How to Minimise Losses in Retail Business

By Omolabake Fasogbon

The Nigerian retail boasts one of the most lucrative businesses in the country, contributing an estimated 10 to 15 per cent to the economy. 

Despite its prospect however, operators are bedeviled by theft, often perpetrated by mischievous shoppers or internal employees.  Cases also abound for misdemeanor like return fraud, administrative error, vendor fraud and unattributed loss, amongst others. This does not have to do with whether it is a physical or online store in as much there is human interface. 

Many operators have been forced out of business for this reason, while some still roughing it are but counting their losses. This menace is however not peculiar to Nigeria. According to the National Retail Federation, retail shrinkage due to theft in the United States amounted to over $100 billion in 2023 and projected to grow year-over-year.

Multinational e-commerce company, Shopify reported that shoplifting and employee theft make up the bulk of a $61 billion annual problem for the retail industry.

Indeed, the impact of this threat is far -reaching beyond the obvious. 

Honeywell Global Retail Marketing personnel, Tony Boncore, submitted that retail theft was not just a financial burden for retailers, but also impacts the overall shopping experience and trust between customers and retailers. 

“There is also personal risk involved, as associates make attempts to intercept thefts in progress.  Theft also affects shoppers, product availability, pricing, and the overall brand reputation of retailers,” he said.  To maximise profit for operators and sustain the sector for economic prosperity, taming this scourge that has cost global retail a whopping $94.5 billion is unnegotiable. 

Boncore, suggested collective efforts and innovative solutions to defeat this business unfortunate development.

On his part, Global Retail expert, Andy Farley, put forward some proactive measures that operators, especially new-comers should embrace to eliminate and or minimise retail loss. They include the following:

Retail security guards are a must have. 

This is a key staple of the security industry, often viewed as the first line of defence when it comes to securing a shop or supermarket. Retail security guards are the ideal way to prevent theft before it can ever become an issue.

 CCTV is a mainstay in retail security

 Closed-circuit television (CCTV) in the retail industry has evolved significantly from what many of would expect. Gone are the hazy and often difficult-to-interpret images of yesteryear, replaced with clearer images, better reporting, and more reliable footage.

Invest in an upgraded intruder alarm system

This is often an overlooked aspect of preventive measures when it comes to theft from supermarket. A store intruder alarm system shouldn’t remain static. That should go without saying – technology has progressed at a similar rate to the CCTV solutions, and newer, intelligent alarms are quickly becoming commonplace.

Place clear signage around the store

While this is often the last thing many shop owners or managers think about, signage that explicitly mentions the security measures in place offers an additional level of deterrence and safety. Those who are tempted to steal may never see the security personnel or CCTV cameras, and by drawing attention to them, they deter offenders before they ever offend.

Keep an eye on your staff

Of course, the last thing any supermarket owner wants to consider is that the source of their shrink or theft figures is coming from their own staff members. Sadly, with the cost of living crisis worsening, this has become an altogether too common issue. Many supermarkets have already recognised this as a pressing concern. With loss prevention equipment positioned at staff entrances and exits, and sporadic bag checks during times of high risk, it’s essential to keep on top of checking the staff as thoroughly as one would with a customer.

Observe customer behaviour closely

This is an age-old tactic, and one that’s more of a hands-on approach to preventing theft in a supermarket.  It is always beneficial to keep an eye on the movements, behaviour and actions of any customer unsure of, or that is exhibiting concerning signs. This can offer early warning signs that one need to nip any threats of theft in the bud.

Provide your usual excellent customer service

There are few better deterrents to thieves than the way you provide your service. This has been proven time and time again across multiple different industries, and even in the online sphere.  It translates exceptionally well to the physical store. By offering a more comprehensive service, and one that adds additional value to what customers normally receive, one is more likely to keep  loyal customers, and more likely to prevent the more avoidable kinds of theft and shoplifting.

 Stay up to date with latest news

It may seem self-explanatory and already be a routine, but it pays dividends to stay abreast of the latest developments in retail and technology, and how the two intersect as the society moves towards an increasingly high-tech future. Operators will be able to make the right decisions – and ones that are tailored to one’s circumstances and those of clientele – and ultimately ensure that what is done means a more prosperous future for everyone involved with the store.

 Face up your shelves and store fronts

This is a common occurrence in the retail sector. “Facing up” serves a much greater purpose than simply making the shop look enticing to customers. The practice, also called “rumbling” or tidying, simply involves facing product labels to the edge of the shelf and moving the stock up to the front of the shelving so it’s easily reached. Of course, while it does drive sales and boost profits by a small margin, it also makes it easier to recognise where something has been taken, and when. 

Consider a store detective for your supermarket

This is one of the most robust options when it comes to preventing theft in a supermarket. A store or retail detective provides a more covert option for combatting thieves or shoplifters. It will be able to seamlessly blend in with the crowds in larger supermarkets, or as an interested customer in more boutique retailers. 

Ensure you lock up at the end of the day

Locking the doors, windows and access points at the end of the day is arguably the most effective way to mitigate those risks. This is particularly important for those with smaller shops or stores, especially if it involves selling high-value or especially desirable items. Taking that extra few moments each evening to ensure that all windows and doors are locked tightly, and that any access points are secured, makes a massive difference.