Loss of inventory or retail shrinkage can take many forms, such as shoplifting, supply chain, delivery theft, fraud, and even organized crime.
AI technology works faster than ever to prevent losses, and retailers invest in it to protect their products and customers. According to Forbes, 37 percent of retail shrinkage is caused by external theft, when an item is stolen off the shelf.
Shoplifters target items with high street market value, such as power tools. Additionally, employees commit theft by ringing up fake returns, improperly using employee discounts, and stealing cash from point-of-sale systems. There is also a new trend called “sweethearting”, in which an employee steals an item to give favorable treatment to a customer.
Supply chain and delivery theft is another form of inventory loss, as products can be stolen in transit. Return and vendor fraud is also a problem, with stolen merchandise being returned after being purchased with counterfeit money or receipts and employees creating false vendors and invoices to direct payments to themselves.
Lastly, organized crime is a major issue, with the NRF survey revealing that 52.9 percent of retailers have reported an increase in this type of theft. Retailers use AI video analytics to combat these threats at point-of-sale and self-checkout terminals, sensory heat maps, cash automation technology, autonomous security robots, and license plate readers. Intelligence-based loss prevention systems are helping retailers fight theft, and many are increasing their budgets to invest in this technology.
Retailers must embrace these systems to protect their products and customers, and this trend is expected to continue.