Written by Duncan Jefferies
The recession has contributed to an increase in organised retail theft and to more violence and intimidation of employees. But there is some good news: there is continuous improvement in the technology solutions designed to aid retailers in their fight against crime, notes Duncan Jefferies.
Last year it was revealed that some supermarkets had been forced to tag prime cuts of meat because shoplifters were increasingly stealing things they needed rather than things they planned to sell. The story highlights some of the shrinkage and loss prevention challenges retailers face in the post-credit crunch world, where theft is on the rise along with incidents of violent abuse. According to the BRC’s Retail Crime Survey 2009, published in January this year, the number of retail thefts by customers rose by a third over 2008/2009, and violence and abuse against staff has doubled. In fact, there was a 10 per cent rise in the total cost of retail crime over the period, with UK shops paying £1.1 billion in damages.
Neil Matthews, general manager of shrinkage management solutions at Checkpoint Systems, says security budgets were often cut when the recession hit, but that trend is now reversing. “There were some short sighted views on protecting various stores and products, and investing in equipment. But this year we’ve seen a pickup in sales. I think that’s because retailers started to see an increase in shrinkage last year, which has prompted them to take action in 2010.”
Jon Marchese, director of business development at TAG Company, says retailers are now reevaluating their security setup. “Are their item level protection solutions correct? And also are the tags being applied in the correct location - i.e. at store level, distribution centre level, or at source? Where could they gain cost savings? These are the kind of questions they’re asking now as they reinvigorate their programmes.”
But with margins still tight, value for money is high on the list of requirements when purchasing any new equipment. Bundled packages - whereby an IP CCTV solution may also come with VOIP, video analytics tools and more - are one way of achieving savings. However, take-up has not been as strong as one might expect, perhaps due to the complexities of in-store IT environments.
“There is a trend toward moving from the old digital and old analogue systems to an IP one which connects into their systems,” says Matthews. “It’s not widespread yet, but I think it will continue as and when retailers’ networks improve.”
Electronic Article Surveillance (EAS) systems, which operate via tags that are removed when an item is brought, can potentially be connected to a network too, allowing retailers to monitor performance across the store estate. “The biggest stumbling block is actually the IT infrastructure, and giving EAS companies access through the store’s firewall,” says Marchese. “You need to involve IT, and that is a very long and slow process.”
Matthews says a number of retailers, particularly in the fashion and apparel space, are investing in an EAS solution with a view to upgrading to RFID in
future. “One of the big starting points is to get the RF labels put on at source. And then once you’ve got that process in place, all you then do is convert the labels by adding a chip.”
Checkpoint Systems is working with a number of tier one retailers to incorporate RF deactivation into self-scanning units. At present removing a hard tag or RF label often requires intervention from a member of staff, or it is left on by
mistake, setting off alarms. “If they’re using labels they automatically get deactivated when the shopper scans the product. There is deactivation around the whole scanning window on RF, because you get anything between 6-10 inches of scanning performance.”
It is important to carefully consider how any tagging solution will be integrated into an existing store environment. “The design of the store front, the way retailers place merchandise around the door - that’s obviously a key selling space,” says Glynn Gordon, managing director at Maxtag UK. “But there’s often an issue with the security system at the door, such as tags on merchandise that are too close to it. That can create a conflict of interest between the design group and the security element.”
He feels there has been a shift in terms of what tags retailers are looking for. “Going back three years I think there was a big push around stock arriving at a store with labels sewn in or built into the swing ticket. But now I think there’s been a big shift back to hard tags. And increasingly on high value items we’re seeing an uplift in demand for alarming tags; not just tags that alarm at the door, but potentially alarm within the store if tampered with at the point of display.”
Thieves target stores with weak security, where EAS systems are switched off or not working properly. “Tagging systems are meant to be deterrents, and really what we say is they will deter 8 out of 10 people,” says Gary Sahota, managing director at Invotech UK. “The professionals, somebody who really wants an item, will bring in foil lined bags, grab an item and run out…Nothing is ever going to be 100 per cent.”
Till snatches and internal shrinkage have also risen over the past few years. Cash 360, created by G4S Cash Solutions, aims to combat this by allowing a retailer to “lock down” cash as it is received from the customer. “It’s deposited into a device at the PoS which not only secures the money, but also counts and validates it,” Alistair Fowler-Marson, head of retail development at G4S Cash Solutions, explains.
“After it has been deposited no member of staff, including the manager in the store, has access to it. This has a number of benefits. Firstly it means there’s no excess cash building up in the till, which would therefore increase the risk
of a violent attack or a till snatch. Secondly it means this 40 per cent of internal fraud is then eliminated because the cash cannot be retrieved by the members of staff; it’s behind a centrally controlled lock.”
G4S Cash Solutions collect the money, negating the need for anyone at store
level to be involved with the cash collection process. “The final benefit is that all of the cash that’s been deposited, because it’s been counted by one of our devices, retailers know exactly what they’re going to get in their bank account,” Fowler-Marson adds.
Despite advances in tagging, cash-handling and IP CCTV technology, a human in-store security presence is still essential. “You have to get the balance right. You can reduce your security guards, providing the staff are well trained and the staff take total ownership of security within the store. Technology is just technology at the end of the day. It’s only a deterrent as long as somebody takes action when something happens.”