Shrinkage costs retail industry more than $100 billion

Inventory Management

The price of goods has been on the rise for the past few years, ranging from food and drink to clothing and electronics. Retailers, food companies and consumer product good manufacturers have all been forced to raise their prices as a result of cost pressures.

While higher good costs come with numerous implications for the sector, one effect felt by the industry as a whole has been the increase of theft. Business Day Live reported the cost of global retail industry shrinkage has grown to $128 billion as of 2014, a sharp uptick over the years since the Global Retail Theft Barometer first started assessing the issue back in 2001.

With the cost of goods on the rise, people are stealing not only out of necessity, but also simply because goods can often be sold for a profit. Products such as razor blades, vitamins, clothing and cosmetics are not only easy to pilfer, but can also be off loaded quickly for a profit. Even retail employees themselves, who often know how stores work and can act above suspicion, are guilty of this.

To make matters even more complicated, there are numerous avenues crooks can use to steal goods – they don’t always just walk out the front door with products under their coat. For instance, they could be fabricating coupons that give them significant discounts on high-value items that look completely legitimate to the unsuspecting cashier.

Utilizing eCommerce software to combat shrink

It is no easy task to eliminate theft. In many cases, organized crime rings devote a lot of time in executing their ploys, whereas retailers can only spend so much time on loss prevention – they have other priorities, such as serving their customers and executing marketing initiatives.

Shopping cart software can be used to track and identify which coupons are being used and where.

However, one effective first step is making better use of eCommerce software that will help merchants maintain control of their stock and identify potential issues in advance. For example, shopping cart software can be used to track and identify which coupons are being used and where, which allows retailers to flag potential abuse.

Customer management tools can be utilized to identify instances of return fraud. If merchants see specific shoppers are going to different locations and returning products or abusing return policies, sellers can keep a closer eye on these individuals and craft a course of action. This allows them to offer customer-friendly policies while minimizing the potential for abuse.

The right solutions will give sellers an in-depth view of precisely where stock is located, whether it is in a warehouse or on a store shelf in a brick-and-mortar shop.

Finally, better inventory management and tracking tools can make keeping track of goods that much easier. The right solutions will give sellers an in-depth view of precisely where stock is located, whether it is in a warehouse or on a store shelf in a brick-and-mortar shop. Additionally, tools such as RFID make tracking much easier and eliminate the possibility of human error.

Shrink is a big problem for the retail industry, but by utilizing the right eCommerce solutions, merchants can keep this issue under wrap.

Leave a Reply

Your email address will not be published. Required fields are marked *