The National Retail Federation (NRF) recently reported that over one third (36.5%) of retail companies are increasing their loss prevention budget in 2018. In fact, only about 20% of retailers are decreasing their LP budget.
Loss prevention professionals have a tough job. In fact, the report, which surveyed 63 retailers, states that “respondents say they need an average of 8 additional LP employees to be successful.”
There is no doubt that having additional security personnel on staff can have an impact on external shrink. After all, only 31.8% of retailers surveyed even allow non-LP personnel to make shoplifting apprehensions (5.8% in the apparel industry). However, retailers are now exploring new ways prevent retail, in addition to just putting more boots on the ground.
Moving to an Enterprise Risk Model
One of the report’s most interesting take-aways is reflected in an anonymous from one of the retailers surveyed, “[we’re] moving into an enterprise risk model and away from security. We need more bang for our buck and security alone is one-dimensional. Time to move on from the past.”
One way that retailers are embracing an enterprise risk model is by hiring loss prevention professionals with a diverse set of skills. According to the report, “There is no doubt that the skills needed are changing. Investigatory experience, analytical skills and cyber expertise are all in high demand.”
To make a sizable dent in the $30+ billion shoplifting problem, the approach to loss prevention will likely require some reimagining. At FaceFirst, we’re currently helping customers empower loss prevention with enterprise-grade face recognition. Using face recognition, retailers can:
- Alert LP the moment that a known or suspected dishonest customer enters a store
- Spin up a shared intelligence network across multiple branches of a retail chain
- Leverage analytics to detect threat patterns and optimize when and where security professionals are deployed
Despite loss prevention professionals’ best efforts, it’s clear that the status quo tactics are not enough to prevent external shrink. As retail loss prevention budgets increase, we’re excited to see more retailers embracing an enterprise risk model and investing in new talent and technologies.