Loss Prevention Strategies for Retailers – 3 Best Ways to Positively Impact Your Bottom Line

Implementing the right loss prevention strategy for your retail business is as crucial now than it was ever before. 

For many retailers, both large and small, inventory shrinkage continues to affect the bottom line more and more significantly, which unfortunately has led to some businesses having to close their doors. Ultimately, the answer to this problem lies in proper loss prevention strategies, but the ambiguity of finding the right one for your business has led many retailers down a rabbit hole of asset protection solutions that simply don’t deliver. 

Below, we will cover some of the best ways to identify the right strategies for your business. First let’s look at why inventory shrinkage is such a problem for retailers everywhere. 

How Inventory Shrinkage Impacts Retailers’ Bottom Line 

Inventory shrinkage is the amount of inventory that is lost by a retailer due to external or internal causes, whether that’s theft, merchandise damage, or miscounts. 

Inventory shrinkage is largely unavoidable, at least to some extent. The National Retail Federation reported that, on average, retailers lost 1.6% in sales due to shrinkage in 2022. Even the most vigilant shop owners can’t account for every situation where asset loss occurs, but that doesn’t mean the margin by which it happens can’t be reduced. Especially as it relates to theft and organized retail crime, there are many different methods retailers can use to mitigate the impact shrink has on their bottom line. 

Alongside theft, loss prevention strategies can also benefit other operational areas. At the end of the day, that means retailers will be increasing the return they get from their sales efforts, all while limiting how much is lost in the process. 

Retail Loss Prevention – 3 Indispensable Strategies to Incorporate 

While there are many different methods for strengthening your loss prevention efforts, there are a few strategies that make up the backbone of asset protection. 

These strategies include video surveillance, point-of-sale integration, and employee training, all of which we will cover below. 

1. Video Surveillance for Enhanced Monitoring 

At the top of the list, we have the most fundamental way to bolster loss prevention: video surveillance. 

Having eyes everywhere in your store allows you to deter most internal and external threats to your stores’ assets. Not only can you monitor what’s going on in your store from multiple monitors live, but you can also quickly retrieve footage necessary for any investigations you have going on. It’s simple but incredibly effective, and when paired with easy cloud-managed access, this loss prevention solution becomes even more powerful. 

Combining it with video analytics makes this solution even more versatile, as your security video platform will be able to actively monitor and alert you to areas where you’re needed.  

• Person and Vehicle Detection: Person and vehicle detection helps keep you updated if someone’s detected in areas they shouldn’t be or if a vehicle is spotted on premises after hours.  

• Loitering/Line Crossing: Loitering/line crossing analytics enhance the overall security of your stores even more by alerting on persons entering restricted areas, or people waiting in areas for abnormal amounts of time. 

• License Plate Recognition: To further enhance vehicle searches, license plate recognition (LPR) can identify and locate video of specific vehicles for improved security. 

The applications of video analytics are diverse and versatile, saving you time and money by making video surveillance easier than ever before to use. 

2. Point-of-Sale Integration to Combat Shrinkage 

As we just discussed, video surveillance is a crucial first step in improving any asset protection strategies your business has in the works. However, when security video is combined with point-of-sale (POS) systems, it becomes an incredibly valuable tool, particularly for retail businesses. This is because, for both small and large retailers, theft tends to happen at POS systems. For internal theft, employees can easily steal merchandise and cash via registers or by working with outside groups. 

When tracking down inventory shrinkage, POS systems should be the first place to investigate. Having video to go alongside receipt data is incredibly valuable as well. With just the receipts, it’s hard to know if 5 pieces of inventory left the property when only 1 is recorded. When paired with video, you can see exactly what’s leaving and why it’s occurring. A POS integration can also benefit employee training (which we’ll discuss below). While shrinkage may be occurring due to theft at registers, it could also be due to operational error, which can be just as easily addressed. 

3. Proper Employee Training for Workplace Optimization

Finally, training your employees to recognize and report theft/fraud at point-of-sale systems can eliminate a significant portion of inventory shrinkage. However, it’s also important to ensure every member of your team is safely and accurately handling inventory. According to the aforementioned National Retail Federation survey, process, control failures, and errors accounted for 27% of total inventory loss. Properly training employees to safely handle merchandise can help reduce the risk of losing merchandise to any damage or miscounts that it may undergo. 

The two previous solutions are valuable to be sure, but they’re only as successful in their application as the hands you put them in. Having staff that are equipped with security tools they feel confident in using can help bolster your asset protection strategies significantly and create a team that you can trust. 

Learn More About OpenEye’s Loss Prevention Solutions 

Loss prevention strategies are essential for nearly all retailers nowadays. Luckily, OpenEye has all the tools necessary to equip your team with a comprehensive and easy-to-use cloud-managed video solution. Our products are designed to help customers streamline operations and reduce the burden on IT, making it easier to manage and maintain video surveillance deployments and integrations of all sizes. 

OpenEye Web Services (OWS) provides actionable intelligence so you can protect and grow your retail business. Video analytics in OpenEye Web Services enhance the capabilities of our platform even more with proactive alerts and search of analytic events. OWS also integrates with point-of-sale systems for improved monitoring of retail operations. POS Connect enables retailers to search and alert on receipt data, with associated video pulled up for a second layer of visibility into transactions. By combining and analyzing POS data with video, OWS delivers insights that enhance security and increase your bottom line. 

If your business is in need of a complete asset protection solution, book a demo with us today. We’d love to see how OpenEye can help your company take advantage of our powerful cloud-managed video solution.