Future of Loss Prevention-II

Changing Landscape Due to COVID: Building a Business Case for AI


Anil Puri
CMD, APS group

A thought leader and an action catalyzer rolled into one – Anil Puri is a rare combination of a visionary, and one who has mastered the art of strategic and tactical thinking to the core. He has been using this combination to seed new ideas and to lead them to their implementation on-ground. This has been a consistent feature of his career. He has rich experience of approximately 35 years in corporate in diverse domains & from functional managerial level to the apex as chairman of a corporate group. To him, The loss prevention (LP) has always occupied central place when planning the security protocols for the shopping malls, warehouses, large shopping complexes, standalone retail stores and manufacturing plants. He has been keenly watching the developments in the loss prevention techniques emerging in this domain. Old adage loss prevention techniques have stood the test of times but have been breached, losses inflicted and profitability hit. However, emerging innovative technologies have revolutionized the entire perspective of loss prevention. He contributes extensively in framework of security protocols of loss prevention with his ops team before deployment of security personnel at high end shopping malls. Here he shares his thoughts on new landscape which has gradually been shaping in favor of the retailers. Let us see what future holds for loss prevention. Here he propagates the enhanced usage of AI in loss prevention.


Retail shrinkage is a multi-billion-dollar, multi-layered monster that affects organizations throughout the retail industry. The problem spans beyond the physical store and has roots throughout the entire supply chain. Government-imposed public health protocols, social restrictions and lockdowns that have arisen because of the COVID-19 global pandemic have changed the way people do things the world over. The impacts on the retail sector have been significant, translating it into levels of adversity unlike anything business has ever before faced. For retail loss prevention teams charged with ensuring the safety and security of the business’ employees, customers and product, the shifts and accelerations in consumer behavior mean that they have to rethink & revisit their strategies. They have had to leverage their creativity and innovation in order to pivot and respond to a whole new set of challenges. Globally many retail loss prevention forums have organized events to help address the evolving concerns of today’s loss prevention professionals and discuss the ways by which leaders within the industry are proactively producing effective solutions to protect their businesses. This has provided virtual attendees with thought leadership, critical insights into best practices with respect to day-to-day retail operations and an incredible opportunity to network with industry colleagues concerning the most pressing issues their industry is facing today.

How to disrupt the organized crime?

The scourge of organized retail crime (ORC) continues to cast a pall over retail operations, with the number of incidents escalating since the start of the pandemic. Given the increasingly sophisticated means by which these groups, who often travel from region to region, are striking neighborhoods and cities indiscriminately, the role of loss prevention teams in curbing this very serious threat is critical. It is time to unpack this complicated issue for retailers and discuss some of the ways in which loss prevention teams can enhance the protection of their organizations. As impacts of the pandemic continue to influence the way today’s consumer shops and accelerates online activity, retailers are faced with more adversity than ever before in providing a safe, secure and seamless environment in which to serve their customers. To better understand how these changes in consumer behavior are impacting retailers’ efforts to ensure a best-in-class experience during these difficult times, and to share insights concerning some of the incredible pivots being made by loss prevention teams in order to support their organization’s operations and service.

Potential Ramifications

The sessions organized by loss prevention forums focused on the potential ramifications of ORC to retail operations, the trends that are related to the activities of these crime groups, as well as some of the proactive steps that can be taken by loss prevention teams in order to deal with the risk like:

(a) Retailers should join any network that is available to them.

(b) If there aren’t any, they should create one for themselves

(c) Be proactive in hosting opportunities to get together with law enforcement partners, fellow loss prevention officers, community associations, city politicians and crown attorneys to hold ongoing dialogue. Creating these communities makes it easier for everyone impacted by these crimes to identify associated trends and more difficult for ORC groups to operate as efficiently as they’d like to.

Developing a Threat Awareness

Another threat wreaking havoc on retail operations is found within the digital world. Though perpetrated by living, breathing human beings, the veiled activities of cybercriminals allow them to conduct their misdeeds behind a screen and provide them both with relative anonymity and the digital tools they need to undo a business. It is important to understand the ways in which a cyber threat and incident can occur as well as the potential ramifications to the retail bottom line and the steps that are required of organizations to properly deal with the issue. What is needed is – Developing the threat awareness, understanding of relevant prevention information and adhering to best digital practices will be key. Too often, the cyber-attacks go unreported. As a result, the attackers are emboldened knowing that law enforcement is unaware of the scope of the problem and that the incidents likely won’t be investigated. It’s imperative that any and all cyber attacks be reported to the police. In tandem with the incident reporting to law enforcement, retailers must follow the procedures that have been outlined within their company’s cyber incident response plan. If a plan has not been developed, then it should become a quick priority. That’s where retailers and law enforcement will be able to make a difference, making it harder for cybercriminals to operate, thereby reducing the level of victimization.

Wearable technology

The evolution of wearable technology and how it can be leveraged in the retail environment to help provide safer and more secure experiences for employees and guests is certainly reckoning landscape involving tracking of loss prevention and safety audits, the enhancement of store walkthroughs and product delivery. The possible uses for such technology are seemingly endless. This set of technology has the capability to help retailers improve curbside pickup processes, enhance customer care interaction, provide audits of delivered items, as well as allow for the effective monitoring of a number of other health and safety issues. It’s really set to change the way retailers approach risk mitigation and ensure a safe and secure environment for their employees and customers.

Current Technologies – Arming the retailer with immense power and insights

The current environment presented leading electronics retailers with a monumental task. When you are introducing curbside, you’re moving product through the store in a different way and sending an employee into the parking lot with a high-end item. One had to consider things like camera coverage, sight lines and internal processes to cut down on loss. The impacts of the pandemic accelerated not only consumer behavior, but the company’s digital strategy as well. The circumstances over the past year have helped the companies to identify gaps in its processes today in order to deal effectively with a changed landscape. Because increased online consumer activity is a shift that will unlikely subside at all post pandemic. It’s something that retailers have to be looking at now in order to continue dealing with increased online sales and the associated risks to the business.

Considerations for Tech stack

The digitization of the retail environment has opened up an entirely new world of possibilities to engage with consumers, promote offerings and elevate the shopping experience to new heights. However, it’s also presenting information technology and loss prevention teams with complicated decisions to make regarding the development of the technology infrastructure to properly support their efforts. It’s presenting retailers with the opportunity to truly move from reactive systems to proactive systems to identify and mitigate loss before it happens. To help retailers navigate the complex considerations that are required when building their tech stack. The evolution of current technologies is arming retailers with immense power and insights. It is believed that we’re on the verge of a true step change in the analytics capabilities of security systems. It’s being driven by important underlying technologies. The combination of the Internet of Things, where all devices are intelligent and connected, and artificial intelligence is bringing new levels of detection capabilities as well as increasing processing power. It is worth recognizing, how difficult it is for teams to stay on top of all of the most recent technology developments, butstresses that loss prevention professionals do their homework in order to make informed decisions concerning the tools they’re investing in. It is strongly recommend that all loss prevention professionals become intimately familiar with the subject of artificial intelligence and how devices powered with the technology can become incredibly effective tools to secure their businesses. Understanding its potential, and combining that understanding with an acute awareness of your current systems, including their capabilities and limitations, can really help distinguish between overly-hyped sales pitches versus accurately represented systems that will help your organization.

The Value of Community Partnerships and Engagement

When it comes to tackling the evolving issues of loss prevention today, and in seeking out newer solutions to the complex challenges that threaten the safety and security of retail organizations, sometimes a different perspective is required. Through a creative approach, leveraging thinking that intentionally challenges the conventional loss prevention paradigm. By developing relationships between the retailer and Crime Stoppers, local law enforcement, media and members of the community, it will be feasible to increase engagement and involvement around the issue with support of awareness campaigns and effective use of social media. This will enable to create a safer, more secure environment for its employees and customers. As a result, the surrounding communities were made that much safer. These results are a testament of improving the loss prevention outcomes and the value of re-evaluating traditional approaches and thinking differently when it comes to preventing loss and crime.

The Road Ahead

Given the recent pressures that have been faced by retail loss prevention teams amid a changed retail landscape, combined with the speed at which the retail industry moves, it’s clear that creativity and innovative approaches to loss are required more today than at any time earlier. However, what’s just as evident is the fact that professionals at organizations across the country are stepping up to meet the challenge through the development of strategic partnerships with local law enforcement, intra-industry collaboration and information sharing, the development and use of the right technologies and a continued focus on ensuring the security of the entire retail ecosystem, they’re helping to pave the way toward a safer and more profitable tomorrow. To address the problem, retailers have tried several different methods, from using mirrors to expose blind spots in stores, to installing video surveillance and investing in electronic article surveillance tags, but organizations still fall victim to shrinkage. Retailers have begun to embrace advanced technologies such as artificial intelligence (AI) and IoT-enabled solutions, as a new set of tools to protect their assets. Refund transactions were carried out when there was no customer in the store. By correlating transactions with AI-powered video analytics to map foot traffic and time of day, the retailer was able to predict abnormal activity with a high degree of accuracy and confidence. The retailer has recognized the accuracy and level of sophistication of intelligent video analytics and intends to scale up the operations to a real-time deployment across multiple store locations. With advanced AI capabilities, the retailer will be able to remotely identify suspicious activity and PoS transactions in real-time to prevent fraud as it occurs.

Implementation of AI and IoT – A Case Study

An organization in Asia was challenged by the amount of theft that occurred as products were transported from farm to factory. Throughout the supply chain journey, the company’s processes were manual and disjointed, including vehicle number checks, verification of delivery orders, driver details, data entry etc. They suffered a great deal of theft, and a notable amount of farm produce went missing during transport. In some instances, large stones of equivalent weight were added into the truck to mitigate suspicion. This pilferage was difficult to contain, labor intensive and impractical to address through manual interventions. After new technological capabilities were integrated at every stage of the supply chain using a combination of AI, IoT, andcomputer vision, the customer could gain valuable insights, enable greater control over operations and mitigate theft. Now, when the truck arrives at the factory, the truck driver presents a delivery order (DO) that is scanned. Once scanned, the computer vision module reads the DO, uses algorithms to correct the image and cognitive services to extract and store relevant data such as weight, load details, shipment number and product information. This data is automatically paired with the truck using license plate recognition and the driver using face recognition. At the weigh bridge, real-time weight data is stored and uploaded into an integrated IoT platform. At the same time, AI is used to detect the presence of foreign objects. From farm to store, AI and IoT-powered solutions are used to capture data and decrease fraudulent activity at every stage.

Conclusion – Building the Business Case for AI

An AI-led approach is truly an innovative way to address shrinkage, as demonstrated in the afore mentioned example. However, one of the main challenges is the democratization of AI and advanced technologies and the proliferation of proof-of-concepts or pilots that do not scale. There are also fast-evolving trends in technology, like ‘AI on the edge.’ The key is to have right technology considerations in the solution architecture that will yield the business case/ RoI – and a clear roadmap to scale.

Once this step is in place, companies can provide associates with access to the information they need, when they need it and teach them how to use it to mitigate loss. This enables employees at every level to do their jobs more effectively and profitably. Working with an experienced IT consultant allows companies to assess their current operations and loss prevention strategy, integrate AI-powered solutions and ensure key leaders and employees understand how to interact with new technology.


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