The LP Psychologist

Integrating Psychological and Technological Approaches for Effective ORC Prevention

Organized retail crime (ORC) is a growing challenge for retailers, according to approximately 86 percent of LP executives and professionals surveyed at the 2023 NRF Protect Conference in Texas. To bolster LP’s perspective on this overarching risk, this inaugural column examines the differences between psychological and technological approaches to ORC prevention—highlighting the strengths and limitations of each. The strategic goal is for LP to embrace the human side and the technological side of this game‑changing risk, and not rely too much on one approach.

Psychological Approaches to ORC Prevention

Psychological approaches to ORC prevention focus on the human element, emphasizing the role of employee behavior, motivation, and organizational culture in preventing ORC incidents. This section will discuss four key strategies within the psychological approach: organizational culture alignment, employee recruitment and selection, training and development, and performance management.

Organizational Culture Alignment. Creating a strong organizational culture prioritizing security, vigilance, and collaboration with LP is crucial for effective ORC prevention. Retailers should promote open communication and encourage employees to report suspicious activities or potential threats, fostering a sense of shared responsibility for maintaining a safe retail environment. In addition, retailers should engage employees in developing and implementing ORC prevention policies and procedures. By involving employees in the decision-making process, retailers can ensure their LP strategies align with the needs and challenges of their workforces.

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Employee Recruitment and Selection. The foundation of an effective ORC prevention strategy lies in hiring the right employees. Retailers must ensure they recruit and retain individuals with high integrity, ethical standards, and a strong sense of responsibility. These employees must also possess a low propensity for collusion. By hiring employees who are committed to maintaining a safe and secure retail environment, retailers can significantly reduce the risk of ORC. Background checks, reference checks, and behavioral interviews can help retailers identify candidates with strong moral values and a history of ethical behavior. However, retailers should also consider incorporating risk and talent assessments into their selection process, as these tools can provide valuable psychological insights into a candidate’s trustworthiness, potential for collusion, and overall suitability for a position as an associate, team leader, supervisor, or manager.

Training and Development. Once retailers have recruited employees with strong ethical standards and low collusion risk, they must provide them with the necessary knowledge, skills, and abilities to identify and respond to ORC threats effectively. This includes comprehensive training on LP policies and procedures, as well as development programs to keep employees up to date on ORC trends and tactics. In addition to formal training, retailers should foster a culture of continuous learning and development around LP topics, encouraging employees to share their experiences and insights with colleagues. This collaborative approach can help employees stay vigilant and maintain their skills, ultimately enhancing and sustaining the effectiveness of ORC prevention efforts.

Performance Management. To ensure employees remain engaged and committed to ORC prevention, retailers must establish clear performance metrics and incentives for LP activities. This includes setting expectations for employee behavior, monitoring their adherence to LP policies and procedures, and providing regular feedback on their performance. Recognizing and rewarding employees who contribute to ORC prevention can also help to reinforce the importance of LP.

By offering incentives such as bonuses, promotions, or other recognition, retailers can motivate their employees to remain vigilant and take initiative in their efforts to prevent ORC.

Comparing Psychological and Technological Approaches

Technological approaches to ORC prevention might leverage innovative technology to detect, prevent, and mitigate the impact of ORC incidents. The five key technological approaches are well known and include the following: surveillance technologies, data analytics, artificial intelligence, access control and authentication, and inventory management systems.

Surveillance Technologies. Surveillance technologies, such as closed-circuit television (CCTV), smart cameras, and radio frequency identification (RFID), play a critical role in ORC prevention by enabling retailers to monitor and detect ORC activities in real-time. Advanced surveillance tools, such as video analytics and facial recognition software, can further enhance retailers’ ability to identify potential threats and respond quickly to ORC incidents. While surveillance technologies are highly effective in ORC prevention, they must be balanced with privacy concerns and legal compliance. Retailers should ensure their use of surveillance technologies is transparent, proportionate, and in line with applicable laws and regulations.

Data Analytics. Data analytics, machine learning, and pattern recognition techniques can help retailers identify, predict, and prevent potential ORC threats. By integrating and analyzing data from sources, such as point-of-sale systems, inventory management systems, and surveillance technologies, retailers can gain a comprehensive understanding of their ORC risk profile and develop targeted LP strategies. Data-driven insights can also inform decision-making processes related to employee recruitment and selection, training and development, and performance management, further enhancing the effectiveness of retailers’ ORC prevention efforts.

Artificial Intelligence. Artificial intelligence (AI) has the potential to revolutionize ORC prevention by automating processes, improving the accuracy of predictions, and enhancing the speed of response to ORC incidents. AI‑powered solutions, such as machine learning algorithms and computer vision technologies, can help retailers detect and analyze ORC activities more efficiently, enabling them to take proactive measures to protect their assets. However, the use of AI in ORC prevention also raises ethical considerations and potential biases. Retailers should carefully evaluate the implications of AI-driven LP solutions and ensure they are transparent, fair, and accountable.

Access Control and Authentication. Access control systems and biometric authentication technologies can help retailers protect sensitive information and assets from unauthorized access, a key component of ORC prevention. By implementing sophisticated access control solutions, such as biometric scanners, smart locks, and encryption technologies, retailers can secure their facilities and reduce the risk of ORC. Ensuring employee adherence to access control policies and procedures is also critical for maintaining a secure retail environment.

Inventory Management Systems. Automated inventory management systems, Internet of Things (IoT) devices, and RFID technology can significantly improve retailers’ ability to track and monitor stock levels, enabling real‑time visibility and enhanced LP capabilities. By detecting discrepancies in inventory records, these technologies can help retailers identify potential ORC activities and take action to prevent losses. In addition to their LP benefits, automated inventory management systems can improve the efficiency and accuracy of inventory management processes, leading to cost savings and increased operational effectiveness.

ORC Mitigation with Psychological and Technological Strategies

Table 1 compares the key features of psychological and technological approaches to ORC prevention, highlighting the strengths and limitations of each. LP professionals increasingly rely on technological approaches, but they cannot overlook the psychological element.

Guidelines for Collaboration Among LP, HR, and IT Executives

To develop a comprehensive and effective ORC prevention strategy, LP executives must work closely with HR and IT executives. This is especially true for getting LP’s needs met with the company’s personnel recruitment and selection strategy that must address talent procurement and risk management needs. This section provides guidelines for fostering collaboration among these key stakeholders.

Establishing Cross-Functional Teams. Forming cross-functional teams consisting of LP, HR, and IT professionals can facilitate collaboration and streamline decision-making. These teams should have defined roles and responsibilities for each member, ensuring all stakeholders have a voice in developing and implementing ORC prevention strategies.

Engaging in Regular Meetings and Strategy Sessions. Meetings and strategy sessions can help stakeholders stay informed about progress, challenges, and opportunities related to ORC prevention. These gatherings provide a forum for sharing insights, best practices, and emerging trends across departments, enhancing the effectiveness of LP efforts.

Developing Integrated ORC Prevention Strategies. By combining psychological and technological approaches to ORC prevention, retailers can create a comprehensive LP plan addressing human and technological factors. Cross-functional teams should evaluate the effectiveness of existing strategies and adjust based on data-driven insights and evolving circumstances.

Establish Incentives for Cross-Functional Teams. Combining the expertise of LP, HR, and IT professionals can lead to more effective ORC prevention strategies that can be measured and shared incentives can be established. A safer retail environment for employees and customers can be documented. A culture of collaboration and shared responsibility for ORC prevention can also boost employee engagement and morale, which can be assessed. By working to develop, implement, and refine LP strategies, these stakeholders can help retailers stay ahead of emerging trends, while maintaining a proactive approach to ORC prevention.

ORC is a growing challenge for the retail industry, necessitating a comprehensive and multifaceted approach to LP. By integrating psychological and technological strategies, retailers can develop a robust ORC prevention plan addressing human and technological factors. By promoting collaboration and integrating psychological and technological approaches, retail organizations can combat ORC, protecting their assets, employees, and customers in the process.

John Jones
John Jones

John W. Jones, PhD, is the Executive Vice President of Research & Development at FifthTheory, LLC ( Dr. Jones is a Licensed Psychologist in Illinois who serves as FifthTheory’s principal thought leader in the research, development, and delivery of personnel risk and talent management assessment solutions. Dr. Jones has more than 30 years of experience in loss prevention psychology, he received his PhD in applied psychology from DePaul University, and holds an MBA from the Keller Graduate School of Management. His current areas of research include the psychology of workplace violence and incivility, employee theft and collusion, on-the-job illicit drug use, trauma-informed leadership, and service excellence. Dr. Jones was the founding editor of the Journal of Business and Psychology.

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