A report released by Australian supply chain industry body Efficient Consumer Response Australasia (ECRA) has highlighted the significant security challenges for the grocery industry stemming from smartphone technology.
The commissioned research conducted by the Australian National University has examined how the transition to mobile scanning and payment increase the risk of significant impact on levels of stock losses otherwise known as shrinkage.
Experts from the University of Technology Sydney’s Designing Out Crime research centre and from the Australasian retail industry have worked with researchers to provide insight into this rapidly emerging area of retail development.
Building in security
John Cawley, who commissioned the study for ECRA, said the report underscores the “critical importance of building effective security and resilience into new retail systems to minimise theft, and accidental removal of goods from outlets”.
Emmeline Taylor, Senior Lecturer and Convenor of undergraduate Criminology at the ANU, added: “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.”
Retailers 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, the research found.
"Shrinkage costs the Australian retail industry over $2 billion dollars annually. Shoplifting is estimated to be the main cause with a 45% value share in 2012, followed by employee theft and admin and non crime losses,”Taylor continued.
“New processes and practices including fraudulent activity, theft and security breaches not only impact the bottom line but can have devastating impacts on customer confidence."
“There is no room for trial and error as characterised the introduction of self-service checkout; the risks are too high.”
In order to limit shrinkage, retailers will need to pre-empt these issues and ensure that any potential security risks are anticipated and safety measures are put in place, the researcher advised.