The decade of the 2010s saw a remarkable amount of innovation in the loss prevention and asset protection space. Numerous LP teams found themselves asked to do “more with less,” including increasing productivity with the same resources. Various technology solutions emerged to help labor-strapped LP teams do so, and we will continue to see their adoption throughout the next decade. Here are some specific topics that will be important for asset protection teams to consider going into this new decade.
The Rise of Analytics
Analytics in retail is nothing new. What we saw in the 2010s was a shift in the type of analytics retailers turned to. The traditional analytics go-to for retailers was the report-based solution, such as exception-based reporting (EBR). Each report could be hundreds of pages long, requiring manual interpretation by a human to extract insights and decide how to act on them in a timely manner. Retailers rapidly came to realize that such solutions were lowering productivity, not increasing it, and began showing more interest in newer artificial intelligence- and machine learning-powered solutions like prescriptive analytics. This methodology interprets data automatically and distributes any opportunities for improvement to the appropriate stakeholder with easy-to-understand action steps dictating a response. The addition of prescriptive actions limits the number of reports to just the ones that are absolutely necessary. This creates a newly expedited workflow that empowers LP teams to address potential issues in near-real time, before losses increase. Expect this momentum to continue into 2020 and well beyond.
More Focus on Frictionless Shopping
Success in retail is all about innovation, and we have seen retailers invest significant resources into next-generation frictionless checkout. The best-known example of frictionless checkout is self-checkout, but the retail industry is also making strides towards brick-and-mortar environments that are completely checkout-free. An example of this might be a store at which a customer scans a credit card upon entry and is automatically charged for the items she leaves the store with, based on visual scanning and other technology. Does that sound like a source of significant risk? It is. That’s why, as retailers continue to strive towards a truly frictionless checkout, we expect them to refocus their LP teams’ efforts into mitigating the associated risk. Frictionless checkout is often made possible with a combination of ceiling cameras, artificial intelligence, shelf sensors, and machine learning—all of which LP teams can leverage to identify fraud and other consequences of increased risk. We will see this refocusing of responsibilities occur outside retail, in such venues as malls, sports stadiums, gas stations, and more.
Focus on Omnichannel Gaps
An integral omnichannel strategy is a must for retail success, especially given the rise of buy- online, pick-up-in-store options, in-store fulfillments, and other cross-channel activities. Retailers need to sync their e-commerce and brick-and-mortar operations to achieve omnichannel excellence. Omnichannel retail is a vastly complex business, and many retailers have operational bottlenecks, communication lapses, and lack of visibility between channels. If these gaps are not understood (and by extension, not addressed) by leadership, they will become breeding grounds for total retail loss in its many forms. We expect that progressively more LP resources will be shifted to focus on closing these gaps, by leveraging advanced analytics solutions like prescriptive analytics.
In 2020 and beyond, we will see the role of loss prevention and asset protection continue to evolve beyond shrink and fraud and take a more analytical and strategic approach to mitigate risk and improve profits.
Guy Yehiav is the general manager and vice president of Zebra Analytics and former CEO of Profitect.