By Aimee Chanthadavong
Shoplifting has overtaken employee theft as the main cause of the $2,413 million black-hole of retail shrinkage, according to Euromonitor International’s Global Retail Theft Barometer for 2012-2013.
The study, funded by Checkpoint Systems, found more than $109 billion was globally lost to shrinkage as a result of shoplifting, employee theft and administrative errors.
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. Supplier fraud has accounted for 7 per cent while administrative errors and non-criminal losses accounting for 21 per cent.
The most common items that were stolen by customers in Australia include fashion accessories, jeans, footwear, intimate apparel, high value electronics, consumer health, electronic games, GPS devices and mobile accessories.
Mark Gentles, Checkpoint Systems Australia and New Zealand managing director and vice president of Asia Pacific, said the report reflects the trend that companies have invested in internal security measures to ensure employee theft is reduced, but on the flip side, some might not have focused as intently on customer theft.
“The lower employee theft rate has been as a result of the focus of 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 work,” he said.
“Now we are seeing an increase in the rate of shoplifters meaning that some retailers will need to revaluate security measures and look at new security technologies that are emerging.”
As a result of growing shrinkage concerns, retailers has put loss prevention high on the agenda with a majority of Australian retailers that were surveyed saying they plan to increase their spending on loss prevention methods to reduce theft. This includes collaborating with technology companies and loss prevention specialist management solutions to reduce the shrinkage problem.
“Forward-looking retailers are deploying RFID-based solutions that combine protection with visibility at the item level,” said Checkpoint Systems shrink management and merchandise visibility solutions president and chief sales officer.
“This type of strategic platform, combined with investments in people and processes, opens up new horizons to reduce out of stocks, improve merchandise availability for consumers and increase sales for the retailers.”
Gentles also suggests retailers will need to take a holistic approach to loss prevention if they want to see a reduction in shrinkage in the next year, especially with the emergence of mobile payment systems potentially making theft easier.
“Retailers who recognise that loss prevention is not one single issue have the best results in reducing their shrinkage,” he said.
“There is need to work collaboratively to combat shoplifting, employee theft, vendor loss and administrative errors all the time.”