Why must businesses invest in loss prevention?
Prevention is better than cure - this has never been more evident than in the past couple of years when public health management had become a crisis of epic proportions. The same mantra applies to the business landscape too. Businesses look for innovative ways to eliminate losses or, at the least, try to minimise them.
Why effective retail loss prevention strategies are indispensable?
Loss prevention is a vast topic, but we are looking at it from a retail business point of view at the moment. Most often, retail businesses suffer losses via ‘shrinkage’ due to human error or deliberately malicious intent — both on the physical retail front and on the digital front.*
Such discrepancies between your physical inventory and book inventory can have a direct negative impact on your bottom line, damage your sales figures, and dent customer relationships. And these reasons, individually or collectively, call for effective loss prevention methods and strategies.
Not having a solid loss prevention strategy is no longer an option because the kind and magnitude of damage it can cause to your business is unthinkable.
Hands-on approach to reduce inventory shrinkage
Retail loss prevention starts with understanding the various types of shrinkages - both internal and external - and the events contributing to retail losses. This includes incidents such as:
Organised retail crime
Internal theft (employee theft, fraudulent gift cards, or cash skimming)
Administrative errors (incorrect paperwork, accounting, or data entries)
Vendor or supplier fraud
To minimise such incidents, it is imperative that retail businesses stay on top of planning, arrangement, monitoring, and security. Let’s take a look at some critical retail loss prevention best practices:
- Invest in new technologies
- Improve security and surveillance
- Focus on employee hiring and training
- Be in control of your vendor alliance
Retail and e-commerce fraud solutions can reduce false positives by up to 50% and enable greater returns in terms of potential savings. Digital solutions that blend advanced artificial intelligence (AI) and analytics can help identify patterns and point out gaps in your loss prevention strategy.
Installing high-quality surveillance cameras, visible monitoring signage, POS terminals with advanced security features, and tag-and-exit sensors can help prevent theft and fraud. Your employees, too, can participate in this effort to beef up security through proper training.
Simply relying on ‘qualified-for-the-job’ candidates isn’t enough. Retailers ought to filter candidates based on criminal history, honesty, integrity, attitude, and decision-making abilities in addition to their on-paper credentials specific to the job. Conducting frequent training to create awareness about how the store or business can prevent loss is also essential.
Preventing vendor fraud is also key to successful inventory control. Eliminate preventable loss by being wary of fraudulent checks, inflated bills, and illegitimate vendors. Conducting a thorough background check for legitimacy before onboarding any new supplier is non-negotiable.
Saving money, minimising losses, and delivering a remarkable customer experience is possible if you have the right mix of people, processes, and technology. Without them, retail businesses will continue to suffer heavy losses without being able to diagnose or address any potential underlying issues like the ones mentioned above.
How Infosys BPM can help you with loss prevention?
Massive spikes in fraudulent activities and malicious transactions have pushed retail businesses to accelerate their digital transformation journey and find advanced solutions that enable better loss prevention. Now, more than ever, it is critical for retailers to have the right digital transformation partner that will not only control losses but also make a substantial difference to their overall profitability.
With advanced AI, future-ready technology, and a team of experienced fraud detection specialists, Infosys BPM deploys an award-winning solution that can help protect revenue, improve brand image, and enhance customer trust. Our comprehensive retail and e-commerce fraud solution can be customised to your unique needs and pain points.
*For organisations on the digital transformation journey, agility is key in responding to a rapidly changing technology and business landscape. Now more than ever, it is crucial to deliver and exceed organisational expectations with a robust digital mindset backed by innovation. Enabling businesses to sense, learn, respond, and evolve like a living organism, will be imperative for business excellence going forward. A comprehensive yet modular suite of services is doing exactly that. Equipping organisations with intuitive decision-making automatically at scale, actionable insights based on real-time solutions, anytime/anywhere experience, and in-depth data visibility across functions leading to hyper-productivity, Live Enterprise is building connected organisations that are innovating collaboratively for the future.