Retail shrink totaled nearly $62B in 2019 #SmallBiz - The Entrepreneurial Way with A.I.


Friday, July 17, 2020

Retail shrink totaled nearly $62B in 2019 #SmallBiz

Dive Brief:

  • Retail shrink in 2019 reached $61.7 billion, up from $50.6 billion in 2018, according to the "National Retail Security Survey" by the National Retail Federation (NRF). Seven in 10 survey respondents reported a shrink rate of more than 1%. 

  • Per the report, 29% of respondents indicated that e-commerce crime was a risk or threat that has become much more of a priority during the past five years, followed by organized retail crime (27.5%) and cyber-related incidents including data breaches (27.5%).  

  • The report also found that over 52% of respondents are allocating technology resources to address risks this year, down from nearly 56% from the year before. Staff resource allocation is also down to 26% in 2020 from nearly 29% in 2019. 

Dive Insight:

According to the NRF's previous research, retail shrinkage totaled $46.8 billion in 2017, indicating that retail's shrink problem has continued to grow over the past few years. 

"Between an increase in incidents and new ways to steal, shrink is at an all-time high," NRF vice president for research development and industry analysis Mark Mathews said in a statement. "Loss prevention experts are facing unprecedented challenges from individual shoplifters to organized gangs to highly skilled cybercriminals. Retailers are responding with both traditional methods and the latest technology, but this is an ongoing challenge that can only be won with the support of lawmakers and law enforcement."

While 49% of respondents stated that the largest jump in fraud happened in stores, 26% stated the increase happened with online sales, and nearly 19% reported it occurring with multichannel sales including buy online, pick up in-store. 

According to the NRF's 2020 report, 27.5% of respondents said organized retail crime has become much more of a priority for them over the past five years. In December 2019, another study by the NRF found that 97% of retailers said organized retail crime had impacted their business.

Per the Sensormatic Global Shrink Index from Tyco Retail Solutions and PlanetRetail RNG, inventory loss due to shoplifting, employee theft or other errors cost retailers $100 billion internationally in 2017.

via by Tatiana Walk-Morris, Khareem Sudlow