Shrink cost the retail industry more than USD112 billion globally in 2012, representing an average 1.4 percent of retail sales, according to a study of merchandise availability solutions provider Checkpoint Systems last year.
As shoplifting, employee theft, organized retail crime are on the rise across the world, retailers are keen to invest in effective and proven loss prevention methods, collaborating with technology companies and specialists for loss management solutions to diminish these shrink problems. The study revealed that retailers with particularly strong investments in loss prevention typically reported shrink rates well below the respective country average.
Mark Gentle, Vice President – Merchandise Availability Solutions Asia-Pacific of Checkpoint Systems, tells Retail in Asia the latest findings of their study on the state of shrink and theft for the global retail industry, and the retail solutions Checkpoint showcased in Retail Asia Expo last month to help retailers to combat shrink and improve merchandise availability.
RIA: Checkpoint has been doing annual research study on the state of shrink and theft for over 12 years, what are your findings in the latest study?
Mark Gentle (MG): The Global Retail Theft Barometer is an annual study of the cost of merchandise theft and merchandise availability for the global retail industry.
The findings are eye opening and important: Shrink remains a significant operational challenge for retailers around the world with loss rates ranging from 1 percent of sales in Japan to 1.6 percent in Mexico and Brazil. In the world’s largest retail market, the United States, shrink hit 1.5 percent of sales.
But the study also points out that retailers are deploying new tactics in dealing with shrink, becoming more creative and innovative in using their existing resources. Additionally, the study identified Radio Frequency Identification (RFID) as an important technology for loss prevention applications. Many retailers already have begun implementing RFID both for merchandise visibility applications and for shrink reduction – the two key aspects to optimized merchandise availability.
RIA: Which region in Asia-Pacific has the highest shrink rates, which region has the lowest shrink rates? Why?
MG: The country with the highest shrink rates in Asia-Pacific is China, with a shrinkage rate of 1.5 percent compared to Japan’s 1 percent. The economic crisis was attributed as a major reason for increasing shrinkage rates. As a growing share of the population struggles to meet its financial obligations, the occurrence of shoplifting and employee theft is reportedly on the rise.
RIA: You launched EVOLVE Exclusive F10, a shrink management solution for luxury and high-end retailers last year, can you tell us more about this product?
MG: The EVOLVE Exclusive F10 is an entirely invisible EAS solution that is designed for retailers whose stores require a completely discreet EAS solution without sacrificing performance. It is perfect for flagship stores where luxury brands want to provide a seamless and attractive shopping environment where the product is the focus. The EVOLVE Exclusive F10 is installed during the store construction process and offers maximum detection and reliability for in-store protection, while remaining completely invisible.
RIA: Can you give us an example about how your retail client utilises the solution in-store?
MG: The retailers want to be able to use all the product protection devices available from protecting product at source to in store protection for high end products. In parallel the retailers were after a solution that showcased the store frontage without compromising product protection, the F10 exceeded these outcomes.
RIA: You attended Retail Asia Expo in 2012 and joined the exhibition again this year, what’s new about the products you showcased this year?
MG: This year, we displayed iMAP integrated with those innovative products like Overhead v2., Hyperguard, Alpha, showsafe ,etc. at Retail Asia Expo. iMAP represents how we build, deploy and support innovative, technology-based solutions to help retailers reduce shrink, reduce time to shelf and improve inventory management. The iMAP solution set is purpose-build for retail, combining hardware, software, consumables, services, and business processes to address retailers’ merchandise availability needs.
RIA: What operational challenges are Asian retailers facing nowadays? How is Checkpoint assisting retailers to manage these challenges?
MG: For retailers, the most important factor to keep a shopper happy and coming back to their stores is to have the right product, at the right place, at the right time. Namely it’s "merchandise availability".
Considering the challenges retailers face today, firstly they are trying to attract shoppers with their merchandise (new, cools, low price, exclusive, stylish, etc) and provide a pleasant shopping experience.
They do this through product presentation, store displays, open merchandising, etc – but they still have to protect the merchandise from theft. And, they also try to keep low prices by keeping their operational costs low.
Checkpoint’s current product portfolio, and our product roadmaps, places us in a very good position to deliver solutions that will help the retailer improve their merchandise availability. Our brand promise to the retailers is simple: improve your merchandise availability and you will improve your customer’s shopping experience.
We work with the retailers to understand their requirements and the current pain points. From this initial analysis we will develop a solution that minimizes shrinkage and ensures an effective operation that helps deliver an increase in sales by having the right products available for the consumer.
Find out more at Checkpoint Systems.
Mark Gentle is the Vice President – Merchandise Availability Solutions Asia Pacific with Checkpoint Systems.
Checkpoint Systems is a global leader in merchandise availability solutions for the retail industry. Over the past 12 years Mark has held numerous roles with Checkpoint in Europe, Asia Pacific and Australia. Mark has extensive international experience in sales, manufacturing, project management, and change implementation.
Mark has qualifications in Electrical Engineering and an MBA from the Southern Cross University.
(Source: Retail in Asia)