History shows evidence of a link between slow economies and crime. Are your stores prepared to save precious profit?
In his contribution to this year's Annual Resource Guide To Loss Prevention, Gus Downing takes a holistic view of the state of the retail community in light of the economic issues the nation has faced of late. He brings up some interesting points about the impact of recession on the $41.6 billion problem we know as retail shrink.
To be sure, there has been much academic debate about the impact of recession on crime rates. Some evidence suggests an increase in crime will correlate directly with a recession. Statistics from the FBI show a noticeable increase in violent crime — specifically holdups — in 1973, 1980, 1981, 1990, and 2001. These all are years in which at least middle-to-lower-class Americans struggled through markedly tough economic times, regardless of your definition of recession. Will the current economic downturn lead to an increase in retail crime? Logic would suggest a certain causal relationship between deprivation and stealing, and I believe this logic lies at the root of the argument that bad economies and lost jobs will result in more retail theft.
How LP Pros Should Respond
While the knee-jerk reaction to a potential bump in retail crime might be 'spend more on security,' that's a difficult proposition for retailers who are feeling the budgetary pinch themselves. But vigilance is key in times like these, and loss prevention departments must not forget their roles as profit margin protectors. That's where technology investment comes in.
Recent advances in security technologies have yielded multifunctional applications that provide business intelligence to disciplines far beyond loss prevention. Take, for instance, the intelligent video solutions you'll find on these pages, which not only apply intelligence to the task of deterring and catching crime, but also help marketers and merchandisers understand what works and what doesn't in terms of store and product presentation. You'll also see software solutions that not only call out exceptions and manage cases, but also provide intelligent direction to make your operation run better.
As organized retail crime and credit fraud schemes become more sophisticated — and in the face of recession you can bet they will — retailers must turn to solutions such as those found in the pages of this Annual Resource Guide To Loss Prevention if they're going to engage in the $41.6 billion battle against retail shrink. Winning some of those billions back would be key to surviving a recession and helping our country pull out of one.