EXCLUSIVE: Staying ahead of retail theft

Retail - preventing retail theft

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Dave Nieweg and Tim Warren at Milestone Systems discuss how video technology can be used for proactive prevention of retail theft.

Retail theft: a rising trend

Retailers across the country face staggering losses from organized retail crime (ORC), where thieves steal goods in bulk for resale on the black market.

This alarming trend is forcing retailers to get more creative and proactive in combating theft.

From advanced video analytics to product packaging with embedded GPS trackers, retailers are deploying cutting-edge technologies to better identify criminals, understand their methods and prevent future thefts.

With the help of open platform data-driven video management software (VMS), retailers can now seamlessly integrate these innovations to stay one step ahead of thieves.

The scope and impact of ORC

ORC poses a massive threat to retailers and the US economy. As incidents of retail crime and retail theft continue to escalate, retailers have seen a dramatic jump in financial losses.

The recent 2023 National Retail Security Survey released by the National Retail Federation shows that when taken as a percentage of total retail sales in 2022, shrink accounted for $112.1 billion in losses, up from $93.9 billion in 2021.

Additionally, retailers reported that ORC remains a significant concern due to heightened levels of violence.

More than two-thirds (67%) of respondents said that they saw even more violence and aggression from ORC perpetrators than a year ago.

ORC theft is not petty shoplifting — these are professional thieves stealing truckloads of merchandise for resale.

They target everything from clothes, shoes, beauty items and small electronics to larger goods like appliances, smart home devices, tools and luxury items.

Stolen goods often wind up being resold on anonymous third-party marketplaces online.

Criminals have even evolved to stealing goods to order, taking requests for specific, high-value items that fetch top dollar on the black market.

ORC and retail theft has advanced to the point where professional thieves can earn tens of thousands a month reselling pilfered goods.

ORC results in lost sales and inventory shrinkage that directly reduces a store’s revenues and profits.

When products are stolen through organized crime, it’s a double loss situation where retailers lose the revenue from those stolen goods and the profit margin they would have earned by selling them at full price.

Retailers are fighting retail theft with tech-based solutions to track criminals, prevent theft and stop stolen goods from being resold.

Video management platforms serve as a connective platform, tying these efforts together.

Matching faces without identifying people

One powerful tool for identifying potential thieves is mobile device tracking via WiFi and Bluetooth technologies.

As shoppers move through the store, their phones and devices constantly interact with WiFi access points and Bluetooth beacons placed strategically throughout the location.

Retailers can passively collect a device’s IMEI (International Mobile Equipment Identity) to detect repeat offender devices entering stores.

If a device was present during prior retail thefts, security staff are immediately alerted when that IMEI returns so they can closely monitor the individual and watch for suspicious activity using security cameras.

While privacy concerns exist, this tracking data is collected anonymously without personal details. The system tracks the device’s equipment identity, not the individual.

Anonymous facial recognition is another emerging technology, now being used in special locked “smart” cabinets to control access to high-value merchandise and prevent retail theft.

Cabinets with built-in cameras and recognition software can geometrically map a shopper’s facial features upon first use, allowing entry to the cabinet if no issues occur.

However, if the shopper has previously stolen merchandise from the cabinet, their facial map will be flagged and they will be denied access to the cabinet.

This AI-driven video technology is an effective way to bar known offenders without matching faces to identities.

Theft tracking, prevention and recovery

Once goods are stolen, retailers can use technologies to track merchandise and prevent its resale.

GPS trackers are now being embedded directly into product packaging, allowing retailers to remotely monitor the location of stolen items.

This helps identify fencing operations and storage sites used by thieves to stockpile stolen merchandise. Knowing where large inventories of stolen goods are kept provides critical intelligence for preventing black market sales and recovering the stolen property.

At exit points, some retailers are deploying forensic spray marking systems.

These devices subtly spray thieves with a solution containing a unique DNA code as they exit the store. Under UV light, the mark glows brightly for weeks.

This allows stolen merchandise to be irrefutably connected to the criminals. The hope is to deter retail theft by increasing the risk of being caught.

Advanced video analytics is another crucial retail crime prevention technology.

Algorithms can now detect tools criminals may use, like chains brought on site to rip out freestanding ATMs.

Other analytics identify suspicious behaviors like loitering and people gathering to alert staff before a potential crime occurs.

With machine learning models, these systems get better at identifying likely criminal patterns over time.

Other simple retail theft prevention solutions like shopping cart wheel locks help to deter thieves from stealing carts full of merchandise.

When an improperly scanned or unpaid item triggers an alert, the shopping cart wheels will instantly lock until the situation is corrected. This prevents rushed mass thefts via shopping carts.

Open platform video for rapid innovation

The common thread tying these innovations together is open platform VMS.

With open platform technologies, any data from security or non-security systems, as well as a vast range of speciality cameras and sensors can be ingested, processed and presented to security and management personnel from within a single system.

As retail theft and crime constantly evolves, open platform technology is an ideal solution.

When threats change, new cameras, sensors and software can be easily integrated into the video management system, allowing retailers to deploy innovations quickly and cost-effectively.

Many conditions can be detected that may indicate an imminent or evolving threat requiring a defensive response.

Someone walking against the normal traffic flow, people running or exhibiting exaggerated movements or even the visual of a gun being carried are all detectable events.

Similarly, audio sensors can detect specific noise signatures indicating arguing, violent behavior, cries for help, glass breaking or gunshots.

In addition to anti-crime and proactive security solutions in retail, data-driven VMS can connect and bring together video, audio and data from access control, people counting, point-of-sale, alarm, fire and IoT-type devices detecting everything from air quality to inventory levels.

The system can monitor numerous store conditions from an employee smoking by the dock to vagrants loitering, customers appearing lost in the aisles or even checkout lines beyond a defined wait time threshold.

Video management system alerts can be designed to meet an organization’s specific and ever-evolving needs.

With interconnected remote and mobile VMS solutions, retailers can also share their valuable, collected threat intelligence across locations.

If a known ORC ring hits a store, other stores can be immediately alerted (and applicable data shared among the locations) before they strike again.

As retail theft and crime continues to grow, the reactive, proprietary video systems of the past are no longer sufficient.

Retailers need to leverage the benefits of an entire ecosystem of solutions to rapidly respond to new threats as they emerge.

Open platform video management technologies deliver this capability.

By consolidating systems onto a single, scalable platform, retailers can continuously enhance their anti-theft and physical security effectiveness — enabling the rapid deployment of tech innovations to stay a step ahead of organized retail criminals.

About the authors

Dave Nieweg is Community & Vertical Sales, Program Owner, Americas at Milestone Systems and has been at the company for nearly six years.

Previously, he worked in an outside sales role covering the Rocky Mountain territory.

Dave has spent most of his career in the video surveillance and physical security industry in a wide variety of sales, marketing and product development roles.

Tim Warren is Community Technical Manager, Americas at Milestone Systems.

In this role, he leverages his background in management, troubleshooting, audio engineering, sales and security to provide technical guidance and support to the Milestone community in the Americas region.

Tim holds a Bachelor of Applied Science in Environmental Science from the University of California, Los Angeles.

This article on executive protection was originally published in the December edition of Security Journal Americas. To read your FREE digital edition, click here.

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