Transforming Retail with Technology to Combat Loss

In an evolving retail industry, retailers are always on their toes when it comes to predicting the everchanging consumer demand. They realise how seasonal trends may impact what shoppers want, when they want it; and by how much. According to the Retailers Association of India, retail sales in March 2024 showed an 8% growth compared to March 2023, which was primarily driven by higher discretionary spending on apparel and sporting goods, among other things.

However, a single bad experience can potentially lead to losses as customers are overdosed with market saturation where multiple brands are providing similar services.

It was reported that retail stores in the US lost an estimated US$86.6 billion to retail theft in 2022, with forecasts indicating that it might rise to US$115 billion by 2025, reflecting a concerning rise in theft and crime in retail stores. To counter these challenges, products end up being locked up in cabinets, and this becomes detrimental to the shopping experience. To purchase these products, shoppers will likely need to get help from a retail associate to unlock and retrieve them.

Over one-third of shoppers who participated in a recent Zebra Shopper Study said they would leave a store without the item they wanted because they could not find it on the shelf/display, whereas one-quarter had left because of long checkout lines. If people are not willing to wait to pay for items they already have in their cart, they may not have the patience to wait for a retail associate to come and unlock a cabinet to retrieve the goods they wish to purchase. Yet, retailers need the locked cabinets to prevent theft, as inefficient as it may be.

It follows from the above that, technology is the way to solve this problem because it would not make good business sense to have a retail associate stationed at a locked cabinet all day long just to wait for customers to request for something to be retrieved. At the same time, you would not want to make the shoppers wait too long as that may deter them from buying. 

There are a few technology-based approaches to inventory management that were strategically designed to end the waiting game for everyone and help you minimize the disruption that locked-up items cause -

Shrink Visibility

Retailers could leave the scanning in the hands of your own retail associates. They need minimal supervision and can scan items during their regularly scheduled work hours – any added costs or time required are nominal. In fact, retailers using this methodology report savings of up to 50% over leveraging third parties to bring in outside labor and scan inventory during off-hours. Beyond the cost savings, allowing their retail associates handle inventory events ensures top-notch accuracy, thanks to their intimate knowledge of the stores’ inventory nuances.

This solution would enable the store associates to determine high theft items on a daily, weekly, or monthly basis, if desired, so retailers no longer have to rely exclusively on annual physical inventory counts. Store associates will be able to conduct counts as often as needed, and the data from each scan would be fed into a software platform which identifies and alerts retailers to shrink trends, such as items that appear to be stolen most frequently and should be locked up.

Prescriptive analytics is another useful tool for identifying shrink patterns. This AI-powered software solution is about simple actions, not complex reports. It is a field-proven system that automatically consolidates and interprets deep data from siloed inventory systems to catch and act on inconsistencies in real time. The system analyses all product movements into and out of the store and identifies shrink patterns throughout your various product lines. It then alerts the relevant employee, along with action steps for them to take to resolve any issues discovered.

Conclusion

In essence, the retail industry is navigating complexities due to rising incidents of theft and customer displeasure caused by secured product cabinets. Technology-based inventory management strategies, including shrink visibility and prescriptive analytics, could provide potential solutions. These methods allow for consistent and precise inventory checks, identification of high-risk items, and immediate recognition of shrinkage trends, potentially enhancing the shopping experience and minimising losses.

Read more from Dr Archana Verma here 

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