ROI Analysis

Leverage RFID for Loss Prevention

LP Manager: Allocate Your Resources Better Using RFID Data

June 3 2021

According to our annual State of Retail Loss Prevention Report, 45% of Loss Prevention (LP) and Asset Protection (AP) teams are operating with fewer staff and resources. This is in stark contrast with the findings of the National Retail Security Survey, stating that ‘the impact of shrinkage on the retail industry continues to be sizeable.’

LP/AP managers have been dealt an unfavorable hand: carrying out more tasks and activities, with fewer resources, resulting in competing priorities.

Take Back Control

LP Managers want to take back control of their overflowing to-do lists. To regain control, LP managers don’t have to chase ‘the next big thing’. Instead, they can find a longtime helper already present in their stores: Electronic Article Surveillance.

EAS plays a big role in the ‘doing more, with less’ situation that LP managers find themselves in, but this role might be overlooked by some LP managers. EAS systems have been a steady helper in preventing losses, yet some LP managers might be thinking that their EAS system have had their moment to shine and won’t help them progress further.

One of the reasons for this ‘EAS fatigue’ is the number of alarms generated by an EAS system. On top of their already overflowing to-do list, LP managers don’t have time to review all alarms, let alone make sure every alarm isn’t a false alarm and check that true theft events are addressed correctly. Admittedly, it can be hard to find the needle in the haystack of alarms. Fortunately, there is a way to eliminate the noise and focus on the things that matter.

Eliminating The Noise

Just like any technology, EAS needs to adapt to the current circumstances and expectations. For EAS in apparel and fashion retail, these expectations are clear: enable seamless shopping experiences, without any shrinkage. The most successful way to achieve this is by using RFID technology. RFID has already proven its value in apparel and fashion retail - stock accuracy, omnichannel enablement and better replenishment are common drivers for RFID adoption. But the business case of RFID in retail keeps expanding, most notably to loss prevention.

When an RIFD label, attached to an item, leaves your store, the item level data gets captured. This means that you can now know that three t-shirts left your store Friday afternoon at 3:00 PM – one of those not being paid for. Now imagine having a stream of item-level data at your fingertips: knowing exactly when and which items are leaving which stores unpaid. RFID offers LP/AP managers a whole new arsenal of measures to fight theft, prevent losses and doing more – with less. 

Data Is a Means to an End

Of course, blindly gathering more data for the sake of capturing data is not the way to go if you want to take back control. It’s important to keep in mind that data is a means to end: data leads to insights, which in turn help you make better decisions as an LP manager. That is what RFID for loss prevention is all about: allocating time, resources, and thinking to the things that matter most.

So what are areas where RFID can help you allocate resources better?

There are two ways to approach your loss prevention strategy in a data driven way:

  1. acting on theft events right when they occur; or
  2. choosing a more long-term approach in preventing losses.

Let’s discuss both strategies – and how RFID enables both immediate as well as long term actions.

Catch the Data, Catch the Thief

Traditionally, an EAS system had just one way of warning when a theft event occurs: flashing lights and screeching sounds. It goes without saying that this is still the case when using RFID technology in your EAS setup, but with RFID there are more ways to act on a theft event when it happens.

Because we now know which items triggered the alarm, we can use this data in multiple ways. In addition to alarms, we can send notifications to people if (suspected) theft events occur. For example, we can send a notification to store associates. Not only will a store associate hear the alarms go off, she’ll also receive a notification on her mobile device, telling her exactly which item at which entrance set off the alarm. We call this “turning a loss into a sale”: the store associate checks with the customer and asks if something might have gone wrong when paying for their items.

And these notifications are not limited to store staff. In case of professional, large-scale ORC attacks, you can notify neighboring stores in case of such events. This way, stores can prepare themselves and you prevent future ORC events from happening.  

And it’s not just actual theft events that you can spot. It’s also suspicious events: items leaving your stores after opening hours, or the same items leaving your store in bulk.

Finding Patterns

All these tactics work for catching thieves, in the here and now. But wouldn’t it be more effective to prevent thefts from even happening?

Armed with the data of tens of thousands of items leaving your stores, you gain insights that might have been impossible to see before. Insights that lead to better decision making, and therefore a better allocation of resources.

With all the events captured by your EAS, you will start seeing patterns.

Which stores have a higher risk of theft events (‘hot’ stores)? And on which days of the week, and at which times? Which items are getting stolen more often? And is it possible to apply hard tags on only these items, saving costs on hard tags and improving the customer experience?  

LP/AP managers currently answer these questions based on a gut-feeling and year-old inventory data. But RFID takes out the guesswork, answering these questions with facts and data. With indispensable insights like these, it becomes easier to optimize your floor plan, staff, guard planning, and training protocols.

As machine learning and artificial intelligence algorithms advance, you can start to make predictions about how thieves operate. The level of predictive planning will only become more effective – making the data you collect even more valuable over time.