Stores are using a wide range of new technologies to thwart would-be shoplifters, from intelligent video surveillance, in which a camera zooms in on suspect behavior, to sensors that alert the store when too many items are in a dressing room or taken off a shelf. Those technologies were on display recently at the National Retail Federation’s Loss Prevention Conference and Expo in San Diego.
Joe LaRocca, the federation’s vice president of loss prevention, says companies need to invest in cutting-edge technologies because losses from theft and fraud continue to climb, increasing to $41.6 billion in 2006 from $37 billion in 2005. The real challenge is the organized groups that are willing to steal a shelf full of jeans and sell them on the black market. In the past few years, organized retail crime, as it is called, has exploded as the Internet has provided an anonymous venue by which to sell stolen goods. A recent National Retail Federation survey found that 79 percent of retailers reported being victims of an organized shoplifting ring. The groups can employ any number of tactics to grab a large quantity of goods. First, they make sure to case the stores, looking for where the cameras are and sizing up how attentive the staff is, LaRocca says. Once they have identified a store’s weak spots, the shoplifting gang can simply run into a store and clear a whole shelf of Gillette razors, which rank among the most popular theft items, along with jeans and baby formula.
Because it is difficult to find the goods after they are stolen, the key is to prevent the theft in the first place, says Dick Lockard, director of The Big Space. The Big Space, along with Motorola and Paxar, have created what they call the Magicmirror, which scans items that have radio-frequency identification chips embedded in the price tags. When a shopper enters the dressing room, the mirror quickly lists all the items and sizes she has brought in. If the shopper wants a medium instead of a small, she taps the mirror and a sales associate is alerted to the request through a mobile device.
Lockard says the Magicmirror, which is already in use at a few boutiques in Europe and will be in the United States by the end of the summer, helps improve customer service, which in turn prevents theft.
German Arias, president of Flashfog, says the key is to make it hard for thieves to complete their mission. His solution is to smoke out the thieves—literally. When triggered, his Flashfog device fills a 1,000-square-foot room with nontoxic smoke in 30 seconds. The smoke and strobe lights make it almost impossible to see, he says. As soon as the smoke begins to billow, shoplifters run. If not, the smoke slows them enough that police can get to the scene and arrest them.
But it is not just outsiders who can hurt a retailer’s bottom line. The National Retail Federation estimates that 47 percent of all losses, about $19.5 billion, were due to employee theft. To combat inside jobs, companies such as ADT are working on analytical tools that can find suspicious transactions, such as returns. Chris Garrison, ADT’s business development manager for emerging technologies, says retailers used to go through receipts manually, trying to spot fraud. Now, companies can find anomalies quickly with the help of databases and real-time video monitoring.
Garrison says one example was a cashier who defrauded her company by keeping a $60 shaver behind the cash register. When relatives and friends came in, the cashier would simply scan the shaver as a return and give them the $60 in cash. ADT’s software was able to highlight the fact that the store’s returns outpaced others in the chain and that the same item was being returned repeatedly to the same cashier.
By Jennifer Davies