Stuart Lodge – The Future of Retail Security

 
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Monday, 5 December 2016

Stuart Lodge – The Future of Retail Security

Stuart Lodge, CEO of Lodge Service

Stuart Lodge, CEO of Lodge Service

In his latest blog for Infologue.com, Stuart Lodge, Chief Executive of Lodge Service, discusses how retail is changing and the industry’s future in retail security.

“Retailing will look very different in 20 years’ time, and the security industry had better be ready to respond to retailers’ new needs.

“Over the past two decades, we’ve seen two major trends. Firstly, the continuing decline of the high street and rise of out-of-town shopping. Second, in a bid to increase shareholder value further, retailers have demanded ever better security protection but at the same or even a lower cost.

“This has resulted in growing reliance on the presence of CCTV, with EAS to protect high value goods; whilst guarding has become generally a low-value commoditised service.

“Neither the retail nor security sectors have done themselves any favours in the race to the bottom in the tendering process. There has often been a failure to consider issues other than direct price comparisons for security services – issues such as the ROI (Return on Investment) on security, which represents the real cost and contribution of security to the ‘bottom line’.

“The tendering process has failed to account for ‘added value’ services. These can include control of HVAC (Heating, Ventilation and Air Conditioning), for example, which can be integrated within remote security monitoring to achieve real benefits in cutting overall operational costs.

“The current status of retail security is evident in the variable quality of protection, deterrence and detection, which is reflected in the annual BRC Retail Crime Survey.

“In 2012-13 the direct cost of crime to retailers was 166 per cent higher than in 2007-08, according to the latest BRC survey. Retailers suffered the highest level of theft for nine years too last year. Thefts per 100 stores increased 5 per cent on 2011-12.”

Retail is Changing

“So what changes are in store for retailers and how will the security sector have to respond?

“Far from declining into oblivion, it is likely that the high street will see a resurgence as shoppers seek out a richer ‘customer experience’. The quality of that experience will be a key competitive differentiator between retailers, along with the issue of price of course.

“Some shoppers will want to buy over the internet – but many others will still want to walk into a store and have ‘real-world’ interactions that they cannot get at home, when buying from a web site.

“This is the reason why destinations such as Westfield and department stores like the John Lewis group have prospered: shopping as a leisure experience, with the opportunity to have lunch or a coffee too, browsing different departments, in addition to completing the weekly shop.

Along with this trend, mobile phone technology is going to be central to retailing: as a method of purchase, for redeeming promotional vouchers, and of course for price comparison and product information.”

Store Detectives Operate Here

“There will be new demands on security protection – particularly when allied with the trend for criminals to become increasingly adept at identifying and countering security measures.

“Data at Lodge Service shows that thieves are more specialised and mobile in targeting shoppers, with teams of POS fraudsters, bag snatchers and pick pockets for example working their way around our major cities. Many are operating internationally.

“CCTV, EAS and other technology alone is often not able to counter the threat. It often requires teams of experienced store detectives to identify and understand the challenge. A trained detective has the mobility and means to work covertly with both the store guard and the available technology to counter the threat.

“This is particularly the case with staff theft, where it is often difficult to distinguish between legitimate and criminal activity from CCTV observation alone, for example

“Store detectives are often considered to be an expensive overhead – but that is wrong. Data at Lodge Service shows that their work in detection and recovery produces an average of 40 per cent ROI (Return On Investment) on contract costs through goods recovered and civil recovery proceedings in Court.

“Civil recovery shows a very low repeat offender rate too. Criminals move on to easier targets when store detectives are operating.

Covert, effective security protection is important in protecting the ‘customer experience’ and therefore the retailer’s brand. Just as the threat of crime drives customers away, so also does guarding that is seen as being ‘heavy-handed’.”

The Intelligence Centre

“Over the next 20 years, retail security will further develop a high-tech, intelligence-led component. The key to cost-effective security with optimal ROI is to have the best information available centrally, and then to use it efficiently.

“Only then can managers understand and cost security threats and remedies – to develop operational and contingency plans that are proportionate and timely.

“The ‘intelligence centre’ will be the central hub for gathering and analysing security data from multiple retail or corporate sites. Security staff and resources can be deployed faster, on a daily basis, in response to new threats. Also emergency teams can be managed and monitored, whether as a result of security incident or a lift or other service breakdown.

“The intelligence centre will manage a range of on-site services too, from HVAC and lighting, to refrigeration and out of hour’s access. Business analysts will work alongside security staff to process and interpret data on footfall and customer choices. This is happening now.

“It has a key role too in ensuring that the relevant safeguards to protect business processes are in place and in use – security audits, test purchasing and compliance checks.

“Lodge Service’s own data shows that criminality, particularly amongst staff, results most often when agreed security procedures are not applied. The key is to protect the full sales cycle, from delivery to POS, from all threats, whether by dishonest customers, staff or terrorists.

Cybercrime will continue to pose a challenge in the retail sector, but mostly for customers’ own transactions. Again, if procedures are followed by retailers, and then compliance checked, the danger for retailers recedes.”

Rise of the Specialist

“The role of the intelligence centre to monitor, analyse and respond to threats requires a range of staff with specialist skills: security, property services, business analysis, cyber security and retail marketing too, to make use of valuable data on footfall and customer behaviour.

These trends will see the rise of teams of specialists in security, offering retailers a valuable resource that has an active role in ensuring a better customer experience, reduced costs and higher revenue and margins.”

Lodge Service Website

Opinions expressed by contributors and commentators do not necessarily reflect the views of Infologue.com or Interconnective Limited.


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