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Gain 4 Levels of Visibility to Counter the Growing Impact of Shrink — Today

Gaining insights into shrink at events at every stage — from supply chain to storefront — is an opportunity for retailers today. Here’s why. 

The concept of shrink isn’t new, but the problem is growing — and so are the obstacles to preventing it. Shrink costs retailers nearly $100 billion USD per year, and according to the National Retail Federation (NRF), losses outside of traditional stores are becoming more prevalent. In fact, NRF’s pre-pandemic survey found that just under half of shrink incidents (49 percent) happened in stores, while 26 percent happened online, and 19 percent happened via omnichannel sales. 

While the pandemic made in-store shrink more difficult for would-be shoplifters, retailers have rapidly reopened and have experienced expanded areas of shrink. Employee, e-commerce, and returns fraud, meanwhile, is expected to increase as economic pressures put greater strain on workers’ finances. 

- Digital Partner -

In other words, retailers need holistic, integrated loss prevention systems that range from the supply chain to storefronts more than ever. That’s exactly what Sensormatic IQ from Sensormatic Solutions offers. 

The Need for Enterprise-Wide Loss Prevention Solutions 

There are two pressing trends in loss prevention today,” explained Craig Szklany, Sensormatic Solutions VP of global solutions management and marketing. “The first is a desire to capture insights on where shrink is really coming from. Is it vendor fraud, employee theft, shoplifting, or organized retail crime? 

Craig Szklany
Craig Szklany

The second is identify the loss,” continued Szklany. “In other words, to know which items were taken and understand where to direct mitigation efforts.”

The impact of the loss goes beyond just the theft of an item. It also leads to missed selling opportunities, because the item is no longer on the sales floor or available for fulfilling a BOPIS (buy-online, pick-up-in-store) commitment. When a shopper wants that item, a retailer can’t deliver it because they simply don’t know it’s gone. If they did, they could rapidly restock it and avoid the lost sale. 

While COVID-19 might have temporarily reduced traditional shrink, the rapid pivot to omnichannel retail illuminated the need for solutions that deliver complete, enterprise-wide visibility into every aspect of shrink. 

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Sensormatic IQ: An Intelligent Operating Platform for Retail   

To empower retailers with solutions to shrink at every level, Sensormatic Solutions now offers shrink visibility throughout the enterprise via radio frequency identification (RFID) enabled storefront systems and item-level electronic product code (EPC) data combined with Sensormatic IQ predictive analytics and insights. Shrink visibility offers real-time understanding of what items go missing, along with when, where, and how many items are gone. EPC item-level inventory data and loss prevention events are integrated with retailer and partner ecosystem data that leverages advanced cloud‑computing technologies for a clearer view of shrink.  

Together, these data points become predictive insights as part of an enterprise-wide shrink view, allowing retailers to forecast and remediate areas of significant shrink at every stage, from source-to-store — and everywhere in between. 

These solutions provide item-level visibility into how many were lost, what was lost, when it was lost, and the value of what was lost,” Szklany explained. 

With the availability of smart sensors, IoT infrastructure, and other external applications, retailers have more data at their fingertips than ever before  —no matter where they are in the digital transformation process. Sensormatic IQ integrates diverse data streams under a single platform umbrella, making it easy for retailers to act on intelligent, data-driven outcomes and generate the predictive and prescriptive insights needed to fast-forward retail. 

- Digital Partner -

4 Levels of Visibility Into Shrink 

Sensormatic IQ delivers visibility into every layer of shrink throughout the retail enterprise. “Most retailers have some form of EAS at their storefront or the ability to alert when losses happen at the exits,” Szklany said. “But few of these systems are connected to broader, enterprise-wide loss prevention solutions. A lot of systems today can tell you something left the premises without being paid for, but not what that item was, how many items were taken, or how much the loss cost you.” However, he added that RFID-based exit solutions enable “storefront visibility,” providing the item-level insights needed to proactively reduce shrink. 

The next level is item-level visibility at the sales floor level, allowing retailers to identify high-theft items, and which zones are more at-risk for shrink events or show vulnerabilities for organized retail crime. “RFID technology enables true item-level visibility, where retailers can really pinpoint where theft is occurring, at the category and zone level, and can take proactive measures to mitigate in high-theft areas,” he said. 

Then there’s “transaction visibility,” where RFID is integrated at the point of sale to mitigate employee fraud and “sweethearting.” Scanning RFID-tagged merchandise as part of the checkout process ensures that only the item purchased leaves the store without exit systems alarming. 

Lastly, there’s “receiving visibility,” which is the ability to assess whether products that were ordered were accurately received. “That’s where vendor fraud or vendor error can be mitigated,” Szklany explained. “When a supplier ships the wrong product or a different quantity of product than what was ordered, whether intentionally or accidentally, it still has an impact on selling opportunities and the shopper experience.” 

It’s clear that an integrated, enterprise-wide loss protection system that delivered visibility into each layer of shrink is needed. But none has existed — until now. 

RFID Overhead 360° 

With so much at stake — and with so much visibility needed — Sensormatic Solutions has introduced RFID Overhead 360°, an RFID-powered storefront solution that delivers visibility into inventory and shrink-level analytics. It’s a discreet alternative to traditional EAS pedestals while providing wide exit coverage in a smaller footprint. 

Sensormatic Solutions’ RFID Overhead
360° delivers visibility into inventory and
shrink level analytics. This overhead solution
is a discreet alternative to traditional EAS
pedestals while providing wide exit coverage in
a smaller footprint.

Because RFID is an enabling technology in our exit systems at the storefront, it provides a level of detail that most retailers don’t have when they think about shrink,” said Szklany. “They know they have losses, but they often don’t know the item-level details for losses. Sensormatic IQ, along with RFID-enabled exit systems at the storefront, can do exactly that. And our RFID Overhead 360° is the latest solution in our portfolio.” 

RFID Overhead 360° is a fully scalable system capable of providing traditional loss prevention as well as EPC item-level inventory intelligence.  

When combined with TrueVUE Inventory Intelligence and RFID tags — both of which leverage the power of RFID and the cloud to deliver a single, connected view of item-level shrink across the enterprise — RFID Overhead 360° and the entire suite of solutions powered by Sensormatic IQ give retailers the holistic visibility they need to monitor and mitigate shrink at every level.  

The History — and Future — of Loss Prevention Solutions 

Our over 50-year legacy of loss prevention and store performance solutions provide optimal protection and deliver valuable insights to help solve retail’s biggest challenges,” Szklany said. “We’ve built our leadership reputation by consistently delivering innovative, high-quality solutions designed to better manage shrink, inventories, shopper activity, and staffing to improve operations and boost profitability.” 

And while that may be the essential backstory, what Szklany has in mind is the future. “The Sensormatic IQ flexible and open operating platform can incorporate insights from edge devices, such as POS, sensors, EAS, RFID, computer vision, and more — capable of delivering AI predictive and prescriptive models to help retailers find an enterprise-wide shrink view,” he said.  

Szklany added, “It’s not just for one store or one region. It’s genuinely enterprise-wide shrink intelligence that drives predictive, shrink-related business directives at the category, brand, and store level. It’s truly the future of loss prevention. And the future is here today.” 


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