New Study Finds Loss Prevention Priorities Fall Short For Large Retailers
By Christine Kern, contributing writer
Disconnect between IT and LP revealed in budgets of retailers.
New research from the IHL Group examines industry perspectives on loss prevention technologies in retail and the very different ways business groups including IT, LP and the C-Suite, valuate and allocate investment, staffing, and more in those technologies, based on their individual roles and priorities. The study, “The Great Disconnect Between LP and IT,” finds that there is a huge disconnect between IT and loss prevention.
A separate 2015 Retail Theft Survey found that dishonest employees steal more than six times the amount stolen by shoplifters ($825.36 vs $133.80), and yet the findings in the IHL research suggest that the gravity of those numbers don’t line up with the importance executives are placing on the problem.
The study found that retailers with greater than $1B in revenue spend only 8.3 percent of their IT budget on LP priorities (not including PCI and data breach protection efforts); and while 100 percent of LP professionals say cashier monitoring is a priority use of CCTV, IT and other business units de-prioritize it at 56 and 57 percent, respectively.
The research also found that, after funding data breach protection and PCI certification efforts, most retail IT budgets have only 6.4 percent of the monies available to spend on other LP priorities.
Greg Buzek, founder and president of IHL Group, said, “In the retail industry, we all have a general understanding that a lot of effort and money is dedicated to EMV compliance, PCI and data breach protection. In conducting this research, what was fascinating to our team is just how much that prioritization drains resources for other LP efforts, specifically in IT.”
Significantly, Buzek stated, “There certainly is a disconnect in regards to focus of existing budget and resources. However, our findings indicate that real opportunities exist for other business units to actually generate revenue from these technologies with new applications, such as traffic counting and video analytics for marketing optimization, and more.”
Paying closer attention to bridging the gap between IT and LP is essential to retailers who want to reduce their shrink due to loss.
The biggest obstacle is that LP thinks and staffs differently than IT. When asked to rank the biggest barriers to a more cohesive relationship, IT and LP generally agreed, weighting “other business priorities” and “systems integration” as the two most important reasons. Other titles in the organization weighted “systems integration,” for example, as the largest concern, showing a disconnect in perceptions around issues and the influence of IT.
“Our team has noticed a clear disconnect in retail between IT and LP departments when it comes to budget, focus and staffing,” said Hedgie Bartol, Business Development Manager, Retail, for Axis Communications. “This is a natural and expected interaction given their differing priorities, but IHL Group’s research has put in place actionable feedback and future-looking opportunities due to IP surveillance technology advancements that can be put in place organization-wide to create stronger relationships and ultimately, turn up revenue from a department otherwise known as a cost center.”