Three Tactics Retailers Can Implement Now to Protect Against Cyber Retail Theft
In November the national retail federation released its forecast for holiday season retail sales, expecting growth of 3.6% to 5.2% in 2020, reaching between $755.3 billion and $766.7 billion. E-commerce sales are expected to continue to grow and is expected to make up a significantly higher percentage of sales over previous years.
With this continued shift from traditional walk-in store sales to BOPIS (Buy Online Pickup In Store), and e-commerce sales including the use of ship-from-store strategies, it is more important than ever that retailers adjust their traditional shrink control strategies to combat these changing threats.
Have you ever been shopping online, and added something to your shopping cart, just to learn a few minutes later that it is no longer in the cart, with a message now saying the item is no longer available? Do you wonder why your buy online, ship from store process has so many rejects when stores try to fill the online order?
Smart Asset Protection professionals are focusing much more attention on the latest tactics organized retail criminals, including cyber criminals, are using to attack your systems. Why would criminals risk capture by stealing a truckload of footwear or running out of a store with an armful of team jerseys, when they can now sit home at their computer and divert thousands of units, or re-direct payment data away from the retailer?
With the dramatic increase of online shopping in every industry, protecting the digital interaction will be critical to controlling inventory loss, payment fraud and related chargebacks. The deployment of machine learning and AI tools on inventory and payment data will help prevent and block malicious bot, payment manipulation and account takeover attacks, while at the same time, ensure “good” bots continue to enhance the consumer experience. The industry describes this as Fraud and Trust Data. The right solution addresses both, without negatively affecting the other.
1.) Increase Education and Knowledge
Make sure your Asset Protection and/or IT team are spending an appropriate amount of their budget and time on educating themselves on the latest types of digital fraud, including prolific financially motivated, malware-focused botnets and the systems and approaches being used to prevent and deter it. These approaches must include resources that identify leading indicators vs trailing indicators.
For smaller chains without the luxury of an in-house Asset Protection team or CIO, some basic research will point you to those who can help.
For the past couple decades, the response to the question of what areas contribute to inventory shrinkage has been shoplifting, employee theft, and paperwork/operations/system errors. The significant increase in online purchases changes the game and will also change the answer to that age-old question of what contributes to shrinkage.
The ability for a criminal or an organized retail crime group to create loss for a retailer is now a large multiple of what it was just twelve months ago, when the majority of transactions were still conducted by a consumer walking into a brick-and-mortar retail store to either shop or steal.
2.) Get In Touch
Reach out to peers in your industry who are known for “looking around corners” and identifying “next up” organized retail crime tactics, and approaches.
Brands I know who have been tackling these issues and are employing highly effective event-based protection strategies include Staples, Target, New Balance, PetSmart, Crate & Barrel, and Dunkin’.
Consider joining related associations that these organizations belong to, follow the social feeds of their CIO’s, Asset Protection leaders, and CSO’s, and watch every piece of media they produce on this subject.
Start with basic searches on YouTube. Be a sponge.
You can even start today by connecting with our experts on LinkedIn
3.) Strategic Partnerships
Many brands may not have the in-house team to address these e-commerce frauds, like account takeover and malicious bot and phishing attacks, and online brand & trademark abuse.
There are service provider options including IntelliShop’s Loss Prevention Professional Advisory services, who will help protect your brand, identify the right expert resources, and support these types of non-traditional retail criminal activity. For those who have between 50-200 units, building an in-house loss prevention team with the related payroll, travel and equipment expenses may be out of reach.
You will discover that managed service options offer the same scope that many of America’s favorite brands have, for a fraction of the cost of an in-house program.
Cyber-theft in the retail world is here. You must get up to speed quickly and get ahead of it as soon as possible. It will dwarf the physical theft numbers in a short time. The most successful asset protection professionals in our industry will be those who develop an expertise in these areas and meet this challenge head-on.
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IntelliShop is great at helping us adjust along the way. They have been super helpful. It has been such a huge help, and will only continue to get better. The amount of time the program has saved us has been unfathomable.