It’s no doubt store foot traffic is at its highest peak during the holiday season. And with increased rates of shoppers, inventory, and operational management, are you doing everything you can to implement a solid holiday retail loss prevention strategy?

This year, reports are saying the biggest concerns retailers are facing are theft and violence in stores. The National Retail Federation states that “more than 65% said they are concerned about mass violence or shootings, up from 58% in 2021.”

In 2022, external theft, including organized retail crime, caused an average 36% of total loss; employee theft 29%; and process, control failures and errors 27%, per the report. The rest was due to unknown reasons and “other.” – NRF National Retail Security Survey 2023

Key takeaways you will learn from this article:

• Holiday season shopping trends and shrink rates
• Top tips for preventing shrink in retail with effective loss prevention strategies
• Noteworthy trends retailers are taking to reduce retail shrinkage during seasonal times of the year

Black Friday – shrinkage by the numbers

The most wonderful time of the year isn’t always so wonderful for business owners, inventory managers, and other stakeholders accountable for revenue-impacting goals, metrics, and reports.

It’s no doubt Black Friday is the leading day for increased retail shrink. NRF found that a record 196.7 million consumers shopped over the Thanksgiving holiday weekend last year, and a Newsweek study found that 67% of these consumers shopped at physical retailers.

Source: NRF’s 2022 Thanksgiving Weekend Consumer Survey, conducted by Prosper Insights & Analytics

This year, Loss Prevention Magazine predicts that 80.4% of sales will occur in physical stores. Despite the emergence of new online purchasing methods like e-commerce, mail-orders, and services such as buy online, and pick-up in-store (BOPIS) ––in response to the pandemic, shrinkage rates are on the rise due to new issues and areas of loss arising from these innovations.

December shoppers – completing Christmas lists

The National Retail Federation today forecast that holiday spending is expected to reach record levels during November and December and will grow between 3% and 4% over 2022 to between $957.3 billion and $966.6 billion.

During Q4, retailers are anticipated to encounter their highest sales volumes and, but simultaneously, their most challenging performances in terms of margin rates. Retailers are losing loads of profits due to heightened shrink and theft, stemming from internal factors such as employee theft and fraud, as well as external sources like shoplifting and organized retail crime.

What is retail shrink or ‘shrinkage’?

In 2022, retail businesses lost a whopping $112.1 billion due to shrinkage. That’s an average shrink rate of 1.6% of annual revenue, according to a study conducted by the 2023 National Retail Security Survey, an increase from 1.4% in FY 2021.

Retail shrink is the reduction in a business’s earnings or inventory, typically caused by factors such as wastage, theft, or discrepancies between recorded and actual stock levels.

Preventing shrinkage is critical to securing your business’s profitability, and loss prevention is the top strategy to help implement protection, insights and change at your establishment.

Top individual factors contributing to retail shrink:

• Employee theft
• Return fraud
• Shoplifting
• Operational loss
• Vendor fraud

The top tips for reducing retail shrinkage and preventing loss

With the numbers above, you may be feeling slightly out-of-luck with your ideas for prevention retail shrinkage during the holiday season. DTiQ has the answers you’re looking for.

Technology to aid in preventing shrink for businesses is here, letting you take a modern and proactive approach to preventing shrink at your retail stores. Retail loss prevention software enables store owners to remotely monitor their business through their smartphones or computers. Not only do these intelligent video systems deter theft, but they also provide insights into employee and customer behavior, helping improve staff performance and enhance the customer experience.

But it gets even more innovative than that: more advanced providers — like DTiQ — can customize loss prevention insights with advanced analytics, artificial intelligence technology, and mobile app remote monitoring that work to help meet your business’s loss prevention goals.

Let’s look at the ways that a smart video surveillance and loss prevention provider can help in preventing shrink.

1. Intelligent video

Intelligent video solutions combined with real-time data with advanced analytics are tactics you need to take advantage of for heightened customer engagement and operational optimization. Insights like customer tracking, traffic analysis, speed of service enhancement, and more, can be monitored and addressed with action-oriented feedback in staffing, merchandising, coaching, inventory management, and service improvement.

Features like regular monitoring, remote incident archiving, and cloud-hosted business intelligence take your surveillance game to another level. Motion detection, off-site data storage, and mobile app access for on-the-go decision-making make DTiQ’s competitive edge unmatched.

[Book a demo to harness the power of intelligent video for your business.]

2. Audits

What is a SmartAudit™? A way to improve business performance; a tool that combines the expertise of our certified professional auditors with state-of-the-art video algorithms to deliver invaluable insight, ensuring that your locations maintain compliance and safety standards. Detailed POS transaction data allows you to identify key trends, incidents, compliance hiccups, shoplifter activity, safety hazards, instances of fraud, delivery orders, discount transactions, and much more.

3. Advanced analytics

Advanced analytics such as reporting, intelligent tracking, and seamless data integration are necessary to keep up to speed on your business’s run-of-show. With DTiQ exception reports, you can effortlessly identify and review suspicious transactions, receiving alerts that keep you in the loop when incidents occur by observing video and audio surveillance for easy verification. By integrating with your point of sale, you can review detailed timestamp data and video footage, ensuring you can match POS line items with cashier activity.

DTiQ’s 360iQ business intelligence platform is one of the most robust products on the market, combining video, live sales, alerts, and reports to paint a comprehensive picture of your entire business. You’ll receive detailed data and insights into your operation, receive event triggers, alerts and notifications, and real-time in-store analytics that identify potential instances of discount fraud, unauthorized voids, and other forms of financial loss.

With DTiQ’s managed services, you can trust our professional expertise to support your loss prevention efforts, providing you with more time and freedom to focus on running your business effectively.

Retail loss prevention

If running a business’s operations, store functions, and contributing to profit are part of your role’s responsibility, retail-specific loss prevention services are in your hands to reduce shrink in retail year-round: inventory management, improve employee performance, and ultimately enhance the customer experience. With advanced surveillance tools and in-depth analytics, LPI by DTiQ offers features like:

• Mystery shopping
• Employee engagement tools
• Exception-based reporting
• Industry benchmarking and reporting
• Investigative support
• Merchandise tracking processes
• Remote and in-person audits
• Staff monitoring and training

Bonuses:

• Camera agnostic integrations: no new cameras needed! We’ll work with your current equipment.
• Mobile app designed for feasible monitoring and management. Easily access data wherever you are.
• 24/7/365 customer support.
• Complete functions, customizable features, and supporting resources available.

Tips for preventing shrink in retail year-round

Unfortunately, shrink isn’t a once-a-year issue. Here are some tips for preventing shrink year-round.

• Inventory control: utilize DTiQ’s cutting-edge tools for effective inventory control, ensuring the best resources are at your fingertips.
• Regular audits and reviews: strengthen your defense against losses by implementing regular audits and reviews.
• Regulatory compliance solutions: stay up to date on your establishment’s regulatory requirements.
• Ongoing employee training: invest in continuous employee training to create a vigilant and informed team, enhancing overall security measures.

Brands preventing shrink in retail with DTiQ

DTiQ takes pride in its partnerships with brands committed to proactive loss prevention, embracing the “smarter store” concept to enhance their operations.

rue21

Rue21 reduced its shrink percentage by 28% in the first two years, lower than any of the five years prior to the partnership. Additionally, DTiQ supported rue21 with:

• 3,632 conducted audits, marking a 100% increase from the previous LP team at rue21 who did not conduct audits.
• 648 conducted investigations, marking a 28% increase despite the partnership starting in 2020.
• 324 reported exceptions, resulting in at least 100 more EBR exceptions year-over-year.

Read more about how rue21 reduced their annual shrinkage rate with DTiQ.

What you can do to improve your business’s loss prevention strategy

Equipping your business with intelligent loss prevention solutions is the number one way to get lost profit back from areas you may not always have eyes on.

Even during the holidays, DTiQ is determined to help strengthen your loss prevention initiatives by automating monitoring processes, improving situational awareness, identifying anomalies, and offering valuable data-driven insights. These technologies empower businesses and organizations to mitigate security risks, minimize losses, and enhance overall safety and security.

See how DTiQ’s loss prevention solutions can help. You can contact us or book a demo to see our technology in action.

Executives of department stores are scratching their heads about how to compete with the rise of specialty retail stores. Focusing on personalized shopping experiences and specific product categories, these retailers are giving shoppers a reason to choose them over big-box alternatives.

In this guide, DTiQ discusses the specialty retail market and what business owners need to know about today’s industry.

Understanding the Specialty Retail Market

First, what is specialty retail, and does your business fall under this umbrella? These stores and e-commerce brands have a very specific focus, catering to niche markets. They typically carry a limited inventory featuring carefully curated collections of high-quality items.

Sustainably sourced, handcrafted, and locally made products are often the stars of the show, but specialty retail, in general, is a consumer destination for unique, long-lasting, attractive items. Sporting goods stores, bookstores, florists, furniture stores, and office supply stores are all considered specialty retail stores. Examples include:

• Home Depot
• Best Buy
• Barnes & Noble
• Ulta Beauty, Inc.
• At Home
• Williams-Sonoma

The American specialty retail industry has sustained steady growth, projected to soar to USD 442725.74 billion by 2031. This is largely because of the way COVID-19 shifted consumer spending habits and preferences. However, the desire for individualized shopping experiences and a need for certain products and services has also contributed to the industry’s increasing value.

Some of the major trends and consumer preferences that specialty retailers can expect to implement into their planning include:

• Increasing availability of credit options
• The increasing rate of urbanization and its effects on the industry
• Higher frequency of ecommerce purchases compared to brick-and-mortar
• Heightened competition with international brands, especially China and India
• Prioritizing investments in specialty retail technology, research, and development
• Demand in certain sectors, such as home improvement, motorcycles, and bicycles

Sourcing Products and Inventory Management

No matter the retail specialty, businesses need reliable supply chain partners to keep their inventories stocked and profits growing. This is vital for keeping up with department retail stores, which have established relationships with suppliers and vendors. Plus, gaps in inventory availability can affect how the consumer perceives the specialty retailer, potentially influencing them to shop elsewhere.

Aside from ensuring dependability with suppliers and vendors, product quality and variety are just as important. Goods and services should always be consistent in appearance, packaging, quality, and other features. Inconsistent quality can position the specialty retailer in the wrong light, and consumers who assume cheap quality are likely to stop giving that store business.

Luckily, specialty retailers don’t have to fight this battle alone. By implementing efficient inventory management systems and other loss prevention solutions, businesses can put safeguards in place to protect their bottom lines.

Inventory Challenges

The COVID-19 pandemic sent shockwaves through the specialty retail sector, exacerbating inventory challenges. Supply chain disruptions became more frequent and severe, with global lockdowns and restrictions disrupting production and transportation.

Sourcing products effectively to maintain product inventory and quality is more important than ever.

Staffing and Training

Just as inventory must always be reliable, the same can be said for specialty retail staff. During the hiring process, stores need to define staffing requirements based on their niche market and offerings. Recruiting and hiring knowledgeable, passionate employees is the gateway to offering the personalized shopping experience consumers desire.

Even if they hire an expert, specialty retailers should provide thorough training for each employee to ensure exceptional, seamless customer service. These training sessions should cover areas such as:

Product and Service Knowledge

High-quality specialty goods and services must be matched with extremely knowledgeable staff members, who know offerings inside and out. Training should cover every detail and selling point for each product in stock or service offered. Companies can always offer in-depth training, but it also helps to hire individuals with prior retail experience, strong attention to detail, and excellent communication skills.

‍

Generating a Pleasant Atmosphere

From welcoming and greeting customers to keeping the space clean, providing a pleasant atmosphere in a specialty retail space is one of the best ways to encourage repeat business. From an interior design perspective, the physical storefront should feel more intimate and cozy than a big-box store with aisles of items and with a select few employees. When it comes to interacting with customers, product expertise, friendliness, respect, and honesty should always be top of mind.

How to Personalize Customer Service

It can be as simple as remembering a repeat customer’s name, products they like, and what they’ve purchased in the past. Specialty retailers can also utilize marketing technology to create memberships, and reward programs, to encourage repeat customers. This data can also be used to analyze consumer behavior to find strengths and weaknesses in customer service. Whatever the approach, personalizing the customer experience begins with each employee and the interactions they have with every consumer.

Pricing Strategies and Profitability

In specialty retail, the market will always be unpredictable, even if trends look promising for the near future. The COVID-19 pandemic is a great example –– when in-person shopping was discouraged, ecommerce statistics skyrocketed in the United States and around the world. However, the pandemic recovery period is indicating an uptick in brick-and-mortar shopping, so the COVID-19 boom could prove to be a once-in-a-lifetime opportunity.

Of course, a global pandemic doesn’t happen every day, so businesses must also consider factors like the state of the economy, seasonal slow periods, and wholesale cost increases. The key to weathering any market trend is setting competitive pricing while maintaining profitability. By understanding pricing models and strategies, specialty retail stores can manage discounts, promotions, and sales effectively.

Customer Experience and Relationship Management

Personalizing the customer experience is a process that never truly ends. Specialty retailers must always be enhancing the in-store experience for customers. If online purchases can also be made, businesses need to ensure a coordinated front across all customer touchpoints.

By continuing to improve the way consumers interact with the brand, specialty retailers can make headway in developing meaningful relationships with every customer. Some common best practices for customer relationship management and experience enhancement include:

• Implementing a loyalty program
• Making interior design and display upgrades
• Offering workshops, lessons, showcases, and special events
• Collecting customer feedback and leveraging it to improve operations
• Providing ongoing training for employees, as customers depend on them for their product and service knowledge
• Implementing beacon technology such as interactive displays, personalized offers, self-checkout systems, mobile payment options, and augmented reality experiences

Optimizing Your Systems and Operations

First and foremost, ensure your business protects the precious data of your operation and customers. Implement secure, effective point-of-sale (POS) systems, which automate many tasks and free up staff to dedicate time elsewhere. Other ways to optimize your business could include:

• Update your cameras and surveillance systems
• Use smarter software to schedule efficiently
• Regularly review operational processes to see what works and what doesn’t

Handling Change and Future Planning

Specialty retail is always subject to impacts from changing market conditions, varying consumer needs, and other trends. By staying up to date with evolving consumer preferences, businesses can incorporate new products and adjust their niche (if necessary). Furthermore, specialty stores should also embrace technology and innovation to stay competitive, now and in the future.

When focusing on long-term growth and expansion opportunities, such as multiple store locations, develop a growth strategy and a timeline. The goal is to scale your operations to the desired size while maintaining consistent quality and customer experience.

How to Stay Ahead of Industry Trends

In the fast-paced world of specialty retail, staying ahead of industry trends and technology is paramount for sustainable success. With changing consumer preferences, emerging technologies, and evolving market dynamics, specialty retailers must be proactive and agile in their strategies.

• Stay updated on emerging trends by conducting ongoing market research.
• Monitor competitor strategies and customer preferences to identify shifts in the market.

Data Analytics

• Utilize data analytics to gain insights into customer behavior, preferences, and purchasing patterns.
• Leverage data-driven decision-making for inventory management and marketing strategies.

Training and Development

• Invest in ongoing training for your staff to keep them updated on industry trends and technology.
• Encourage a culture of innovation and adaptability within your organization.

Learn More About DTiQ’s Solutions

All in all, a sound specialty retail strategy focuses on loss prevention. Marketing plans should also consider the perceived disadvantages of specialty stores, from a smaller product variety to less convenience for consumers used to department stores. Specialty retail stores, whether brick-and-mortar or online, can gain trusted assistance when opting for custom solutions from DTiQ.

With experience implementing over 45,000 retail business intelligence platforms, DTiQ’s main goal is to help retailers transition to a smarter, more efficient operation. These solutions give specialty retail operators the ability to monitor their business from anywhere, thanks to an integrated mobile app. All clients are backed up by 24/7 customer support from DTiQ.

Capabilities of a customized DTiQ solution include features such as:

• Easy access to data analytics with:
• ~Conversion rates
• ~Customer demographics and data
• ~Detailed transaction information
• ~Dwell times
• ~Employee engagement statistics
• ~Guest experience and satisfaction feedback
• ~Location performance data and areas for improvement
• ~Loss prevention
• ~Pathing
• Intelligent video systems that:
• ~Detect suspicious activity
• ~Prevent theft
• Ability to identify staff training needs

Specialty Retail Guide Conclusion

Throughout this comprehensive guide, we’ve delved into the intricacies of specialty retail, from understanding your niche market to optimizing operations and leveraging technology. As owners and operators, you now possess a holistic understanding of what it takes to thrive in this industry.

At DTiQ, we specialize in empowering specialty retail operations with cutting-edge performance solutions. To see how we can help your business thrive, book a demo with us today and explore the possibilities of taking your specialty retail venture to new heights.

Exception-based reporting (EBR) is useful for retail and quick service restaurant (QSR) businesses. Effective EBR tools can support loss prevention teams and improve profit margins.

In an industry where loss prevention can significantly affect your bottom line and reduce losses, EBR is critical. A study from the National Retail Federation found that inventory shrinkage alone cost the retail industry over $61 billion annually. Learn about the value of exception-based reporting below.

What is Exception-Based Reporting?

Nearly every restaurant and retail store have a digital (POS) point-of-sale system for accepting customer payments. POS software is a rich source of business data that can identify when a POS transaction took place, which employee helped complete a transaction, and the type of payment method used.

Exception-based reporting is a process of data analysis that reviews a set of data, including a series of transactions, and identifies outliers. These outliers can be positive – perhaps one sales associate is outperforming their peers, or they can be negative, indicating that a staff member is using a POS system incorrectly or even stealing from the company.

Exception-Base Reporting Case Study

One case study of a QSR restaurant that wanted to improve its security and reduce its sales costs. By adapting DTiQs software and real-time exception-based reporting, they improve their shrinkage, improve security systems, and reduce sales costs.

The use of remote surveillance cameras to monitor the store and exception-based reporting allowed the QSR Restaurant to identify employee productivity. To the point that after DTiQ’s system was installed, this particular they were able to improve its shrinkage by fifty percent.

Benefits of EBR Systems

Even the most careful businesses can experience some level of shrinkage and internal theft. Exception-based reporting is a critical component of asset protection and a good loss prevention strategy. Businesses can use EBR for a variety of purposes:

• Identify training gaps: After reviewing transaction data, retailers may find a discrepancy is simply the result of staff error. For example, an employee might be categorizing an item incorrectly or applying a discount to an item that doesn’t qualify. With good reporting, managers can find where staff are making mistakes and re-train them to prevent future errors.
• Catch internal theft: Employee theft can be a major issue at both restaurants and shops. Staff members may abuse loyalty programs, steal from shared tips, or void transactions and pocket the difference. POS exception reporting can catch unusual activity – such as a high number of voided transactions during a specific employee’s shift.
• Improve your bottom line: Without an exception-based reporting tool, you would need to review transaction data by hand to identify mistakes and fraud. This would be a significant labor cost – and you might still miss the warning signs of internal theft. With EBR, you have access to data analytics that helps improve your profit margins.
• Enhance customer experience: Exception-based reporting loss prevention software is even more powerful when combined with intelligent video surveillance. You can monitor how employees are interacting with customers, measure engagement, track customer paths, and find areas for improvement

Take Advantage of DTiQ’s Powerful Analytics

Of course, exception-based reporting isn’t without its challenges. With so much data to sift through, many managers don’t have time to review daily reports from POS systems. This is where advanced analytics and reporting for POS data come into play.

By integrating an intelligence platform with your POS system, like DTiQ’s SmartAudit you can corroborate POS line items with employee behavior to reduce shrinkage and identify training needs. DTiQ’s exception reporting software will alert you to suspicious transactions and allows you to verify transactions through high-quality audio and video surveillance.

Learn More about DTiQ’s Solutions

DTiQ has helped plenty of other national and international establishments with our integrated video, auditing, and analytics tools. Our case studies show us how our solutions have helped establishments like Domino’s Pizza, Subway, 7-Eleven, and more.

For pricing information and more details on our customized solutions, book a demo with DTiQ today.