New data from the National Retail Federation (NRF) shows that retail companies now allocate more resources to technology than to hiring additional staff. Retailers are realizing that, thanks to artificial intelligence, technology solutions can act as a force multiplier, enabling fewer staff members to work far more efficiently.
As an example, facial recognition can be used to provide retail security personnel with actionable alerts that tell them where to go and who to watch. This can help retailers actively prevent ORC without a need for additional staff, as it makes each loss prevention professional more effective.
According to NRF data, 29.3% surveyed said they were allocating new resources to technology, while only 17.3% said they were hiring additional staff dedicated to combatting ORC. Compare this to 2016 data, in which 40.7% of companies said they were allocating additional resources to both technology and staff.
As solutions like face recognition automate ORC-prevention, we expect a further reshuffling in the needs of skills in the future. In other words, we might see more employees who are partially dedicated to loss prevention while already fulfilling other roles. NRF concurs, “Expectations for the future loss prevention team may include more employees with LP as part of their job description but not their entire role.” This may be a direct effect of technology acting as a force multiplier.
We fully expect this trend to continue, as retailers embrace new technological solutions to combat rising ORC.
Sticking Point: Top Management
One potential headwind toward rapid adoption of ORC-prevention technology like face recognition is top management’s understanding of ORC. According to the NRF Organized Retail Crime survey, only a little more than half (54.7%) of retailers surveyed believe that top management understands the “complexity and severity” of the ORC issue. This is a steep drop from 2016 (71.2%).
It’s therefore more vital than ever for loss prevention professionals to do what they can to ensure that management is not only educated about how serious ORC is, but also educate them about the technology that’s currently available to help prevent ORC. ORC-prevention tech can have a major impact on ROI. As an example, FaceFirst’s face recognition solution for retail has been proven to reduce external shrink by up to 34%. In fact, we built an ROI calculator that can help retailers calculate how much they can save by reducing external shrink.