Reports of busted shoplifting rings and criminal flash mobs have been making headlines all year, but the larger story of what’s happening in retail loss prevention goes beyond stolen Tide detergent and kids mobbing convenience stores.
To explain the trends that are shaping the industry and what they mean for LP professionals, I talked with Gary Johnson, VP of Loss Prevention for Vitamin Shoppe Industries, chair of the NRF Loss Prevention Advisory Council, and keynote speaker at next week’s NRF Loss Prevention Conference & EXPO in New Orleans.
As we discussed what’s going on in the LP world, a few common themes emerged: how technology is driving the industry (and everyone in it) forward, and the importance of continued collaboration. Read on to find out what Johnson believes are the top five trends to watch in the LP industry this year.
Gary Johnson, Vice President of Loss Prevention for Vitamin Shoppe Industries
1. Organized retail crime is increasing and becoming more violent.
In the recently released NRF Organized Retail Crime Survey, 96% of retailers surveyed reported their organizations had been victims of organized retail crime, up from 94 % in last year’s survey. The factors causing the increase range from lower staffing levels at stores to the ease of selling stolen goods online.
“Retailers continue to wrestle with ORC as criminals become more sophisticated and use technology to better communicate. What’s even more troubling is that the incidence of violence is increasing, which could be a result of the way retailers are cracking down,” Johnson said. “ORC affects businesses differently, so as retailers, we need to leverage our own data. The most important thing in combating ORC is how well you’re collaborating and sharing information with law enforcement and other retailers.”
2. New and emerging retail technologies are opening up new opportunities and new threats.
There’s been an explosion of new technologies in retail, and everything from mobile point-of-sale to e-receipts to the growth of omnichannel retailing has made it essential that LP has a seat at the table when adopting new technologies.
“IT and marketing people are traveling at warp speed on this technology wave, but LP needs to be there to ask the tough questions,” Johnson said. “This is a great opportunity for LP leaders to break free of departmental silos and use their expertise to help guide their companies down this road. It’s our challenge to prevent abuse and privacy breaches, and we can also leverage all this available data to identify internal or external issues.”
3. The role of the LP professional is evolving and advancing.
All that technology is pushing everything forward, including the role of loss prevention. As the economy recovers and retailers reinvest in their loss prevention teams, they’re looking for professionals who can interpret and act on the data new technology has made available.
“Companies are refortifying their human capital, and we’re seeing a shift from focusing on candidates with criminal justice backgrounds to hiring LP analysts to help organizations make data-driven decisions,” Johnson said. “Investing in new technology for LP like remote monitoring is also freeing senior LP professionals up to play a more strategic role in operations, rather than the tactical job of the traditional LP professional.”
4. Retailers, shopping center security and law enforcement are strengthening partnerships.
Organizations like the Arizona Organized Retail Crime Alliance (AZORCA) and the Cook County Regional Organized Crime task force are bringing together retailers and law enforcement at the local, state and federal levels to share information about retail thefts and shoplifting gangs—with encouraging results.
“Technology is allowing us to actively share data back and forth with law enforcement to catch criminals, and that’s culminating across the country in more and more of these organized crime arrests,” Johnson said. “By working together, posting and sharing information on these organizations’ sites, both law enforcement and retailers are able to spot those trends and make connections that maybe wouldn’t have been made without the databases,” Johnson said.
5. LP professionals are facing challenges from current and potential legislation.
Loss prevention professionals are gaining a broader role in the business of retail through the implications of new technology, and with that, a stronger voice in the debate over legislation that affects the industry. Issues stemming from consumer privacy laws, background screening guidelines and ORC will be major concerns for retailers this year, and it’s important for LP professionals to weigh in on the real-world implications of legislation.
“In many areas, we’re trying to use old laws for new problems, and it just doesn’t work,” Johnson said. “At last month’s NRF Washington Leadership Conference, other LP executives and I had the opportunity to discuss ORC, background screening and some internet security laws that are being discussed right now. It’s important to know that NRF takes an active role in the public policy process by talking to lawmakers about today’s problems. We really encourage people to get involved in our LP Legislative Committee to make sure their point of view is represented.”
5 Comments
Great comments. Loss Prevention issues are an ever-present and challenging problem. Johnson’s comments about “using old laws” to combat new problems is right on the money. Technology offers great enhancements but nothing comes without a cost–an unfortunately the bad actors have plenty of time on thier hands to find out how to beat technology for thier thievery.
According to Gary Johnson, Vice President of Loss Prevention for Vitamin Shoppe Industries, companies are hiring loss prevention analysts rather than those with criminal justice backgrounds to reduce shrinkage. Maybe these companies should just hire IT folks and sell their products online. This should significantly reduce any company’s need for dedicated loss prevention professionals.
Hoodkop
I work in various retail stores for various retail chains (won’t name) installing network/security,a/v systems it does surprise me with today’s technology/security systems/loss prevention techniques that people would try to steal but even more it surprises me how many Big Name companies use none to very little/cheap security from none to the use of those fake cameras!
Gary I think your 5 points hit the nail on the head with the trends in the market place. I also believe that we cant ever discount the increadibly dificult job that our store LP folks do with being on the front line. The team I work with are very profesional and do an outstanding job. We have had great success with providing them the appropriate training they need to be able to keep up with the ever changing tecnology.
While market place is moving more online sales than ever before, fraud is increasing here too. Cyber crime, privacy breaches, identity theft. As mobile pos gains traction within retail the fraudsters will be lurking. Theft happens in a physical store or online. Loss prevention people have job security. Johnson’s outward looking view in spot on and the key will be or retailers to leverage technology and data to catch the bad guys. Now we need the court system to do its part and lock these criminals up!