A recent survey by the Brazilian Association for Loss Prevention (Abrappe) pointed out a concerning fact in the country: the growth of losses in retail. The average rate in 2023 reached the historic mark of 1.57%, which in values represents around R$ 35 billion (in 2022 it had been 1.48%), considering sales of the restricted retail. A fortune in currency that, if ranked among the companies with the highest revenue growth in the country, would be in the top 100 list, as indicated by Econodata. In other words, it’s a lot of money going down the drain, often almost uncontrollably, for retailers.
If it’s any consolation, it’s worth noting that the same Abrappe survey shows that among the retail participants in the study, 95.83% have a loss prevention area. A sign that the culture of loss prevention is indeed gaining ground in corporations, albeit slowly. But the rate has fortunately been high in recent times (above 90% at least), which certainly doesn’t happen among small and even medium companies.
Having a dedicated area for loss prevention in the company is essential for various reasons that directly impact the financial and operational health of the retailers. It is responsible, for example, for reducing financial losses, protecting inventory, improving operational efficiency, reducing operational costs, ensuring the safety of employees and customers, and enhancing the brand’s reputation. In summary, a well-structured loss prevention area not only protects the store’s assets but also contributes to a more efficient, secure, and profitable operation.
But in the last ten years, losses in retail have undergone a significant evolution, driven by changes in consumer behavior and the technology available for loss prevention and management. Here are some of the main transformations observed:
- Technological advancements: Technology has played a crucial role in transforming retail losses. More sophisticated surveillance systems, such as high-definition cameras and AI-based video analytics, allow for more effective in-store monitoring, identification of suspicious behaviors, and theft prevention.
- RFID and inventory management: The adoption of technologies like RFID (Radio Frequency Identification) has become more common in retail, enabling more precise and efficient inventory management. This not only reduces losses due to inventory errors but also improves product availability for customers.
- Integration of security systems: There has been a growing trend in integrating different security systems, such as cameras, alarms, sensors, and access controls. This integrated approach not only enhances incident detection but also optimizes the response to security events.
- Data analysis and artificial intelligence: The ability to analyze large volumes of transaction data, customer behaviors, and purchase patterns has allowed retailers to better identify risk areas and implement more effective loss prevention strategies. AI algorithms are also used to predict potential threats and frauds.
- Focus on customer experience: While strengthening security, retail has increasingly focused on improving the customer experience. This involves finding security solutions that do not compromise the convenience or satisfaction of the customer during the purchasing process.
- E-commerce Challenges: With the growth of e-commerce, retailers face new challenges regarding losses, such as online frauds and managing returns. Adapting loss prevention strategies to the digital environment has become essential for many companies.
In summary, the transformation of retail losses in the last decade has been marked by significant technological advances, a more integrated and proactive approach to security, and a greater emphasis on data analysis and customer experience. What lies ahead is still unknown, but some international fairs, such as NRF in the United States and Euroshop in Germany, always give us some clues (the theme of artificial intelligence was a constant at the most recent meetings).
One thing is certain: these changes are expected to continue shaping how retailers address and mitigate losses in their businesses, always seeking continuous improvements and adaptation to new market realities. If this response is not quick and assertive, they are likely to encounter problems. And that is definitely something nobody wants!!!
