Tech Solutions to Shrinkage in Retail
Few topics were discussed on the stages and sidelines of last month’s NRF more frequently than loss prevention, aka shrink or shrinkage. That the issue will be debated with the same degree of intensity at the EuroShop event later this month is not in doubt.
The urgency seems merited as retailers worldwide, particularly in the US and Europe, grapple with the tactics of increasingly brazen criminals. And the push for an effective solution seems even more pressing considering the balance that brick-and-mortar retailers must strike between security and less friction.
Experiential vs. Extreme
That physical retail spaces are thriving is as true as the need for, if not reinvention, at least a realignment of these spaces. Transformations are underway, with tech solutions playing a leading role. But there are still some major open questions about what the physical retail spaces of the future will look like, how they will support the consumer experience and which changes will support companies’ bottom line.
In recent weeks, photos of shelves of Oreos and other food products under lock and key have been circulating on social media with increased frequency. More consumers are sharing stories of reinforced security details at local retailers.
Many observers of the situation may argue that the remedy cannot be worse than the cause and that such extreme measures will, eventually, compound problems by alienating customers, but the problem is real (and really expensive) and mobilizing governments, trade groups and companies.
Tech and Shrinkage
Realistically, there is no single solution robust enough to respond to the risk of calculated criminality, which by some estimates, is costing the industry upwards of $100 billion annually. In the same respect, there is no single solution for delivering a customer-centric experience.
Physical retail spaces are complex ecosystems pulling together many systems designed to deliver or respond to the varying and often conflicting demands of many groups. The industry understands this all too well, which is why many industry leaders seek out tech solutions that can deliver synergies and solve problems at multiple touchpoints (preferably without creating new problems down the line).
Consider self-checkout or self-scanning, a tech solution that addresses labor strains, fits within broader inventory strategies and gives consumers what they want: frictionless buying without a feeling of time wasted in a queue. Knowing these areas resolve some major issues but still have some vulnerabilities in terms of loss prevention, retailers are looking for supporting systems that can help minimize shrinkage without risking other beneficial features.
Xovis professionals discussed this exact topic, how real-time, objective data can help with loss prevention, at length with many industry leaders at NRF, and plan to do the same in Düsseldorf later this month. We have already seen our high-precision 3D sensors used to support loss prevention strategies in Europe and see enormous potential to expand deployment in many other jurisdictions—for the benefit of retailers and customers alike.
Shrinkage is as old as retail and cannot be resolved overnight, if ever. But tech that can deliver real-time analytics—anonymously, and that is important—about what is happening at both opportunity and problem zones has a great chance of winning favor among retailers prioritizing great retail experiences.
Tags: | retail | technology | shrinkage | consumer | analytics
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