LP Magazine

JUL-AUG 2018

LP magazine publishes articles for loss prevention, asset protection, and retail professionals covering shrinkage, investigations, shoplifting, internal theft, fraud, technology, best practices, and career development.

Issue link: http://digital.lpportal.com/i/1004777

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Page 44 of 68

bottom line. And so when you're looking for dollars to save, shrink is a good place to find them." Keenan tells retailers to think of shrink as two-fold: If product is lost or stolen, it is not available to sell. You lose the cost of the product in shrink, but you also lose the margin. By protecting the merchandise, you can both reduce shrink and increase margin. "Controlling shrink impacts the business—and in so many ways," he said. "If you don't control shrink, it could be a pathway to going out of business." Technology as a Force Multiplier As retailers grapple with these and other challenges, Warne and Keenan agree that technology is key for closing the gaps that exist around both internal and external shrink. Although the survey indicates that US retailers are doing a good job of protecting many high-value verticals, such as consumer electronics, there is always room for improvement. When it comes to shoplifting, one of the top overall sources of shrink for US retailers, electronic article surveillance (EAS) is the leading tool and has been adopted by more than 92 percent of US respondents to the survey. After EAS, the next most popular is alarm monitoring, followed by access-control systems, exception-based reporting, and CCTV. Facial recognition was listed as the least popular loss prevention tool among US retailers, followed by RFID and public-view monitors. The fact that US retailers struggle more than their counterparts in other countries with external shrink suggests that they may be able to close the gap by embracing some loss prevention tools, such as RFID, that are still being underutilized. In the US, the RFID adoption rate of 76.5 percent is lower than in any other country surveyed. Part of the reason might be the fact that US retailers tend to use RFID more for loss prevention and asset protection, while for the rest of the world's retailers, inventory tracking and visibility are the dominant use case. Keenan believes that RFID simply hasn't reached the cost-effective "breaking point" that other tools have. "I believe eventually all retailers will have RFID," he said. "But you have to consider the cost of the tags and readers. Adding a cost to every item is not something that any company takes lightly. There must be an ROI." Keenan says the price of RFID tagging needs to fall before it reaches widespread adoption in the US. Advances in technology may spur that process, he says, if RFID readers can, for example, be developed to provide more accurate, consistent tracking of product. Keenan and Warne both agree that public-view monitors can be a powerful loss prevention tool for retailers of THE WORLDWIDE IMPACT OF SHRINK 44 JULY–AUGUST 2018 | LOSSPREVENTIONMEDIA.COM continued from page 43

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