Every year shrink in retail costs businesses billions of dollars. This is caused by many things including theft, shrinkage due to lack of inventory flow, and errors made by customers. There are simple solutions for shrink reduction that can be taken on the front-end or back-end of a business. One solution is using video technology to reduce shrink in retail stores. In this article, we will discuss how video can help you reduce shrink in your store!

What is Retail Shrinkage and Why Does It Happen?

Retail shrinkage is the difference between what was expected to be sold and what was actually sold. It can be caused by many different things, but the most common reasons are theft, loss due to poor inventory flow, and customer errors.

Inventory shrinkage costs businesses billions of dollars every year. This lost revenue could be used to improve the bottom line, increase employee wages, or invest in new technology. While shrinkage can't be eliminated entirely, there are many ways to reduce it using both front-end and back-end solutions.

Why Video Can Help Reduce Shrink in Retail?

Video can be used to reduce shrink in retail stores for a variety of reasons. The most common way is by deterring crime and thievery within the store itself. By having video surveillance, you increase your chances of catching shoplifters and stopping them before they steal from your business.

Another reason why video reduces shrink in retail is because it can help you improve inventory flow. With accurate, real-time data on stock levels, you can make better decisions about what to order and when to reorder products. This will help reduce the amount of shrinkage caused by lack of inventory flow.

Finally, video can also help reduce customer errors. By having a visual representation of what is available in the store, customers are less likely to make mistakes when picking out items. This will help reduce shrinkage caused by customer errors.

Examples of How Retailers are Using Video to Improve Inventory Flow and Reduce Shrinkage

There are a number of different retailers who are using video to reduce shrink in their stores. Walmart is one of the largest retail chains in the world and they have been using video surveillance for many years. They have over 5000 cameras in their stores, which helps them catch shoplifters and improve inventory flow.

Here are some more specific examples of how you can utilize video analytics in your retail business.

Front-End Solutions for Reducing Shrinkage

There are several things that businesses can do on the front-end to reduce shrink in retail. One of the first steps you should take is to set up a video surveillance system that monitors your entrances and exits, as well as areas where shrinkage occurs most often (i.e., cash registers).

You can also link the video technology to the POS system to make synchronous evaluations of POS movements and video images possible. This allows inventory or cash register discrepancies to be effectively clarified. Via Smart Data Search, targeted searches can even be done about specific products or article numbers.

For example, you can detect if the cashier scans only one item but hands over several products to the customer.

The second step is to have managers who are trained on how to identify potential shrink issues before they happen using data from the video system. This will help them catch shrinkage issues early on and make corrections before they occur, which reduces the cost of shrink in retail.

Back-End Solutions for Reducing Shrinkage

Many businesses are also taking steps to reduce shrink by making process improvements back-end as well. One example is to use visual analytics software to help them identify shrinkage trends. With this information, they can make changes that reduce shrink in their stores without incurring expensive labor costs for employee training.

Another solution is to use inventory scanning technology which automatically detects stock levels of items within the store and reduces shrink caused by poor inventory flow. These are just two examples of how businesses can use technology to reduce shrinkage and improve their bottom line.

The Future of Inventory Management Using Video Technology

Video analytics can be used for a variety of purposes in retail stores that help businesses improve the customer experience while also reducing shrink issues. Some examples are deterring shoplifting, preventing errors by customers, and identifying shrinkage trends.

With the increasing use of video analytics in retail stores around the world, there are a number of new ways that businesses can improve shrink management. One major development is facial identification software which will allow retailers to identify repeat offenders who have stolen from them before or shoplifters that they may not have caught on video before.

The bottom line is that shrink management in retail stores is an extremely important issue for businesses everywhere. Using video analytics can help you reduce shrink through better inventory flow and identifying shrinkage trends before they occur.