With more than $61 billion in estimated inventory shrinkage costs hitting the U.S. retail industry in 2020, businesses of every breed are fighting a seemingly endless battle against theft.
And nowhere is the problem more pronounced and complex to solve than in the grocery industry. This industry not only battles traditional retail loss threats like internal theft, shoplifting, and fraud, but also concerns about inventory spoilage.
Luckily, as technology has evolved, the ability of grocery stores to use it to their advantage—especially when paired with more traditional loss prevention techniques—has grown too.
To help your grocery business turn the tide against retail loss, here are five key prevention strategies you can implement right away:
Exploring the issue with your staff, finance professionals, inventory software, distribution centers, and store managers will give you a good handle on what your business is up against. This will also provide a baseline for measuring improvements made over time and focusing your prevention strategies on your biggest sources of loss.
2. Tap into Your Workforce
A study by ECR found that among grocery stores for which loss prevention performance ranked in the lowest quartile, working to bring employee engagement up to at least average levels could result in a 12.5 percent reduction in shrinkage and a 9.5 percent reduction in cash loss.
What does this mean for your business? Although investments in technology can help with loss prevention, don’t forget the role that managers and employees play in fostering a culture of ownership and inclusion. In doing so, your business can empower employees to protect against potential losses, identify and mitigate risks, and bolster accountability and awareness among coworkers.
3. Increase Surveillance Technology
CCTV is nothing new when combating theft in grocery stores, but the 2019 NRS Survey points to CCTV and digital video features as the main loss prevention systems retailers use.
In 2020, the use of CCTVs and digital video recorders grew 16.4 percent and 4.3 percent, respectively, with 78 percent of stores using CCTV and 88 percent using video recorders. Once in place, research has found that digital recording devices with features such as facial recognition can reduce shoplifting by 33 percent and identify repeat offenders, which are common in about 60 percent of cases.
4. Implement POS Analytics
One of the most fundamental problems retailers face is a lack of timely and accurate data to track inventory turnover and financial performance over time and monitor for abnormalities that may cause shrinkage.
For many grocery retailers, a point-of-sale (POS) analytics system can be a key loss prevention strategy. With one in place, managers will be able to access more real-time and precise data, including cash flow, the impact of sales and discounts, and transaction monitoring in case of employee theft or error.
Figures like “refunds without a receipt,” “cashier markdowns,” and “refunds on the same day/same-store” are easy to produce with a POS system and can be used to identify areas for increased attention.
5. Utilize Smart Safes
Cash handling is a challenge for any business. From handling cash for basic transactions to storing it safely between deposits or shifts, many organizations are realizing that they need new solutions.
One popular method is the smart safe, which combines the benefits of technology and software with tested security and storage features of traditional safes. When combined, these devices can increase visibility into your cash flow, validate transactions and currency for counterfeit, and provide deposit-ready cassettes for pickup.
Furthermore, smart safes introduce user authentication that tracks employee interaction so it can log abnormal activity and remedy errors.
Bring It All Together
Every business will have a unique combination of reasons for its shrink. Luckily, there are vetted loss prevention strategies and tools that can help you fight back.
To talk through your retail business's unique loss prevention needs and learn more about smart safes and other cash automation solutions, reach out to the team at Burroughs for a free consultation.