Study finds disconnect between LP, IT professionals
Although retailers, by and large, have made significant strides in recent years to minimize incidents of shoplifting and internal theft, losses from shrink were estimated to have cost the industry more than $40 billion last year. Despite the severity of the problem, many loss prevention (LP) professionals are not on the same page with their counterparts in IT and other business units in retail organizations.
Axis Communications recently released the results of a study conducted by IHL Group, a global research and advisory firm that specializes in technologies for the retail and hospitality industries, which identified some of the underlying factors behind this disconnect. The study, which segmented retailers into four different tiers based on how much they generated in sales, found that loss prevention efforts related to data protection – PCI and data breaches – accounted for 35 percent of retailers’ total LP focus (i.e. focus on losses, not necessarily budget or staff allocation). Employee theft, return fraud, consumer theft and organized retail crime combined only accounted for 46 percent of the LP focus for retailers.
In addition, the study found that tier 1 retailers, which are those characterized as having more than $1 billion in sales, dedicate 4.5 percent of their IT staff to LP efforts, compared with tier 3 ($100 million to $500 million in sales) and tier 4 (less than $100 million in sales) organizations which devote nearly 8 percent.
Greg Buzek, founder and president of IHL Group, said that this doesn’t necessarily indicate that larger retailers are devoting less IT staff to LP efforts.
“What we realized is that there is a critical mass you need for any retailer in terms of the amount of staff, as a percentage of revenue, dedicated to security,” explained Buzek. “Once that critical mass is hit, there is also a ceiling as well, so there are so many (staff members) that you absolutely need and then it is not necessarily a linear scale and you begin to get efficiencies that allow you to put staff on revenue growth activities or other activities beyond security.”
And while the retail industry has been widely panned as one of the last stalwarts when it comes using analog surveillance technology, the study found that 86 percent of respondents had CCTV in place and of those, 64 percent indicated that they were leveraging IP-enabled solutions. According to Hedgie Bartol, business development manager, retail, for Axis Communications, some respondents may be in some form of pilot testing of IP video which could explain the high number.
“What I am seeing happen is a lot of folks maybe be piloting or testing IP technology and are therefore saying, ‘We are making the migration,’ when, in fact, they may only have a small number of stores using them,” said Bartol. “Some may also be due to definition. Some folks can regard that a DVR is an IP device because it is IP-addressable, when, in fact, it is using analog technology.”
Buzek said that this demand for IP video products is being driven more so by the desire to track shoppers and traffic patterns rather than for loss.
Los Angels in Security Camera Installation.
Axis Communications recently released the results of a study conducted by IHL Group, a global research and advisory firm that specializes in technologies for the retail and hospitality industries, which identified some of the underlying factors behind this disconnect. The study, which segmented retailers into four different tiers based on how much they generated in sales, found that loss prevention efforts related to data protection – PCI and data breaches – accounted for 35 percent of retailers’ total LP focus (i.e. focus on losses, not necessarily budget or staff allocation). Employee theft, return fraud, consumer theft and organized retail crime combined only accounted for 46 percent of the LP focus for retailers.
In addition, the study found that tier 1 retailers, which are those characterized as having more than $1 billion in sales, dedicate 4.5 percent of their IT staff to LP efforts, compared with tier 3 ($100 million to $500 million in sales) and tier 4 (less than $100 million in sales) organizations which devote nearly 8 percent.
Greg Buzek, founder and president of IHL Group, said that this doesn’t necessarily indicate that larger retailers are devoting less IT staff to LP efforts.
“What we realized is that there is a critical mass you need for any retailer in terms of the amount of staff, as a percentage of revenue, dedicated to security,” explained Buzek. “Once that critical mass is hit, there is also a ceiling as well, so there are so many (staff members) that you absolutely need and then it is not necessarily a linear scale and you begin to get efficiencies that allow you to put staff on revenue growth activities or other activities beyond security.”
And while the retail industry has been widely panned as one of the last stalwarts when it comes using analog surveillance technology, the study found that 86 percent of respondents had CCTV in place and of those, 64 percent indicated that they were leveraging IP-enabled solutions. According to Hedgie Bartol, business development manager, retail, for Axis Communications, some respondents may be in some form of pilot testing of IP video which could explain the high number.
“What I am seeing happen is a lot of folks maybe be piloting or testing IP technology and are therefore saying, ‘We are making the migration,’ when, in fact, they may only have a small number of stores using them,” said Bartol. “Some may also be due to definition. Some folks can regard that a DVR is an IP device because it is IP-addressable, when, in fact, it is using analog technology.”
Buzek said that this demand for IP video products is being driven more so by the desire to track shoppers and traffic patterns rather than for loss.
Los Angels in Security Camera Installation.
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