4 Ways Technology May Increase Retail Theft

Self-checkout, online shopping, curbside-pickup, same-day delivery—consumer shopping has evolved over the last 20 years thanks to innovations in omni-channel technology. But with innovation comes more opportunities for exploitation. As the technology consumers use to shop becomes more sophisticated, so do the tactics, techniques, and procedures used in retail theft.

Dr. Mark H. Beaudry, an Assistant Professor at Worcester State University, presented his predictions for retail innovations and their potential exploitations at the 2022 National Retail Federation (NRF) Protect show. Here are four of his predictions:

1. Integrated artificial intelligence applications with 5G capabilities will grow. Essentially, consumer-facing technology will integrate with fraud/theft prevention technology to reduce friction in the customer experience while protecting store owners from threat-actors. An example of this is smart shopping carts that perform automatic checkout of the items placed in the cart. This cart allows for a quicker shopping experience by removing the need to scan each individual item. For this cart to work in a retail setting, it must have a third-party theft-prevention trigger, like being integrated with CCTV cameras that can halt the cart if someone tries to run off with it (Trend Micro).
2. Software-as-a-service (SaaS) platform use will increase cybersecurity threats. Think about all the software it takes to run a store—inventory/ERP software, accounting software, payroll/scheduling software, third-party supplier/vendor software integrations, even email. Most of this software is hosted by another company. As store owners continue to invest in SaaS, the risk of a cyberattack increases. Retailers must invest in cybersecurity best practices to protect themselves and their customers from cybercriminals.
3. Organized retail crime (ORC) rings will increase. ORC theft cost retailers an average of $719,548 per $1 billion in sales in 2020. ORCs are individuals or a small group of partners that perform extensive research on which goods can be easily resold online. They employ other criminals to steal these goods from stores across large regions and sell these goods online for a large profit. ORCs thrive in economic downturns when more people are willing to steal, and more customers are looking for better prices online. As a response to this, 61 percent of retailers are prioritizing ORC more than they did five years ago, 52 percent said their company was allocating additional technology resources to address risk, and 36 percent said their company was increasing its annual loss prevention budget (Organized Retail Crime Survey). 
4. Loss prevention will evolve to include information technology skillsets. Retail theft losses were $60 billion in 2022 and are projected to increase in 2023. To prevent crime, you need to think like a criminal. And as criminals become more tech-savvy, loss prevention professionals must do the same. Beaudry predicts universities will offer degrees in loss prevention. Coursework would focus on project management skills, analytics, working with AI, and understanding cybersecurity and cybercrime.