–Contributed by Vivin Wason

Losses in retail through shoplifting prove to be hazardous for retailers as it results in a pure loss for the organization. The people involved in this activity could vary from the actual thieves, to the organizers, diverters and the sales personnel who get the merchandise back out to the market.

 

Looking at the extent to which shoplifting has grown in the past, with the shoplifters graduated from a group of thrill seeking teenagers and drug addicts supporting a habit to a network of well trained individuals whose sole purpose is to shoplift in large quantities for profit. A similar trend is catching up in India. As the figures suggest the Indian retail industry suffered a total loss of staggering Rs 9,691 cr due to shoplifting and waste in 2007. A study found that the average shrinkage rate (stock loss from crime or waste expressed as a percentage of retail sales) for India is 2.90 per cent of sales.

 

The report goes on to say that alcohol, cosmetics, women's clothing, perfumes and expensive gourmet specialty foods are the top targets of shoplifters. The countries with the highest shrinkage rates were India, Thailand, and the US, while Austria, Switzerland and Iceland boasted the lowest rates.

The ability to track losses at the SKU level during inventory periods will help determine if a specific item is being targeted.

 

Though, according to the same report, the good news for the Indian organised retail market is suggests that Indian shrinkage rate has actually fallen down from 3.20 per cent in 2006.

 

Yet the losses incurred due to such activities cannot be ignored and hence the following steps could be important for any retailer who is looking at cutting costs caused due to theft and pilferage

·         Employee training

·         Education and awareness

·         Strong operational controls

·         Development and testing of the on-the-floor customer service practices of your employees

·         Physical security measures to raise the deterrence level.

 

Organized Retail Crime may be more frequent or our awareness of the issue may have increased, either way it makes sense to stay informed and think proactively.