Advances in security technology are giving retailers ample choice when it comes to protecting merchandise. Melinda Oliver sizes up the problem of theft and explores what can be done.
Nimble fingers
Blame the global financial crisis, the difficulty of achieving a luxury lifestyle, or simply greed. Whatever the cause, shop theft is a persistent and growing issue for retailers.
The 2009 Global Retail Theft Barometer found the cost of retail theft reached US$114.8 billion worldwide for the period between July 2008 and June 2009.
Conducted by the UK-based Centre for Retail Research, the study monitored the cost of shrinkage and crime in the global retail industry and found that a rise in shrinkage occurred in all regions surveyed. The greatest increases were in North America, which was up 8.1 per cent on the previous year, the Middle East/Africa which was up 7.5 per cent and in Europe which grew 4.7 per cent.
Director of the study, Professor Joshua Bamfield, said that in addition to the global recession, reduced spending by retailers on loss prevention contributed to the leap, which was the largest increase since the study began in 2001. The research revealed that the most vulnerable merchandise was small, easily concealed and expensive branded items that are easy to re-sell.
In Australia, theft remains an issue for retailers and crime authorities. In New South Wales, in the period from April 2009 to March 2010, there were 20,661 recorded incidents of crime from a retail store, slightly up on the figure of 20,369 for the prior corresponding period. In March 2010, 1845 such incidents occurred.
In Victoria, police statistics show similarly significant numbers, with shopsteal offences for the 2008/09 financial year at 19,455 – a figure 22.8 per cent higher than the previous year’s of 15,840.
The police partially credited this increase to the introduction of new penalty infringement notices and offender warnings, specifically for the offence of ‘Shop theft less than $600’ on July 1, 2008. During the year, 3089 of the new infringement notices were issued.
The Australian Centre for Retail Studies research analyst Lisa Tartaglia says cutting down staff to balance profits during challenging sales is contributing to theft. She also suggests the growing online selling sphere for goods which are unused, but have a popular brand name, is a factor in the rise.
Beyond Big Brother
Rather than relying on classic CCTV or electronic tagging systems as a method to catch a thief after they take action, new customer tracking devices can alert store owners to a potential problem before it strikes.
ADT Security Australia national retail manager Phil Brown says the next step forward is to integrate existing surveillance systems, in order to provide people counting abilities and an understanding of how consumers move about on the shop floor.
“Capable of capturing visitor trend data such as traffic numbers, pedestrian direction, average time of stay and even demography, new analytics software can allow retailers to quickly spot trends, patterns and abnormalities so they can identify security issues and allocate staffing resources accordingly,” he says.
Brown says electronic article surveillance (EAS), in the form of anti-theft tags pinned onto garments, remain the most popular security choice. A new advance in this field released by ADT Security is a pinless system, which means garments do not need a hole made to attach the device. Down the track, developments in radio frequency identification (RFID) are expected to be popular.
“Using RFID technology, retailers can accurately track goods coming from factories, through distribution centres and all the way into their stores. Once on store shelves, goods can be tracked while in stock, through the point-of-sale and out the store exit,” he says.
Retailers rolling out new stores should address security issues at the point of initial development, he advises.
“With the trend towards open-plan, minimalist design, many want to install a concealed EAS system, where sensors are hidden under the floors or inside the walls,” he says. “It’s a highly attractive solution as it does away with obtrusive pedestals at a store’s entrance, however the system can’t always be completely concealed if the shop fit-out has already been completed.”
On a simpler level, Brown says retailers can take some easy steps to help prevent loss of goods. Reviewing fixture heights, identifying blind spots on the shop floor and placing security mirrors to highlight hard to view places all help.
“Well-positioned signage explaining the security measures in place is also a good deterrent,” he says.
Local attack
National department store retailer Myer recently indicated it is actively tackling the issue of store security. In a speech at the Macquarie Australia conference in Sydney on May 7 this year, Myer chief executive officer Bernie Brookes said shrinkage represents one to two per cent of its sales.
Across its national network, it is embarking on improved management of fitting rooms and EAS systems. It has rolled out CCTV operations into 32 of its stores and all distribution centres, with the remaining due to be fitted by the end of this month. Further measures to protect goods include the increased use of screamer tags for high-risk theft products, such as luxury apparel.
Womenswear retailer Morrisson is also taking retail security seriously, with a strategy in place to minimise theft across its seven national stores. Morrisson national retail leader Luke Pisano says this issue is addressed as a new store is conceived.
“When designing a store we look at the full view of the store – the layout, any blindspots, access to fitting rooms, the counter and the doorways,” he says. “All the cabling is set at that stage of store planning for security cameras etc.”
The Morrisson stores use EAS, in which all apparel is pinned with a security tag that will beep if it goes under sensors at the shop entrance.
“Our smaller leather bags and wallets, we have them pinned also,” he says. “Our accessories and jewellery are in locked cabinets.”
Pisano says staff are trained to be conscious of high-risk theft areas within a store and to merchandise high-value items within clear view. However, he says the biggest deterrent against shop theft is active customer service.
Greeting customers, offering assistance and following up with questions is a strategy that can prevent would-be thieves. In the brand’s larger stores, he says having an appropriate number of staff to manage all areas of the shop floor is vital.
“Shrinkage is higher around busy times of the year – Christmas and sale periods – as there is a lot more traffic that comes through our stores. If you don’t adjust your rostering during those periods, it [theft management] can be quite challenging.”
Security is not cheap, but Pisano believes the benefits outweigh the expense.
“Even in terms of the deterrent of having the stock tagged with Sensormatic, even just having the store buzzers go off occasionally, it increases the awareness that we do have security. You can see that we have cameras in the stores as well. It is definitely well worth it.”
WATCH IT
The Australian Centre for Retail Studies on how to secure goods on the shop floor.
• Never leave the store unattended.
• Staff should know what products are in store so they can recognise any gaps.
• Staff should approach customers and make eye contact. They should be trained how to approach someone if they suspect they are stealing.
• There should be no concealed areas or blind spots on the shop floor.
• For larger stores, having a door greeter is a good idea. If an alarm does activate, someone is there immediately to check customers’ bags. It is also a good deterrent.
• Fitting rooms should be manned by
a staff member at all times. Number tags should be given to indicate how many items are being tried on and staff should check all are returned.
• Security tags should be on all items. They should be hard to remove without the appropriate equipment.
• Have efficient surveillance or security cameras such as CCTV. This should be obvious around the store as it can act as a deterrent for shoplifters.
• Retailers should understand it is not only customers who engage in theft, but employees also need to be watched.
ARE YOU AT RISK?
ADT Security Australia national retail manager Phil Brown says the acronym CRAVED is a useful way to assess the level of risk of shop theft.
Ask, is stock:
• Concealable? Items that can be hidden in pockets or bags are more vulnerable.
• Removable? Can it be easily carried out of the store?
• Available? Desirable merchandise displayed openly will always be at risk.
• Valuable? High value goods are a popular target for thieves.
• Enjoyable? Hot products are naturally the most popular ones to be stolen.
• Disposable? Can the item be resold easily?