Fraudsters do not distinguish between in-store and online in retail, and nor should loss prevention. Shrink could be greatly reduced simply by retailers joining up their approach to fraud. So says the new Retail Fraud Survey, commissioned by retail consultancy Retail Knowledge Ltd from retail researchers Martec and sponsored by payment product companies Kount and Volumatic. The Retail Fraud Survey 2013/14 suggests 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.
Those same retailers expect online sales to increase from 12 per cent currently, to 27pc 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 findings:
A decrease in shrinkage this year to 0.9pc from 1.0pc of sales last year. This still corresponds to a massive loss to the industry – an estimated £2.6 billion
Shoplifting or external theft is the biggest area of store loss (30pc of respondents), followed by employee theft of stock at 27pc.
The biggest area of online loss is from stolen credit cards (51pc of respondents).
A high proportion of retailers that trade online do not have even basic analytics systems (41pc).
James Harris, Commercial Director of Volumatic, co-sponsor of the Survey, said: “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 added: “85 per cent 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.”
