Shoplifting has been an issue for retailers for millennia, since the first bazaars and street markets of the ancient world.

What was once considered a minor irritation and cost of doing business has become a major issue for retailers’ bottom lines.

A study by the European Alliance for Safe Retail (EARS) found that the cost of retail crime in the European Union was €16.6 billion in 2022, a 13% increase from the year before and the highest figure since the study began in 2015. In the UK alone, retail losses were estimated at nearly $8 billion in 2023, according to EARS. According to research by credit card company CapitalOne, retail crime cost U.S. retailers $112 billion in 2022. That figure is projected to increase to $143 billion in 2025, according to CapitalOne.

It’s not just random shoplifters. Organized crime rings and, unfortunately, employees perpetrate much of the theft. The Transported Asset Protection Association EMEA estimates that 40% of retail theft in the UK is perpetrated by employees, including those affiliated with organized crime groups.

With all these threats, inside and out, retailers are looking for ways to stem the losses and shore up the bottom line. While it is common to find analogue camera systems, they make it almost impossible to identify suspects – let alone combat organized fraud.

In the last 10 years, however, video technology has seen enormous progress – from affordable high-resolution cameras that cope well with different lighting conditions to powerful video management systems that efficiently operate with tens of thousands of cameras.

By investing in security technology, retailers can save millions in theft losses. Thanks to the smart technology in today’s cameras, they can also gather and analyze important business metrics.

Smart cameras

The first step in modernizing retail security is upgrading video surveillance. Today’s high-resolution smart cameras do much more than capture images. They can detect suspicious activity in progress and alert store associates or security teams in real time, sending a message to their headsets to alert them of the situation and instruct them where the incident is unfolding.

Many shoplifters will attempt to circumvent sensors that detect anti-theft tags by packing a shopping cart with goods and rushing through the entrance door. In such cases, the modern security system can trigger a loudspeaker alerting the customer that they are using the wrong door, meanwhile alerting store personnel of potential criminal activity. The system can also detect theft activity by employees in stores, warehouses and distribution centres.

These high-tech cameras can help stem retail shrink and also increase the bottom line by monitoring customer preferences. Matched with a video management system, they can deliver precise information on customer traffic, footfall, and dwell times, from assortment to product level, allowing a detailed analysis of where unproductive product groups offer room for new offerings.

Technology ecosystem

When modernizing physical security, a robust video management system is necessary to collect and analyze the data and provide the computing power to perform the necessary analytics.

In a large network of hundreds of stores, the server capacity required to run a complex central video management system could be very expensive. Furthermore, the entire system is concentrated on a central system hub that must always be available to keep everything running.

Should the central system fail, nothing will work in the individual stores. The solution lies in cloud management of independent local systems.

Cloud-supported services (whether private or public cloud) for central administration, monitoring and reporting are easily scalable, both in terms of technical expansion and geographical scaling. Cloud-based systems also allow for the integration of disparate systems in a global retailer’s network, which includes not just stores but also headquarters, warehouses, distribution centres and production sites.

Connecting physical security systems with business processes is essential to enable efficient and effective investigations throughout the organization, especially when fighting fraud.

For example, for brick-and-mortar stores, integrating video technology with the check-out or enterprise resource planning system enables targeted investigations for transactions that pose a higher risk of fraud – such as voided transactions, cancellations or returns. For online orders, recording the picking process using video surveillance technology helps e-commerce retailers document the contents of a shipment to refute false customer claims about missing items.

Multiple site management

In recent years, video surveillance projects have become more complex for major retailers, demanding more resources and increasing operational costs. Modifying the configuration of multiple sites is time-consuming, and monitoring the health status of all servers, services and cameras across every location is a challenge. Consequently, organizations frequently overspend on technical expertise and unnecessary licenses and potentially expose themselves to regulatory risks.

Knowing the status of each video instance is key if your organization prioritizes physical security.

A web-based management platform enables the configuration, management and monitoring of all connected systems across multiple sites. The platform provides a consolidated view of all entities (servers, services, cameras) across all connected installations, highlighting those that require attention. Configuration changes can be made centrally and rolled out to several or all connected installations.

Embrace innovation

Modern security technology offers a robust solution to the age-old problem of retail theft. Retailers can significantly reduce losses from theft and fraud by investing in high-resolution smart cameras, an intelligent system management architecture and a web-based management platform. These technologies enhance security and provide valuable business insights, helping retailers optimize operations and improve customer experiences.

As retail environments become increasingly complex, integrating advanced security systems with business processes is essential for effective loss prevention and operational efficiency. Embracing these innovations will enable retailers to protect their assets, streamline their operations, and ultimately, boost their bottom line.

Johann Kraus is a retail global account manager for Hexagon’s Safety, Infrastructure & Geospatial division.

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