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Multilayered solution for retail

Shrinkage in South Africa’s retail sector during 2007 totalled a hefty US $718 million, according to the latest edition of the Global Retail Theft Barometer.

This equates to a rand value of nearly R6,7 billion, which, says Kenny Chiu, marketing manager of Elvey Security Technologies, is an “alarming dent in the country’s retail coffers”.

Stock loss from crime, waste or error expressed as a percentage of retail sales is not only a major problem in South Africa but throughout the world. According to the Report (published in November 2008 by the Centre for Retail Research) which covers 36 countries in North America, Europe, Latin America, Africa and Asia-Pacific, global shrinkage cost retailers US$ 104,529 million in 2008. To this end, 5,3 million store thieves were apprehended during the course of 2008.

“Crime affects the profitability of retail businesses of all sizes, from small individual shops to large multistorey shopping centres,” says Chiu. “It is therefore no wonder that most retailers have made loss prevention a major priority. And they are going to have to be even more vigilant now as a result of the global economic slowdown, which will see ongoing job losses throughout South Africa in the months to come and therefore most likely an escalation in shoplifting and internal crime.”

Critical steps

In order to effectively manage shrinkage in an increasingly challenging environment, Chiu advocates the implementation of certain critical steps. The first, regardless of the size of the entity, is the adoption of what he calls common-sense procedures, the basis of any secure retail environment.

“We are talking about keeping storerooms locked, limiting staff and customer access during stock takes, and addressing blind spots on shop floors, which are all key to substantially reducing loss within the retail sector,” he says. “This is the first level of a multilayered approach critical to retail security both during and after working hours.”

Once the basics are in place, the next vital step is that of employee training. “Good training will teach staff to be observant and constantly on the lookout for suspicious or unusual behaviour,” he explains. “Involving employees in a company’s security culture invariably secures a higher level of commitment from them with regard to adopting various security systems and reducing loss.”

The final security layer usually comprises electronic systems that are operational not only during trading hours but also when premises are closed to the public. Says Chiu: “Electronic systems, with particular regard to video surveillance, play an integral part in a multilayered approach. As well as enabling the detection of intruders after hours, the presence of video systems can deter unauthorised access to vulnerable areas during business.”

Even greater benefits can be achieved through the integration and interoperability between video surveillance, access control and intruder alarm systems, he notes further. “The size and nature of the business will determine the requisite level of sophistication and functionality of the integrated security system. Today’s range of scalable products and systems allow for seamless interoperation and ultimate cost effectiveness with minimal impact on the working environment, which is the aim of good store management anywhere in the world.”

In a market teeming with choice, Chiu says retailers need to keep system interoperability at the top of their minds. “Regardless of the size of the system, if retailers are going to enjoy the benefits of centralised security management to manage their specific risks and priorities, the various components need to be able to interact and be controlled from one central point at all times.”

Internal threats

Quoting statistics from the Global Retail Theft Barometer 2008, Michael Brett, Elvey’s national sales manager, says that around 36% of retail crime is committed by employees, whether in the form of stock theft, dishonest cash handling or fraudulent till manipulation.

“Any attempt to reduce shoplifting therefore requires an active deterrent,” he maintains. “A good starting point is the installation of an access control system for offices, stockrooms and other sensitive areas. What works very well in conjunction with this, is the use of a system that combines article tagging and the overt positioning of video surveillance cameras. Thieves who remain undeterred at this stage will face the next level of security, namely the latest in high-definition digital video systems. These will ensure that clear, visual evidence is recorded, easily retrieved and readily available to support any prosecution.”

An ardent proponent of the use of video verification integrated with POS (point-of-sale), alarm and access control systems, Brett says this combination is one of the most effective deterrents to easy-to-tempt staff members. “It also provides irrefutable evidence if they do end up succumbing to temptation,” adds Chiu. “When properly implemented, video verification systems can send visual information straight to managers and monitoring stations on designated events such as the opening of the safe or schedule for virtual visits, which is of huge benefit.”

Cash handling

The handling of cash is a major issue within the retail industry, says Chiu. “Cash is a constant temptation, not only for employees regularly handling small amounts but also for serious criminals with their eyes on areas in which substantial takings accumulate. Again, video surveillance and alarm systems fitted with discrete panic buttons linked to armed response or the police have a proven deterrent effect.”

The majority of vandalism and theft incidents, not to mention break-ins, occurs under cover of darkness or outside normal working hours, avers Brett. “That is why electronic systems are becoming increasingly vital in the retail industry’s fight against crime. They not only provide a deterrent factor but also help identify, apprehend and successfully prosecute perpetrators. The integration of access control, intruder detection and video surveillance systems via IP (Internet protocol) has provided welcome flexibility when it comes to catering for different levels of security during and after business hours.”

1. Financial

Brett maintains that companies with systems networked to their central control rooms have the financial savings to show for their foresight. “They are saving thousands of rands every month using this technology as opposed to alarm communication over traditional telephone lines. The IP approach not only offers massive savings in telephone bills, it also continuously supervises the communication links with the control room, instantly notifying the operator of any breakdown.”

2. Service

“Another huge benefit of electronic security is that it relieves staff of routine security procedures, thereby giving them more time for customers,” he says. “As a result of an improved service offering, the company can look forward to improved levels of new as well as repeat business.”

3. Safety

Aside from its many security advantages, this technology also brings with it peace of mind for management, Brett points out. “Access control systems not only restrict entry to financially risky areas such as warehouses and stockrooms, they can also prevent or reduce the number of accidents in the workplace by allowing only personnel trained in health and safety policies into particular environments.”

In short, Chiu concludes, improved security is not only key to providing a safer retail environment for customers and staff, but it also brings a measurable return on investment. “In any language, anywhere in the world, this translates to fewer losses, improved customer service, better staff retention and an enhanced level of safety within the workplace.”

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