The Future of Loss Prevention Innovation
We’ve already talked about How Analytics Will Revolutionize LP and The Data that Changed LP Forever, so I want to take a moment to look at how innovations in Loss Prevention (LP) analytics will have a strong impact on a retailer’s day-to-day operation and the bottom line.
In this new loss prevention world, retailers will be able to optimize staffing so employees can have ample time to readily assist customers and improve shopper engagement. The need to offer good customer service is central to driving sales in today’s competitive and transformative market. To gain an advantage and differentiate from the rest, retailers must have and use the invaluable insights derived from data via multiple channels. Consumers can research, shop and buy online and in-store from the convenience of their smartphone or tablet. This non-stop activity from today’s always-on, always-open retail world offers a treasure trove of data to be harnessed.
Technology transforms knowledge into power. Leveraging the power of data from various sources gives retailers a more holistic perspective of their customers, along with a better understanding of the market, and insights into areas of potential loss. Combining these insights allows retailers to make informed business decisions based on predictive and meaningful analytics versus taking reactive measures. Predictive analytics enable retailers to analyze consumer behavior, focus on needs and preferences and help prevent behaviors. For example, they can have a more complete idea of their customer’s journey, be able to proactively respond to potential Organized Retail Crime (ORC) threats, and understand how operational decisions impact shrink, including root cause and ways to prevent loss.
A Constant Pulse of Store Insights
Fortunate retailers are blessed with a consistent revolving door of shoppers coming and going. This presents a bigger challenge for loss prevention – complicating efforts to identify shoplifters with foil-lined bags and members of ORC. Gaining a sightline into ORC events or even geographical shopper data can result in more insightful loss prevention measures. For instance, if retailers had an ORC data map they could pinpoint a specific area where ORC activity is happening and group the stores with the same type of events. These insights can empower retailers with analytics for proactive decision making to help reduce ORC occurrences in these geographic areas. (Over 9 in 10 respondents were a victim of ORC, according to the National Retail Federation’s 2017 annual Organization Retail Crime survey.) On top of identifying loss events, retailers are tasked with preparing for the future and grappling for insights into how they can stay ahead of the local, regional or global competition, while still protecting inventory they already own.
Imagine being able to have multiple data sources in one dashboard to understand not only loss prevention, but also traffic and inventory insights to help retailers analyze how these components fit into their overall shrink ecosystem. Picture having loss prevention insight from external data sources such as weather to predict demand for high-value, high-theft seasonal products like outerwear and footwear, and from in-store sources like employee sales transactions to gain insights into reasons behind returns, exchanges, and refunds as well as errors in sales and what’s contributing to those loss trends. These collective metrics give retailers a single view of the potential impacts of shrink on the business.
By using consumer behavioral data in combination with sales and market conditions, retailers will be empowered with insights to more accurately understand all that is happening within their stores. This dashboard will bring in new data, customized to each retail operation, having the ability to benchmark against other data in the same vertical market – to take predictive and proactive operations to a whole new level. Retailers will be able to analyze alarm rate trends based on their applied filters and see an overview of the types of alarms occurring, such as metal-foil and jammer detection alarms. In addition, they’ll be able to see how in-store traffic impacts the quantity of alarm activity. This can assist with highlighting unusual trends, such as if there are a high number of alarms, but very low traffic in the store, or vice versa. Being able to analyze unusual patterns and pinpoint the origin of issues in near real-time helps retailers gain better control of their losses and stay competitive.
A connected database with advanced reporting can make this a reality for retailers. Actionable data, like assigning a monetary value to loss events according to specific parameters, can benefit productivity and profitability. By having one database that connects the data from historically disparate systems, retailers not only can see insights in one place but also can adjust loss prevention strategies for more effective, data-driven decisions and ultimately a better store performance.
They can make important infrastructure, training, and technology investments without wondering if this will make a measurable difference. The ability to have such data, prepare and predict for it, will set retailers apart and gain loyalty among customers for better inventory, less shrink and more enjoyable shopper experiences.
Remote Capabilities for the Future
As retail becomes more “always on, always open,” store hours and off-hour operations continue to expand. With extended hours come additional expenses as employees need to work longer and later. Any way of working “remotely” will take on new meaning and appeal, as technology will enable retailers to have fewer feet on the ground yet accomplish more, saving time and money. It’s important for retailers’ strategies to match that trajectory, and that’s where remote capabilities come in. Taking advantage of remote monitoring and managing technology solutions’ health status frees up associates to focus on priority number one — customers.
Gone are the days where an IT technician needs to be physically present in the store to fix something or check if a system is working correctly. With a remote diagnostics centers, stores can be fully connected and aligned, with unique dashboards to make operators more efficient and responsive – from anywhere, anytime. Easy access to diagnostics, remediation, audits, and alerts allow for proactive 24/7 monitoring of connected EAS equipment, firmware updates, and service scheduling. Luckily, this is a recipe for preventative management and predictive decisions that retailers can take full advantage of now.
A Connected Loss Prevention Experience
The proliferation of connected devices and data coupled with improved, less expensive technology platforms and the adoption of common standards will only increase the adoption of IoT technologies across the industry. Success in the future will come to retailers who are able to connect, collect and act on data to bring better insights into their retail operations.
The future of loss prevention is strong, and near real-time integrated dashboards with benchmarking and third-party data is just the beginning. Tyco Retail Solutions’ new Shrink Management as a Service (SMaaS) offering can help retailers manage shrink with future goals in mind while addressing underlying root causes. This new cloud-based service provides both remote device management, along with predictive analytics, to manage shrink while improving sales and optimizing staffing.
You can learn more about our Shrink Management as a Service (SMaaS) offerings, here.