The USA National Retail Federation (NRF) recently published the 11th annual Organized Retail Crime (ORC) survey. The latest data indicates that almost 97% of all the surveyed retailers have been a victim of ORC in the last 12 months.
2015 Summary of Key ORC Findings
- 97% is the highest percentage of retailers impacted during the last five years.
- This year 48.5% of retailers have experienced a significant increase in ORC activity.
- The average loss was $453,940 - or a median of $194,340 - per $1 billion in annual sales volume.
- Leading physical 'fence' locations are pawn shops, stores, swap meets, or flea markets. Nearly 60% of retailers have identified or recovered merchandise from these locations.
- Online auction sites and classified sites were the leading 'e-fencing' locations. Nearly 69% of retailers have identified or recovered merchandise from e-locations.
- Two thirds of retailers have encountered issues with merchandise credit or gift cards in the last year. Nearly 55% of retailers found merchandise credit or gift cards on websites.
- Nearly 40% of retailers reported being the victims of cargo theft with highest theft occurring enroute from the distribution center to the store.
- Over 30% of retailers are allocating more staff to ORC, up from 22% last year. A similar percentage of retailers are allocating more technology resources.
- Returns, point of sale, and trespass policies continue to be modified as a result of ORC activities.
- The top 5 USA cities with ORC activities are Los Angeles, Miami, Chicago, New York, and Houston.
Top ORC Items Stolen by Retail Sub-Vertical
- Grocery: cigarettes, energy drinks, high-end liquor, and infant formula.
- Health & Beauty: teeth whitening strips, pregnancy tests, and razor blades refills.
- Over-the-Counter Medicine: Allergy medicine, diabetic testing strips, pain relievers, and weight loss pills.
- Clothing: Denim pants, designer clothing and handbags.
- Home: high-end vacuums, high-end appliances, mixers, children's electronic toys, and laundry detergent.
- Electronics: cell phones, GPS devices, laptops/tablets, and electronic fitness devices.
Solutions to Address Organized Retail Crime
As pointed out in the NRF ORC survey, new state laws are being adopted across the United States to combat ORC crime. Since 2008, 30 states have enacted laws focusing on this retail industry problem. In states with ORC laws, nearly 50% of retailers report that ORC laws are having a positive impact on increased support from law enforcement. Nearly 80% of retailers believe that a USA federal ORC law is needed to combat this issue.
Personally would also concur with some recommendations found in a 2009 ASIS report titled 'Organized Retail Crime: Assessing the Risk and Developing Effective Strategies'. The "most recognized theft deterrent in the retail industry is customer service. Criminals prefer stores where there is minimal interaction with sales associates, allowing them to commit their crimes without drawing much attention. In addition to excellent customer service, designing store layout and products against crime, regularly staffing entrances and exits, enhancing inventory controls around hot products, and adhering to supply chain security standards will further thwart ORC activity."
Get retail employees out of the backroom and onto the sales floor deterring theft and more importantly improving customer service. Fortify the store leveraging smarter technologies such as:
- Small in-aisle shelf public view monitors.
- Intelligent integration between video and electronic article surveillance (EAS) solutions.
- Intensified source tagging programs with visual deterrence.
- Item level shrink visibility solutions through RFID.
- Internet of Things (IoT) expanded store sensors integrated into data and video analytics engines.
A balance of new laws, effective deployment of store employees and new technologies are key strategies to reversing the growing Organized Retail Crime (ORC) threat to the global retail industry.