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The Australian retail industry lost approximately $1086 million last year, with this amount set to escalate further – find out why.
According to Euromonitor International’s Global Retail Theft Barometer (GRTB) 2012-2013, released today, more than $109 billion globally was lost to shrinkage in 2012.
The loss stemmed from shoplifting, employee crimes and administrative errors. However, in Australia shoplifting alone has overtaken employee theft as the main cause of the $2,413 million retail shrinkage overall.
In Australia, customer theft accounted for 45 per cent of the losses, costing $1086 million to the retail industry, while employee theft accounted for 27 per cent or $652 million.
Supplier fraud has accounted for seven per cent ($169 million) with administrative errors and non-crime losses accounting for 21 per cent ($507 million).
According to the research, the fashion category sits highest on the list of most common items stolen in Australia, which also include:
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Fashion accessories
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Jeans
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Footwear
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Lingerie/intimate apparel
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High-value electronics (for example Apple products)
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Consumer health (allergy treatments, milk formula)
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Electronic games
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Satellite navigation/GPS
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Mobile device accessories (cases and earphones)
The report states that shrink is a multi-dimensional threat for retailers across the globe, with shoplifting and employee theft, including organised crime, on the rise.
According to loss prevention provider Checkpoint Systems Australia and New Zealand, growing shrink concerns have put loss prevention high on the agenda of retailers.
Checkpoint Systems Australia and New Zealand managing director and vice president of Asia Pacific Mark Gentle, said companies are keen to invest in effective and proven loss prevention methods.
A majority of the Australian retailers interviewed reported plans to increase their spending with proven loss prevention methods through continuous improvements in order to reduce theft.
This growing awareness has recently also seen retailers collaborating with technology companies and specialists for loss management solutions to diminish these shrink problems.
“The lower employee theft rate has been a result of the focus retailers have had on staff training and security solutions such as radio frequency electronic article surveillance (EAS), making it more difficult for staff to steal from their place of work. Now we are seeing an increase in the rate of shoplifters meaning that some retailers will need to re-evaluate security measures and look at new security technologies that are emerging,” said Gentle.
Checkpoint Systems shrink management and merchandise visibility solutions president and chief sales officer Per Levin said forward-looking retailers are deploying RFID-based solutions that combine protection with visibility at the item level.
Gentle added, however, that he predicts a shift in technology to reduce shoplifting, especially with the emergence of mobile payment systems potentially making theft easier.
But he warned that retailers will need to take a more holistic approach to loss prevention if they are to see a reduction in their shrinkage for the next year.
“Retailers who recognise that loss prevention is not one single issue have the best results in reducing their shrinkage. There is a need to work collaboratively to combat shoplifting, employee theft, vendor loss and administrative errors all at the same time.”