Fraudsters do not distinguish between in-store and online in today’s retail environment and nor should loss prevention. Shrink could be greatly reduced simply by retailers joining up their approach to fraud, says the new Retail Fraud Survey, released recently.
The Retail Fraud Survey 2013/14, published by retail consultancy Retail Knowledge and sponsored by payment experts Kount and Volumatic, is the UK’s most extensive report into loss prevention which looks into the concerns of 100 of the UK’s top retailers. It reveals that typically, the head of loss prevention focuses on stores, and online shrinkage is managed separately, so shrinkage levels could potentially be reduced by retailers who have a more holistic approach to profit protection across all sales channels.
Furthermore, those same retailers expect online sales to increase from 12% currently, to 27% in three years. As online grows, the study predicts, retailers will restructure so that all loss prevention, store and online, is managed together. However, during the last three years of the survey, there has not been much sign of a change, it reports.
Other key findings of the survey include a decrease in shrinkage this year to 0.9% from 1.0% of sales last year, – which still corresponds to a massive loss to the industry, an estimated £2.6b – shoplifting or external theft is the biggest area of store loss – 30% of respondents – followed by employee theft of stock at 27%, the biggest area of online loss is from stolen credit cards – 51% of respondents – and a high proportion of retailers that trade online do not have even basic analytics systems –41%.
James Harris, commercial director of Volumatic, co-sponsor of the survey, says: “With the growth of multi-channel retailing, transactions may cross organisational boundaries so it is important that retailers begin to think more seriously about an omni-channel approach to loss prevention.”
Don Bush, marketing VP of Kount and survey co-sponsor adds: “85% of UK retailers have big concerns about their lack of capabilities to fight fraud online, leaving consumers at constant risk from these new and convenient ways to shop.”