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.