While flashy topics like organized retail crime may be stealing headlines in the loss prevention world, internal loss is still a massive challenge for retailers, and it continues to evolve and grow. Post-COVID trends like higher employee turnover and BOPIS have added even more opportunities for theft.
“The typical sales-reducing activities (refunds, voids, discounts) are still prevalent for retailers, and with the high turnover and difficult employment environment, there are continually new employees cycling through these organizations and presenting opportunities for dishonesty to occur,” said Scott Pethuyne, senior analytics solution consultant for Zebra Technologies. “Additionally, with the increasing complexity of the retail environment in areas such as payment apps, BOPIS, and other processes focused on enhancing the customer experience, employees remain crafty in thinking of ways to cheat the system and LP teams are constantly trying to stay one step ahead.”
And with economic uncertainty looming, Pethuyne predicts employees’ motivation to steal will persist.
“I don’t see any evidence that [internal loss] is shrinking, but I do think that perhaps the external theft threat has stolen some of the spotlight,” Pethuyne said. “This makes sense, since the external theft is highly visible, often carries an employee and customer safety concern, and frequently makes national headlines. However, we’re hearing from customers that internal loss is still something they are looking for solutions to address, and there doesn’t seem to be any societal or economic indicators that would point to employees facing fewer challenges in their personal lives. Because of that, I’d wager the internal loss concern is either the same as it has been, or perhaps increasing with the recent shift of focus to external theft.”
Often even more difficult to control than crafty employees is non-malicious internal loss.
“If we think about a retail operation, it makes intuitive sense that in a given day there are far more employee errors that can cause loss than there are theft incidents,” Pethuyne continued. “These errors can be things like accidentally voiding an item off a transaction but still giving it to the customer, discarding damages without processing them systematically, and many more, but traditionally it has been outside the LP purview, bandwidth capacity, or both. Our customers are finding that these non-malicious losses are significantly impacting profitability, but the right technology is necessary to efficiently tackle the challenge.”
The growing presence of third-party services like Instacart, Doordash, and Uber Eats are also presenting new obstacles for retailers as there is product leaving the store without the actual customer being present, opening up new opportunities for loss via the third-party employees directly, or through collusion with store employees.
Inventory counts, however, can serve as a multi-pronged solution for retailers dealing with these issues by providing:
- Increased Perception of Control: When employees know the inventory is frequently counted and well-tracked, they become less likely to engage in dishonesty because they feel they are less likely to get away with it.
- Better Inventory Accuracy: With frequent, efficient inventory counts, the retailer has a good grasp on their inventory position throughout the store. This accuracy means that when something goes wrong—either malicious or non-malicious—it is more obvious and can be identified more quickly, leading to a fast resolution before the problem grows.
- Better Process: With an inventory counting process that gives real-time visibility, highly configurable auditing, and detailed variance reconciliation, the actual count itself is much more likely to be accurate and less prone to errors or manipulation.
Zebra promises all of this and more with its advanced solutions:
- Workcloud Inventory Visibility: Zebra offers retailers the ability to count inventory using the best technology and the best people to take the counts—their employees. Zebra supplies retailers with the devices they need to take the inventory; they can use the Zebra devices already in their stores, or a combination of the two. Zebra also facilitates full, wall-to-wall inventory counts or more frequent cycle counting of certain products or categories. The solution features a robust dashboarding and reporting suite, allowing the retailer better visibility and control over the inventory process, while ensuring they are executing an accurate and efficient count.
- Workcloud Actionable Intelligence: Zebra enables retailers to leverage advanced analytics and exception monitoring on not just their point-of-sale transaction data, but their inventory data as well. The ability to analyze inventory data on an ongoing basis allows retailers to quickly identify out-of-stocks, inventory accuracy, issues with damages and waste, and much more. Specifically in the area of inventory counting, the data from any inventory count can immediately be fed into Actionable Intelligence, allowing the retailer to automatically analyze the counts for anomalies and trigger actions for resolution.
- RFID: Zebra is a leader in RFID tagging and reading technology. RFID is becoming increasingly prominent, with retailers both tagging their own sourced product and leveraging tags that are applied at the point of manufacture by external vendors. Zebra’s RFID technology enables retailers to count inventory quickly and frequently, giving incredible visibility to on-hand levels as well as a rich dataset that can be used in combination with Actionable Intelligence to automate insights and corrective actions.
And that’s not all. Zebra invests significantly in research and development, and according to Pethuyne, the solutions that help address internal loss are no exception. Some of their recent and upcoming innovations include:
- Cycle Counting: This provides the ability to count what you need, when you need to count it. Often times cycle counting processes can be manual, difficult, and cumbersome. Zebra Workcloud Inventory Visibility now offers an easy-to-implement and easy-to-use cycle counting capability that allows retailers to gain better and more frequent insights into their inventory throughout the year.
- Actionable Intelligence Analytics Studio: Within the Actionable Intelligence solution, a new Analytics Studio interface called Canvas makes it easier than ever for analysts to build multi-stem queries that get directly to the root of the behavior they are trying to identify. Canvas can tie together different data sets that typically are hard to combine, can look across multiple windows of time for specific activity, and all of that can be automated so the solution does the work from that point forward.
- Continued Implementation of AI Features: Across multiple solutions, Zebra is looking for ways to integrate AI that will help improve the user experience and make employees’ lives easier. In the 2023 Zebra Global Shopper Survey, 83 percent of associates said they feel more valued by their employer when they provide technology tools to help them work. More valued and happier employees are much less likely to cause loss, whether intentional or not.
“As a global recognized technology leader, Zebra is committed to helping LP professionals tackle the challenges that are most important to them, and we know that internal loss is one of those challenges,” Pethuyne concluded. “The breadth of Zebra’s offerings—from mobile computers, to RFID, to software solutions—uniquely position Zebra to design solutions that make our customers’ lives easier and help them achieve success.”
Learn more about how Zebra can help manage internal loss at zebra.com.
Attending NRF PROTECT? To see these solutions in action, come visit Zebra at Booth #617 for a personalized demo. Zebra experts will show you how you can achieve your inventory goals and tackle internal loss effectively. Whether it’s enhancing inventory accuracy, improving process efficiencies, or leveraging AI and RFID for actionable insights, Zebra has the tools to transform your business operations. The Zebra team looks forward to seeing you there!