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New Report Focussed on the Impact of New Technology on Loss

ECRA’s Loss Prevention Forum members, along with our academic partners have been undertaking an initiative titled ‘Staying Ahead of the Game - Managing the Impact of New Shopping Technologies’. The findings to date has been captured in a comprehensive report authored by Dr Emmeline Taylor, Convenor of Criminology and Senior Lecturer at the Australian National University, and supported by researchers from the University of Technology Sydney. 

The way in which customers select their purchases and pay for them is rapidly changing. As new technologies emerge onto the market, retailers and suppliers are facing the challenge of reconfiguring systems to accommodate increasingly mobile customers who expect multichannel options supporting quick and secure digital payment. 

Whereas Self-Check-Out redefined the retailer-customer dynamic, the introduction of mobile payment platforms is set to revolutionise the relationship between retailer and customer. Mobile scanning and mobile payment creates a ‘disconnect’ in the customer journey, presenting new challenges for those charged with preventing loss as the new technologies give rise for potential for ‘shrinkage’ attributable to fraudulent behaviours, malicious theft (both customer and employee), and non-malicious theft through customer or staff or system error. 

In discussion about the importance of the study Dr Taylor noted that, “The introduction of any new technology, service or process will generate a range of risks, vulnerabilities, security issues and training needs. Recognising the significant potential for loss, mobile payment processes must be safe and secure from the outset.  

“We saw this with the introduction of self-checkout in Australian retail. It is not entirely clear whether there has been a significant increase in the actual amount of loss, but we do know that self-checkout has increased the number of ways retailers suffer losses. We can expect similar hiccups with the introduction of new mobile scanning and mobile payment systems, as they potentially create a new set of shrinkage problems.” 

“In order to limit shrinkage, protect their profits and provide optimum service to their customers, retailers will need to pre-empt these issues and ensure that any potential security risks are anticipated and safety measures are put in place,” concluded Dr Taylor. 

The report builds a strong view of the various types of mobile selection and payment technologies and the business case for their roll out, before turning attention to the potential risks to loss and key considerations for retailers as they take up the technologies. The report also references key learnings from the introduction of self-check-outs through the 1990’s and early 2000’s. 

ECRA is currently investigating further opportunities to study the issues surrounding the implementation of new technologies and their potential impacts on shrinkage in greater depth and in doing so to provide additional insight to the retail industry to assist practitioners in their ongoing efforts to stay ahead of the game. 

The report can be ordered here