Report • 02.11.2015

Complete spectrum of security technology for retail

EHI study reveals: € 3.9 billion inventory losses in German retail

For retail as a whole, inventory discrepancies rated at retail prices total €...
For retail as a whole, inventory discrepancies rated at retail prices total € 3.9 billion.
Source: Checkpoint Systems GmbH
Shop lifting continues to be the No. 1 cause of inventory discrepancies – this is also evidenced by the current study of the EHI Retail Institute “Inventurdifferenzen 2015” (Inventory Discrepancies 2015). Retailers have to invest heavily to protect their goods against loss. This is also reflected by EuroCIS 2016, The Leading Trade Fair for Retail Technology, held from 23 to 25 February 2016 in Düsseldorf, where many of the over 300 international exhibitors present security technology specifically for retailers.

One striking insight from the EHI study is that the so-called aggravated theft has increased by 240% over the past seven years while simple shoplifting figures have stagnated.

Aggravated theft always means offences involving a greater criminal element because, for example, loss-prevention systems are tricked. Add to this a clearly perceivable increase in organised crime that is often detected but which only leads to prosecutions in the rarest of cases.

Comparing 2014 with 2013 inventory discrepancies have slightly fallen among the companies polled but have remained almost unchanged for German retail as whole when extrapolated by sector.

Axis focuses on integrated, smart video systems.
Axis focuses on integrated, smart video systems.
Source: Axis Communications
Inventory Losses: € 3.9 billion

For retail as a whole, inventory discrepancies rated at retail prices total € 3.9 billion. Retail experts estimate that shoplifting by shoppers accounts for some € 2.1 billion. Almost € 900 million are attributed to retailers’ own staff while slightly more than € 300 million of annual losses are accounted for by suppliers as well as service staff. Statistically speaking, every German citizen takes to “unpaid self-service” of goods worth € 26 in retail every year. For food retail this means about 1 in 200 shopping carts passes the check-out counter unpaid for.

Every single year German retailers invest to the tune of € 1.3 billion in loss prevention and article surveillance measures in order to protect their goods against theft. This means, total spending on inventory discrepancies and their avoidance amounts to approximately € 5.2 billion annually.

In 2014 reported cases of shoplifting rose again – for the first time in years – by 2.6% to a total of 365,373, according to crime statistics. However, the steady decline in reported shoplifting cases over the past few years scarcely reflected the actual truth. Retailers’ assessments of the crime situation have been and still are in contradiction with these statistics. Due to the high number of unreported cases of over 98% the statistics are of limited validity only. Comparing the average damage caused by reported thefts with the actual damage caused to retailers we see that every day over 85,000 instances of shoplifting of goods worth € 80 remain undetected!

Organised Crime on the Rise

In this context retailers are particularly worried about the increase in organised crime. According to Germany’s Federal Criminal Police Office, the damage caused by gangs and other professional criminals now exceeds € 500; in value terms this accounts for a quarter of all cases of shoplifting! Often these perpetrators are only viewed and treated as simple shoplifters.

Article surveillance is also a big topic.
Article surveillance is also a big topic.
Source: beta-web/Stöter
Retail continues Investing in Article Surveillance

On average, retailers spend slightly over 0.3 % of turnover on surveillance measures. However, the technical possibilities available are far from being fully exploited. Commenting on this, Ralph Siegfried, Business Development Manager Retail at Axis Communications, said: “The challenge for retailers lies in the integration of the well-established mostly stand-alone solutions rather than in furnishing the individual stores with surveillance technology. Here plenty of synergies are lost, which are so important in the security sphere in order to properly assess the situation as a whole and to act correspondingly. Often CCTV and access control as well as burglar alarms are operated independently from each other making processes and procedures unnecessarily complicated.”

Security management solutions are also on display.
Security management solutions are also on display.
Source: Checkpoint Systems GmbH
An extremely “touchy” point in security matters is cash handling. Closed-loop cash management solutions offer not one but several benefits here: “They make an important contribution to the safety of cash – from payment through back-office operations to logistics – to protect retailers against attempted fraud involving forged money and to avoid cash-register discrepancies. Our experience shows that the automation of payment transactions and cash management pay off in more than one ways: check-out discrepancies are a thing of the past, a bad atmosphere among sales staff is prevented, customer service is improved and the complete cash logistics in view of planning, security and costs are improved,” explains Hagen Höhl, Head of Retail Europe, Glory Global Solutions.

Constant training and awareness-raising for sales staff remain important prevention measures. By contrast, MIS data analysis and cash register slip analysis of theft-prone articles and of weak points are well developed and established in most companies. Mystery shopping, however, is very popular again – as a rule in conjunction with follow-up staff training. Simon Rappold, Marketing Retail Systems at Wanzl Metallwarenfabrik, points to an often neglected aspect: “One of the biggest challenges in retail is to implement the maximum security measures possible without interfering with honest shoppers’ usual shopping habits.”  

An extremely “touchy” point in security matters is cash handling....
An extremely “touchy” point in security matters is cash handling.
Source: Glory Global Solutions
Retail Security has a Name: EuroCIS

The EHI Study proves very impressively that the need for information and the demand for innovative security solutions remain unabated – a fact that EuroCIS 2016, Europe’s Leading Trade Fair for Retail Technology, takes into account. From 23 to 25 February visitors can obtain a comprehensive overview of today’s and tomorrow’s security technology applications – from electronic and RFID-controlled article surveillance systems and access control to smart loss prevention software, not forgetting electronic shopping cart systems, digital video surveillance and secure cash handling. See some of the examples:

Axis focuses on integrated, smart video systems. Furthermore, the company wants to increasingly present solutions for small and medium-sized systems with a view to SME retailers at EuroCIS 2016. In addition to standard article surveillance systems Wanzl will showcase solutions combined with electronic access control. The highlight of Glory’s presentation at the forthcoming EuroCIS will be the safe cash management solution Cashinfinity, which comprises three components: one bank note and coin recycler for the outlet’s front and back office as well as cash management software that makes for the central monitoring and control of all cash processes in the outlets via Internet browser. Tyco will launch the new, integrated article surveillance platform “Synergy” from its Sensormatic brand, several solutions for improved inventory transparency and security base on RFID and exhibit the latest solutions from its TrueVue brand.

Source: Messe Düsseldorf

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