, "At the store, payroll levels have been reduced obviously and in my opinion a conservative number for LP would be around 15 percent to 20 percent generically."
A reduction in loss prevention staff is not the only issue in terms of crime levels, Mr. Downing added. "The real problem has been the actual reduction of sales staff in the store. We have literally tens of thousands of stores in the U.S. opening each day with only one staff member on duty. Here lies the real opportunity for ORC thieves and I assure you this is where they go."
In an effort to deter crime in the face of lower staffing levels, the RILA report shows retailers have turned to a number of prevention methods including:
- Radio frequency (RF) electronic article surveillance (EAS)
- Increased use of exception based reporting and video analytics
- Electronic hiring and more diligent background checks
- Improved store level reporting
- Hiring of off-duty law enforcement to cover front doors during busiest hours
- Increased use of video surveillance systems
- Increased use of anti-theft devices like spyder wraps and keepers
- Store Management spending more time on the floor
- Offering store level associates incentives related to shrink reduction
- Detailed training of store management at the district level and of staff in key positions within the store.
Discussion Questions: What is your assessment of the crime picture at retail and what do you see as some of the best responses, in light of staffing levels, to reduce losses?