Retail shrink had an estimated $50.6 billion impact on the industry in 2018, according to the National Retail Security Survey released last week by the National Retail Federation and the University of Florida. The prior year's total was $46.8 billion, according to a press release emailed to Retail Dive.
Robberies topped the list for per-incident loss amounts, followed by employee theft, and shoplifting or organized retail crime. While shrink has been flat for several years around 1.4% of sales, the increase in value is due to retail sales growth, the NRF's release explained.
Forty-three percent of the loss prevention executives surveyed said the largest increase in fraud is taking place in stores, while 30% said it's happening online and 22% said multichannel sales saw the greatest increase.
Cybercrime is an increasing threat faced by loss-prevention teams, and the top issue on the minds of those surveyed. But a majority of those loss-prevention professionals indicated they aren’t often involved in cybersecurity issues. Loss prevention departments are typically called in to react to cyber-related theft or breaches, and only one in four are involved in anticipating and analyzing threats.
"We are seeing dramatic changes in the risks faced by retailers, and loss prevention practices and priorities are evolving to meet those challenges," NRF Vice President for Loss Prevention Bob Moraca said in a statement. "As criminals find new ways to steal, loss prevention teams are finding new ways to stop them. Increasingly, this is a battle focused on technology."
Just as cybersecurity experts have said that retail teams would benefit from greater cross-departmental strategy to mitigate the risks of data breaches, employees across those departments can hinder security efforts. Employee theft combined with shoplifting and organized retail crime typically account for two-thirds of shrink each year, although actions against dishonest employees and shoplifters have declined, the report noted.
The use of merchandise alarms, acoustomagnetic and electronic security tags, check approval screening systems, and digital video recorders saw popularity gains over last year's survey, with methods like remote IP closed circuit TV monitoring, theft deterrent devices, and IP analytics seeing considerable drops in use. Organized retail crime has driven some of this shift in approaches. More than 28% of respondents said large-scale theft has become "much more of a priority" in the last five years. A recent NRF survey focusing on organized retail crime pointed out the frequency of cargo theft impacting shrink even before product reached stores.