Retail Loss Prevention

Mar20

Shoplifters’ No. 1!

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No, my post is not about any upcoming movie of David Dhavan on his no. 1 sequel. But it is about we Indians who are consistently topping the survey called ‘Global Retail Theft Barometer’. It’s an annual survey which was conducted third time in 2009 covering 1,069 large retailers spread across 41 countries in globe. India yet again topped the survey with Retail Shrinkage at 3.2%.

In layman’s language it means that Rs.3.20p worth of good is shoplifted in India for sale of every Rs.100 worth of goods sold in Indian Retail Industry. We are not only leading the survey but are far ahead of the runners up. The runner up i.e. Morocco is at 1.79% and then Mexico at 1.75% and so on. Taiwan had minimum shrinkage i.e. 0.89%. Indian shoplifters prefer stealing gadgets, fashion product, alcohol, apparel and jewellery over other stuffs as they are more valuable and easy to lift.

I won’t talk anymore about statistics in my post as they are easily accessible on little bit googling but I would like analyze that why are we topping it regularly. Considering our economy and way of working of Indian Retailers, I feel that followings are root cause for such higher shrinkage in Indian Retail Industry:

Retailers in India are not tech savvy. They do not use latest security systems for Retail Loss Prevention. This is gives opportunity to commit such offence.
Most of the processes in Indian Retail Industry are still having lots of Manual Interventions. For example goods receiving process at store. Thus employees take advantage of these manual processes.
Employee theft accounts for one of the major chunk of Retail Loss. One of the major drivers for them is lack of job security which in turn reduces their loyalty. Employee engagement & relationship building activities are very rare. Compensation, HR Policies and incentives are not comparable to other industries. Thus employees don’t have long-term commitment with their employers and they don’t mind committing such nuisances.
Corruption in India has also played role in it. There are so many scams and crime which keeps happening in India and the culprits are not caught or punished severely. Consequently, customers don’t even consider an act like shop lifting as crime only.
Retailers in India do not showcase their policies on Retail Theft to customers. It could be a good practice to display them at locations like entrance, cash counters etc.
Shopping Malls and Stores in India are generally too much crowded especially on weekends and space is too less in comparison to crowd. This gives opportunity to shoplifters to execute their art.
We don’t have Retail Laws for punishing the offenders of Retail theft in place and it is considered as normal theft. Moreover Retailers are generally scared of messing up with Customers specially the educated class knowingly that they have committed the crime.
We Indians are innovative and intelligent breed. Before the development of a security system, we find the way to crack it. So, no wonder that we are leading this survey!
The global recession which has just come to an end is one of the possible reasons for rise in Retail Theft in India.
Poverty in India is one of the major reasons for consistent performance in this survey.

These are the possible reasons I can think of as of now. I would appreciate any additions/discussions on these