In September, Nike permanently closed a beloved outlet due to uncontrollable theft. Days later, Target announced it was closing nine stores in major cities across the U.S. due to theft and shrinkage. Dick’s shares fell by 24% after a dismal profit forecast caused by an increase in theft.
The nationwide crisis of retail theft is causing a $100+ billion dollar problem in America. Big retailers with big resources are hardly able to keep up. So what about the smaller businesses? They are the lifeline of local communities, yet face a myriad of bigger challenges in preventing theft. Shrinkage is a growing concern for these essential players in the economy, who don’t have the same resources or technology to prevent the theft that bigger retailers already struggle with.
Contributing factors to shrinkage include:
Employee theft: Small retailers often have smaller teams, which causes difficulty catching and preventing employee theft
Inefficient monitoring: Most CCTVs force retailers to sift through hours of complicated footage per day, making it difficult to catch and prevent stealing
Shoplifting: Small retailers may lack the resources to effectively deter thieves
Fear of employee safety: Even when aware of theft, employees at small businesses may fear repercussions and be scared to intervene
Shrinkage can take a heavy toll on small retailers, threatening not only their business model but their ability to survive. It can affect all sides, including:
Financial loss
Diminishing profit
Lack of employee morale
Inefficient stock and operations
Decreased traffic
Shrinkage is an ongoing crisis for retailers, but especially for small businesses without the same resources. We need a new way of dealing with theft – to catch and prevent shrinkage, and keep vital small retailers alive.