As US retail gears up and gets back to business, theft prevention is set to again become a major priority.

Although statistics indicate theft events were down throughout 2020 due to store closures, of the events that did occur, the value of the amount stolen was higher, and stores deemed essential actually experienced a shoplifting increase.

Which begs the question, where is your retail theft occurring?

Because once you know where your risk is, you can devise the best strategies to mitigate loss.

The four major types of retail theft

Shoplifting

Shoplifting is often the theft issue that gets the most attention, and there’s good reason this is the case.

Shoplifting continues to be the number one cause of retail loss, with both amateurs and professional thieves contributing to the problem.

On the flipside, shoplifting is also one of the easiest problems to address, but it is imperative to have a multi-pronged approach that protects the store overall and items at a product-based level.

The top shoplifting prevention strategies include:

• Good store layout and lighting.

• Staff education and training.

• Electronic article surveillance involving security tags, security labels and pedestal antenna.

• CCTV.

• Loss prevention staff

Employee theft

Employee theft is a bit of a hidden epidemic, but the reality is each incident of employee theft costs a retailer more than general shoplifting.

That’s because employee theft often takes longer to identify and can take the form of false returns, gift card fraud, skimming or false reconciliation of inventory.

In fact, the 33rd Annual Retail Theft Survey by Jack L Hayes International found each incident involving a dishonest employee averaged $1219.61, which was up 3.8 per cent in 2020.

The top employee theft prevention strategies include:

• Screening of all prospective employees.

• Staff training.

• A good work environment with fair remuneration.

• Staff monitoring through CCTV and POS analytics.

Fraud

Fraud is becoming an increasing problem in retail theft, with perpetrators becoming more elaborate in their scams.

Some of the most common ways that fraud is committed to involve return fraud, credit card fraud, and gift card fraud.

Meanwhile, fraud is also an issue behind the scenes in terms of supplier fraud.

The best ways to mitigate the risk of fraud include:

• Returns and gift card policies and procedures.

• Staff training.

• POS analytics.

• Payment’s security.

• Inventory reconciliation upon receipt of goods.

Organized retail crime

One of the biggest scourges of the modern retail landscape is organized retail crime, which sees a group of thieves deliberately target a retailer to steal items in volume.

Organized retail crime is incredibly costly to retailers. The National Retail Federation notes Organized Retail Crime cost retailers an average of $719,548 per $1 billion in sales in 2020.

Perhaps more concerning is that organized retail crime is often accompanied by violence, with the NRF’s Organized Retail Crime Survey 2020 finding the majority of retailers reported thefts involved more violence in 2020 than they did in 2019.

Combatting organized retail crime involves:

• Training staff to identify the suspicious behaviour that can indicate an organized retail crime event is about to take place.

• Storewide security such as CCTV and loss prevention personnel.

• Electronic Article Surveillance.

• Secure cabinets and lockable drawers.

• Good store layout that prevents easy smash and grab events

The final word

In the coming months, retailers will be looking to make up for the lost ground of 2020, and that means the focus should return to theft prevention.

After all, increased foot traffic equals an increased risk of shoplifting, employee theft, fraud and organized retail crime.

You can find more resources for protecting your store against each here.

With retail on the rebound after the challenge of 2020, the concept of retail theft might be the furthest thing from store owners’ minds.

But, as retailers seek to embrace the return of foot traffic in-store, preventing loss should remain a major priority.

With that in mind, here are 10 retail theft statistics to keep you focussed on the battle at hand…

Retail theft at an all-time high

A significant portion of retail’s bottom line

The all-time high figure from 2019 equates to 1.62 per cent of retail’s annual bottom line, compared to 1.38 per cent in 2018.

Shrink rate rising

This industry’s high shrink value in 2019 was driven by an increase in the average shrink rate, with more and more retailers recording a shrink rate above 3 per cent.

The report found in 2019, 18.2 per cent of retailers reported a shrink rate of 3 per cent or higher (compared to just 10.9 per cent in 2018).

Covid saw shoplifting incidents down, but value up

With Covid lockdowns seeing much of the retail sector closed temporarily during 2020, there were fewer reported thefts, according to the 33rd Annual Retail Theft Survey by Jack L Hayes International.

Last year, shoplifting apprehensions were down 43.8 per cent and recovery dollars decreased 36.5 per cent.

However, the value of each incident increased. In 2020, shoplifting averaged $310.11, which was an increase of 13 per cent the year prior.

Dishonest employees remain a major issue

Like shoplifting, events involving dishonest employees decreased during the shutdowns of 2020.

In total, 26,463 dishonest employees were apprehended, according to the 33rd Annual Retail Theft Survey, but the value of each event was higher.

Last year each employee theft averaged $1219.61 (up 3.8 per cent in 2020).

Essential retail experiences a theft increase

While shutdowns reduced the opportunity for dishonest employee theft and shoplifting, the essential retailers that were open throughout 2020 experienced an increase in theft.

In essential retail, shoplifting rose 7.9 per cent while employee theft also rose 2.7 per cent.

Theft recovery costs money

For every $1 recovered by companies surveyed by Jack L Hayes International, $33.15 was lost to retail theft.

Therefore, only 2.9 per cent of total retail theft losses resulted in recovery.

Increased theft concern

The most recent National Retail Security Survey also found retailers were increasingly concerned about a number of loss trends emerging in-store.

The report noted in the past five years:

• 29 per cent of retailers viewed e-commerce crime as much more of a priority.

• 5 per cent saw organized retail crime as much more of a priority.

• 5 per cent viewed data breaches as much more of a priority.

• 3 per cent had been increasingly focussed on internal theft.

• 3 per cent viewed return fraud as much more of a priority.

Organized Retail Crime on the up

According to the Organized Retail Crime Survey 2020 by the National Retail Federation, Organized Retail Crime cost retailers an average of $719,548 per $1 billion in sales, which was up from $703,320 in 2019.

Greater aggression during thefts

The Organized Retail Crime Survey 2020 also noted the majority of retailers reported thefts involved more violence in 2020 than they did in 2019.

Almost a third of respondents (31 per cent) said perpetrators were much more aggressive, 26 per cent said they were somewhat more aggressive, 41 per cent reported the aggression was the same as the year prior and just two per cent said perpetrators were less aggressive.

You can read about strategies to combat shoplifting and retail loss here. Or, view our security tags and security labels.

The data is in and while reported incidents of shoplifting and employee theft declined in 2020, the value of each incident increased.

According to the 33^rd Annual Retail Theft Survey by Jack L Hayes International, over 184,000 shoplifters and dishonest employee were apprehended in 2020 by just 22 large retailers. In total over $81 million was recovered.

Here’s a breakdown of what the survey showed…

Fewer shoplifting incidents

Incident value increased

While the number of shoplifting and theft incidents was down, the value of each event increased significantly.

In terms of total thefts, each event averaged $440.48, which was up 19.2 per cent on the year prior.

Meanwhile, shoplifting averaged $310.11, which was an increase of 13 per cent and each employee theft averaged $1,219.61 (up 3.8 per cent in 2020).

The true cost of theft

The survey also took the time to dive a little deeper into how much was lost compared to how much was recovered.

“For every $1 recovered by our surveyed companies, $33.15 was lost to retail theft. Therefore, only 2.9% of total retail theft losses resulted in recovery,” they noted.

This figure is based on the assumption that annual retail sales of the participating companies were $508 billion and the average shrink rate was 1.62 per cent of sales according to the 2020 National Retail Security Survey.

The reasons behind shoplifting increases and decreases

Those stores which experienced a shoplifting increase cited the following reasons:

• ORC (Organized Retail Crime) continues to be a primary factor.
• fewer stores to choose/steal from.
• Saw significant increase in “theft for need”.
• Legislation increasing felony thresholds embolden thieves.
• More ‘hit n run’/fleeing shoplifters.

Meanwhile, those that noted a decrease in incidents attributed it to the following:

• Store closures resulted in fewer shoppers.
• Transition to deterrence/recovery during the pandemic.
• Closing of fitting rooms for extended periods of time.
• Focused on better customer service.
• Less LP/AP staff due to restructuring or transition.

The reasons behind employee theft increases or decreases

In terms of employee theft, retailers which experienced an increase attributed it to the following:

• More focus/attention towards associate theft.
• Improved technology/analytic tools resulted in more DE cases.
• Fewer associates in-store created more opportunities for dishonest employees.
• Increase in loyalty card fraud.
• Increase in discount abuse cases.

Those who enjoyed a decrease cited the reasons listed below:

• Store closures and furloughed associates.
• Less focus on apprehensions and more focus on pandemic issues.
• Better prevention with additional technology at POS.
• Reduced travel by LP/AP staff.
• Decrease in LP/AP staff due to restructuring or transition

You can find the full Annual Retail Theft Survey here, or see our top tips on loss prevention.

In a retail landscape where the consumer experience is designed to be frictionless and omnichannel is par for the course, returns are emerging as a major challenge for retailers.

Not only does handling returns cost a retailer time and money, but returned merchandise also presents a fraud liability and as Retail Dive recently noted, has a very real environmental impact as well.

Here’s an insight into the challenge that retailers now face when it comes to managing returns.

The returns reality

A fraud liability

Returns have always offered the potential for fraudulent activity, and as the NRF explains, last year was no different.

Of the returns made last year, they found roughly 5.9 per cent, or $25.3 billion worth, were fraudulent.

In online retail this percentage rose, with 7.7 per cent of returns to online retailers labelled fraudulent.

Ultimately that means for every $100 in returned merchandise accepted, retailers lose $5.90 to return fraud.

The hidden cost

When it comes to handling returns, it costs a retailer time and money, but often this isn’t measured.

There’s the cost of serving the customer as they make the return, then there’s the time involved with inspecting the packaging, and sending it back through the supply chain to get it back on the shelf (if indeed that’s where it is to end up).

Retail Dive recently argued measuring the cost of returns properly could improve the retailer’s bottom line.

They note most often, retailers look at their sales but do not look at returns, with the major reason being that data is often siloed throughout an organization.

Environmental issue

In addition to costing the retailer, Retail Dive also notes returns take a very real environmental toll, and in the future that could well impact the customer’s perception of an organization’s sustainability.

Many customers believe they make a return and it’s simply placed back on the store’s shelf or repackaged and resold online.

Often, that’s not the case. The item is instead directed to a landfill or destroyed, with around five billion pounds of goods ending up in landfill annually.

Then there’s also the further environmental cost of the transportation required to handle returned goods.

So, what’s the answer?

Finding a solution to the return challenge

Handling returns properly lies in retailers having a deep understanding of the process, its cost and its impact.

There should be policies in place instore to minimize fraudulent claims, while each retailer should be mapping exactly what happens in the returns process.

Then, Retail Dive argues it could be time to investigate new models that are designed to minimize the environmental impact and improve the retail bottom line.

You can read the recent Retail Dive article on sustainable returns here, or view the strategies available to reduce return fraud here.

The list of the top global retailers in 2021 has been released, with the impacts of COVID-19 altering the results compared to previous years.

Although big US names like Walmart and Amazon continue to reign supreme, new entrants also grace this year’s top 10 as online retailers with massive merchandise volumes make their presence felt.

Here’s an insight into the top 10 global retailers for 2021, along with changes occurring in the top player landscape.

This year’s results

No 1 – Walmart (USA)

Retail type: Mass/hyper
Total revenue: $519.93 billion

Walmart’s omnichannel shift continued to pay off throughout 2020, with an expansion into marketplaces and services seeing it retain pole position, despite the fact the company shed assets in several countries.

Kantar notes Walmart’s lead has shrunk this year, although the next top 50 will likely see it retain its top position.

No 2 – Amazon.com (USA)

Retail type: Ecommerce
Total revenue: $280.52 billion

Amazon’s continued expansion over the past year was evident in the company’s results, with core markets like the US, Canada and Europe also performing well.

No 3 – Schwarz Group (Germany)

Retail type: Discount grocery
Total revenue: $133.89 billion

Kantar notes Schwarz’s grocery formats dominate retail in Europe, but as a privately held retailer, it has previously missed the global list rankings.

In recent times its discount banner Lidl has seen the company enjoy growth in markets like the US, while its online operations within existing markets have also enjoyed significant growth.

No 4 – Aldi (Germany)

Retail type: Discount grocery
Total revenue: $116.06 billion

Building on its success in Central Europe, Aldi is now also one of the fastest-growing retailers in the US. The retailer is also expanding into markets like China, which has seen it jump from No 8 on the global retailer list last year to No 4 in 2021.

No 5 – Alibaba (China)

Retail type: Ecommerce
Total revenue: $71.99 billion

Alibaba has enjoyed rapid expansion in recent years, transforming from a business-to-business retail model into an ecommerce giant who also has a foothold into physical stores, courtesy of Hema and Freshippo.

Kantar notes its purchase of Auchan RT-Mart’s operations in China “made it effectively the largest physical retailer in the market”.

No 6 – Costco (USA)

Retail type: Club
Total revenue: $163.22 billion

Offering a very different retail model to others on the list, Costco has been steadily expanding outside the US into places like Canada (where it recently became the second biggest retailer), Australia and Europe.

“Having finally moved into ecommerce, it is positioned for fast growth in existing markets with its unique value proposition,” Kantar says.

No 7 – Ahold Delhaize (Netherlands)

Retail type: Grocery
Total revenue: $78.17 billion

Courtesy of a strong in-store experience and best-in-class online grocery capabilities, Ahold Delhaize has recently refreshed its image and is enjoying significant growth in both Europe and the US.

No 8 – Carrefour (France)

Retail type: Mass/hyper
Total revenue: $82.60 billion

Carrefour’s recent growth has centred around additional franchises in regions like the Middle East and Africa.

“The Latin American ‘atacado’ format continues to be the retailer’s largest growth engine as smaller express stores expand in all of its existing markets,” Kantor explains.

No 9 – IKEA (Netherlands)

Retail type: Furniture
Total revenue: $45.18 billion

With its highly unique model, IKEA has firmly cemented its position as the largest furniture retailer in the world.

In addition to its existing presence, it is now expanding into Latin America.

No 10 – JD.com (China)

Retail type: Ecommerce
Total revenue: $82.86 billion

Kantar explains “JD.com continues to surprise even the jaded Chinese market” through its rapid diversification and growth.

Its strengths lie in its operational competence and customer service, along with its strategic partnerships with retailers, including minority owner Walmart.

You can read the full list of Kantar’s top 50 global retailers here, or compare it to the results from last year.

A new report has defined five key areas bricks and mortar retailers can focus on in a bid to improve the bottom line as the COVID recovery for the retail sector increases in momentum.

Artificial Intelligence company Olvin recently released their ‘Retail Statistics, Trends, and Forecasts For 2021’, noting there is exciting opportunity for real-world retail in the years ahead, but only if they capitalise on lessons learned in 2020.

Here’s an insight into what they found…

The fallout from 2020

The road ahead

The retail sector rebounded over the holiday season with record spending also extending into Valentine’s Day and Easter.

That said, Olvin notes around 40 per cent of Americans don’t expect their finances to return to normal until late 2021 or even 2022 and beyond.

Despite this, there is a widespread sense of optimism in the recovery of the economy. Forty-one per cent of people in the US said they were optimistic about the economic future.

And, as a result, 12,200 stores have revised their plans to close.

But how can retailers maximise that optimism and translate it to the opportunity ahead?

Bricks and mortar potential

Olvin said despite a tough 2020, there is hope for the future of real-world retail based on the recent resurgence in both sales and optimism.

But they note it will centre around four key trends emerging post-COVID.

A focus on the consumer

More than ever before, the customer experience will be critical in the months ahead.

“Knowing your customers might be one of the first rules of retail, but after setting up, many businesses lose sight of what their customers want…,” Olvin said.

Ethical activity

The conscious consumer has steadily been shaping retail in recent years. The period ahead sees this trend likely to strengthen.

“The increase in the amount of information that is available about companies means that consumers are also becoming increasingly conscious of the power their purchases have,” Olvin said.

“Customers are not only choosing the products they buy much more consciously, but they are also deciding which businesses they are prepared to buy from much more carefully too.”

Cost-cutting

The retail bottom line is increasingly becoming the differentiator between the stores that thrive and those who fail to survive. And shoring up this bottom line through cost-cutting is essential.

“To remain competitive, retailers are likely to be cutting their costs significantly in 2021 – and will need to do so while keeping the right balance with their ethical credentials,” Olvin noted.

Creative use of space

The traditional bricks and mortar could well be a thing of the past, with retailers reconsidering exactly how they utilise their physical real estate.

That’s seeing an increase in alternative uses of retail space, whether it’s a dispatch outlet, an immersive experience, coffee outlets, or in-store recycling facilities.

The final word

When it comes to where people intend to purchase their Easter-related items, discount stores are the most popular choice, with 43 per cent of survey respondents noting they intended to shop there.

Discount stores are followed by:

• Department stores – 35 per cent.

• Online – 35 per cent (the highest percentage in the survey’s history and up from 28 per cent last year).

• Specialty stores – 23 per cent.

• Small businesses or local stores – 23 per cent.

Meanwhile, as vaccination rates increase, celebrations are also on the rise.

A year after COVID plunged the US retail sector into chaos, Easter 2021 is expected to see the highest spending on record, according to the National Retail Federation.

On March 24, the NRF released the findings of their annual Easter survey, noting consumers are predicted to spend $21.6 billion collectively.

Here’s what else they anticipate will occur in retail this Easter…

Many to celebrate

Higher than previous years

If the forecast turns out to be accurate, this year’s Easter spending will be the highest on record.

The NRF’s data indicates, while lower than predicted, consumers last year spent $175.85 each, and this year’s spending is tipped to see each fork out $3.95 more.

Prior to last year, the previous record was $151.90 in 2017, and before that, it was $145.28 in 2012.

What people will buy

The NRF notes Easter gifts, food and candy are the biggest drivers of growth this year.

Their data indicates consumers plan to spend an average of:

• $31.06 on gifts (up from $27.91 in 2020).

• $52.50 on food (up from $51.76).

• $25.22 on candy (up from $23.30).

Where people will shop

When it comes to where people intend to purchase their Easter-related items, discount stores are the most popular choice, with 43 per cent of survey respondents noting they intended to shop there.

Discount stores are followed by:

• Department stores – 35 per cent.

• Online – 35 per cent (the highest percentage in the survey’s history and up from 28 per cent last year).

• Specialty stores – 23 per cent.

• Small businesses or local stores – 23 per cent.

Meanwhile, as vaccination rates increase, celebrations are also on the rise.

How people will celebrate

After a year in which many people self-isolated, Easter sees them looking to spend time with family and friends in accordance with CDC guidelines.

The NRF notes:

• 59 per cent of consumers plan to mark the holiday by cooking a holiday meal.

• 43 per cent are looking to visit with family and friends.

• 43 per cent will spend the holiday watching TV.

• 31 per cent are planning an Easter egg hunt.

• 28 per cent intend to go to church.

“However, not everyone is ready to resume in-person activities,” the NRF states, “with 22 per cent indicating they will attend church virtually and 24 per cent saying they will connect with their loved ones by phone or video.”

Follows a bumper Christmas

The expected record spending this Easter follows a bumper festive season. Final numbers indicate holiday spending for 2020 was well above expected, with $789.4 billion injected into the retail economy.

That figure was 8.3 per cent above the same period in 2019 and was more than double the 3.5 per cent average holiday increase over the previous five years, including 2019’s 4 per cent gain.

You can learn more about the trends emerging in retail here, or see our security tags and security labels for all the latest products to protect items in-store.