A loss prevention definition, at its most basic level, states that loss prevention is about preventing losses and shrink, and enhancing the profitability of retail companies. However, the loss prevention definition that many professionals would offer has grown increasingly complicated as various functions, philosophies, tasks, and responsibilities are debated by the LP community.
Rapid changes in retail, enabled by new technologies, mean that the way consumers shop, the products they buy, and even the way they pay for goods and services are all changing in ways that never would have been expected just a few years ago.
Technology is driving trends in areas such as mobile POS, emerging selling concepts, and business analytics. Intelligent CCTV systems with analytics technology will continue to have a bearing on how LP performs in the stores, but will take on additional value as part of other retail applications. Use of data and predictive indicators, cloud computing, and business intelligence will enhance processes as well as investigations.
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Many also believe that RFID technology will finally take on a bigger role in effectively managing inventories, from original purchase or manufacture until it ends up in a customer’s hands. This may also expand the role of LP into areas that until now were considered non-traditional, such as energy savings, SKU rationalization, accident reduction, and business continuity.
The emergence of omni-channel retailing as a growth driver will have a substantial impact on the role of loss prevention. As described by one industry leader, “As the retail industry continues to consolidate, increase in complexity, and expand omni-channel solutions, the role of LP will change significantly.” Omni-channel retailing will enable customers to purchase what they want, when they want it, and decide how they want to pay for it and have it delivered.
The move toward the infinite store is creating new areas that need to be secured, such as networks and customer data. LP professionals are increasingly being asked to bring their specific skills into areas where they never participated before, causing a shift in responsibilities.
For example, the dual role of increased data and analytics will create a shift in thinking that will change many roles in retail, including LP, which will work more closely with IT departments going forward. Thus a loss prevention definition in the near future will also include an expanded, more proactive leadership role to ensure data is secured and properly managed, because data breaches cost companies in many ways beyond the immediate financial losses, to include litigation, brand protection issues, and additional sales impact.
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Don’t be left behind as the LP industry evolves! Get our FREE Special Report, Retail Loss Prevention Secrets from the Experts right now!