Over the past several years, retailers have faced significant challenges, particularly from the ongoing threat of organized retail crime (ORC). According to the National Retail Federation, the industry faced $112 billion in retail losses in 2022 alone. This staggering figure has prompted retailers to take a step back and implement proactive measures to counter the impact of ORC.

The obstacles retailers face directly impact their customers, with ORC being a major concern. As crime rates rise, it becomes crucial for retailers to focus on the frontlines of their businesses to maintain customer trust. Gartner research shows that brands with high levels of customer experience have a strong correlation with increased brand loyalty. Ensuring customer satisfaction is a top priority for retailers, yet crime in storefronts remains a significant obstacle to achieving this goal.

To effectively combat theft, and maintain a high-quality customer experience, retailers must take a new approach. This starts with leveraging advanced technology, and integrating legislative measures to strategically reclaim control over products, and mitigate ORC’s impact on the bottom line and the customer experience.

Executing on Legal Frameworks to Understand ORC Importance

An NRF survey reported that 90% of retail leaders believe ORC is more of a risk than it was over the last three years. ORC activities are impacting inventory accuracy considering retailers often do not know what was stolen, and that in turn affects on-shelf availability while reducing the retailer’s margins significantly. The first step in addressing this crime is to collaborate with legislators on filling the gaps in existing legislation to develop a robust legal framework that thoroughly addresses the issue at hand.

In recent years, we’ve seen an uptick in legislation introduced to raise awareness about the significant threat ORC poses to public safety and the economy. Most recently, efforts to pass the Organized Retail Crime Act have helped avoid further escalation across the industry. From a federal and local level, these laws aim to enhance coordination, improve data sharing, and strengthen penalties to deter organized retail crime before it occurs.

Recent adoption in California and New York exemplify these efforts. Both states have made substantial investments in order to proactively combat ORC, with New York even establishing a law enforcement taskforce dedicated to targeting organized retail theft cases. Legislation plays a crucial role in providing the necessary resources and framework to combat organized retail crime. These initiatives guide coordination of law enforcement efforts across various regions, facilitating more effective identification and apprehension of perpetrators by linking cases across state boundaries. This approach is essential for addressing the complexities of modern retail crime networks.  

In addition, on June 20 the Retail Industry Leaders Association (RILA) and National District Attorney Association (NDAA) announced the launch of an online course that enhances prosecutors’ efforts to combat ORC. The first-of-its-kind course will help prosecutors build stronger cases in collaboration with retailers and law enforcement.

Placing IoT Technology at the Forefront 

Organized retail crime demands swift and decisive action. By integrating IoT-enabled solutions that provide real-time tracking and monitoring throughout the supply chain, companies proactively identify when high-value products are impacted. This is why, by 2033, IoT investments in SCM are expecting to reach $41.8 billion to improve operational efficiency and predictive monitoring. 

Inventory tracking is a major expectation for retailers. However, only 65% of inventory is accurately accounted for. Given the rise in incidents of crime and shoplifting, which have increased by 16% since 2019 according to the Council on Criminal Justice, accurate tracking becomes even more critical. Investments in technology play a pivotal role in enabling businesses to promptly respond to such incidents. This enhances their ability to recover stolen goods swiftly, minimize financial losses, and potentially deter future criminal activity, delivering the highest level of customer satisfaction. 

IoT solutions offer enhanced supply chain visibility, and enable real-time alerts, combined with accurate prescriptive next actions. This allows for immediate intervention and improved inventory management, which is crucial in combating sophisticated criminal activities that target retail establishments. 

Integrating Tech and Legislation for Long-Term Success 

Technological advancements and legal frameworks must work in concert to effectively minimize loss, and combat theft across retail storefronts. This partnership will serve as a foundational element in creating a secure shopping environment. By integrating advanced technologies such as AI, IoT and prescriptive analytics, retailers can identify theft and losses more efficiently. 

The popularity of omnichannel and e-commerce shopping experiences has surged in recent years. While this flexibility is essential for delivering the ultimate customer experience, proactive measures are still necessary for those who choose to shop in-store. Collaborating with state and federal law enforcement, alongside integrating advanced technology, will ensure a safe and efficient shopping environment for both consumers and employees.

The convergence of technology and legislation offers a multi-faceted approach to combating organized retail crime. By harnessing the power of innovation and regulatory frameworks, companies can strengthen their defenses against criminal activities, ultimately safeguarding their operations and preserving trust within the retail ecosystem.  

Guy Yehiav is president of SmartSense by Digi.