Retail Risk – Identifying the wood from the trees. Post written by Corin Dennison | Contact Corin | Jan 2024 As 2023 draws to a close the World of UK Retail has plenty to reflect on. With global socio-economic disruption leading to ‘cost of living’ crisis factors such as fuel price rises, mortgage rate hikes, increased food costs and the specter of organized retail crime, flash robbing and violence against shop-workers, the challenges for retail leaders have been immense, and even more so for those tasked to manage retail risk. Tracking retail shrinkage has always been a core KPI and risk gauge for retail risk professionals, but with the varying challenges of loss drivers from internal to external factors, it can be difficult to see the wood for the trees and to prioritize where to focus first to mitigate the biggest risks. Sharing some published statistics from 2023 the outlook for UK retail would appear to be bleak. The Association of Convenience Stores (ACS) 2023 Crime Report with data collated from over 16,000 members highlighted: 63% of shop theft is committed by repeat offenders; 79% of retailers believe that the cost-of-living crisis has led to an increase in theft; 87% of colleagues working in convenience stores have experienced verbal abuse over the last year; Retailers estimate that just 16% of crimes against their business are reported to the police; £228m was invested by convenience retailers in crime prevention measures over the last year. Forecourt Trader June 2023 Turning our attention to larger blue-chip retailers the findings are similar and equally alarming. The British Retail Consortium (BRC) Annual Crime Survey for 2023 highlighted: 867 incidents daily of retail violence and abuse Total retail crime of £1.76 billion of which £953 million is attributed to customer theft £722 million spent by retailers on crime prevention BRC Crime Survey 2023 But maybe all is not lost as we advance into 2024. In 2022, following an extensive campaign by the BRC and others, an amendment was secured to the Police Crime, Sentencing and Courts Act, aimed at better protecting people working in retail. In 2023, the National Police Chiefs Council (NPCC) produced a Retail Crime Action Plan initiating the launch of Operation Pegasus, a national partnership between several major UK retailers and the Home Office to combat Retail Organised Crime. This is indeed a positive step forward but there may continue to be challenges ahead for retailers, large or small, who will not or cannot afford to fund such a bespoke partnership initiative. With a large portion of retail crime committed by a smaller but committed group of offenders, the answer may still lie within the quality and the consolidation of reporting data to be able effectively identify prolific offenders and risk groups much earlier. The main challenges are two-fold for retailers; namely what data to report and capture and subsequently into what management system this should be reported, all of which needs to be as time and cost effective as possible. There are many case and incident management providers to choose from, and whilst each may have unique functionality and selling points, the main question to be asked is how can these feed into the respective law enforcement systems to achieve the big evidential data picture that we all aspire to? With 43 UK police forces using a range of data management systems from NicheRMS, X-Fire to Vantage (naming a few) there requires a real focus on data integration and convergence, at the very least the adoption of a agnostic system approach, to be able to achieve success.Referring back to the industry statistics quoted in this article, there are two call outs, the first being the volume of incidents occurring daily in UK Retail. If the scope of Retail crime is to be fully recognized and acknowledged then the challenge is to ensure that the reporting of retail crime is elevated from the 16% reported to police. Clearly there continues to be a ‘disconnect’ between crime incidents, reported crime, police investigations leading to prosecutions, and finally convictions, but the starting point needs to be the comprehensive capture of incidents and the quality of data and evidence that will support a police action. Zinc Systems have been working with several UK retailers over the past years to refine the reporting of retail crime to provide the best-case scenario for submitting a police crime report. ‘Understanding the retail environment and operational framework is critical to building a resilient incident management model’ says Sophie Malone, Chief Operating Officer of Zinc. ‘No one retailer operates the same and our mission is to create operationally sound systems that empower retailers to capture incident data at the time of occurrence and provide the best evidential output that law enforcement requires to be able to progress an incident from point of occurrence to apprehension of an offender, to charge and subsequent conviction. This requires bridging the gap between the retailer and law enforcement, ensuring the data is evidentially sound and clear. We must remember that retailers are in the business of selling, and any other activity including the management of retail crime must be complimentary to this goal.’ Zinc Synapse helps LP and risk leaders to make informed decisions at speed, to avoid unnecessary costly delays. With its user-friendly interface the platform has been designed to enable retail employees to capture and submit incident reports, leading to the consolidation of quality risk data, empowering retail businesses to resolve incidents and cases quickly, streamline communication and apply assurance activities to improve resilience.