In recent years, Organized retail crime (ORC) has emerged as one of the critical challenges for the US retail industry. Many small and leading retailers are falling victim to major thefts and shoplifting cases. They suffer economic losses, erosion of customer trust, and low employee morale, among other issues. From cargo thefts to flash robberies to organized crime rings, the landscape of ORC continues to evolve. Why does this issue require a serious though?

Let’s look at some numbers that will help you understand them better.

  • According to the National Retail Survey 2023, retailers reported $112.1 Billion in losses in 2022. These losses were driven by retail crimes, including thefts as part of organized retail crime (ORC).
  • Thefts conducted inside and outside the retailer’s stores account for 70% of all the losses.
  • According to a survey by Business Org, 89% of small-business owners in the US experienced shoplifting due to organized retail crime (ORC) in 2021.
  • During holiday or other peak seasons, 54% of small business owners have reported thefts from their stores. Among those affected, 25% of small-business owners have reported shoplifting every week and 23% daily.
  • In 2020, another National Retail Federation (NRF) survey reported that organized retail crimes (ORC) have cost large retailers over $700,000 per $1 billion in sales.
    All these numbers and the publicized reports have driven the retailers to address the threats that ORC poses. This post discusses the ORC, its impact on retailers, and how retailers invest in various anti-security measures to help prevent theft in retail stores.

ORC: A Few Important Things You Must Know

 Organized Retail Crime (ORC) refers to cargo theft, shoplifting, and other organized crimes conducted by criminal gangs. These crimes are performed with the intent to convert obtained cargo, cash, and merchandise into monetary gain. The stolen merchandise or cargo is sold unsuspected customers online, in flea markets, or sometimes legitimate retail channels. Monetary gains fuel other dangerous or illicit activities, such as human smuggling, drugs, guns, and so on.

According to the National Retail Survey 2023, ORC groups target several items, including:

  • Accessories
  • Clothing
  • Electronics
  • Food and beverage
  • Footwear
  • Health, beauty, and personal care items
  • Home furnishings and home improvement items
  • Infant care items
  • Fuel, gift sets, trading cards, toys, and so on

How ORC Impacts Retailers

Here are some ways in which ORC may affect retailers.

  1. Financial losses: This is the most visible effect of ORC. Economic losses occur primarily due to stolen goods, also referred to as inventory shrinkage. NRF reported an estimated $112 billion loss due to shrinkage in 2022. Target reported $500 Million in damages due to shrinkage in May 2023. In addition to these, retailers also incur losses through damaged property or equipment, legal fees, and crime investigations.
  2. Store Closures: Instances of ORC can negatively impact a store’s reputation. Criminal gangs usually target high-profile retailers, and news of these attacks can lead to media coverage, affecting the store’s image. Many retailers are forced to shut down their stores in response to ORC. For instance, in 2023, Target, a retail giant, with more than 2,000 stores in the US, announced closing down its nine stores across major cities due to escalating instances of organized retail crime. Target has closed its stores in Portland, New York, San Francisco, and Seattle. In 2020, 20 retailers have closed their stores in San Francisco due to ORC. Some examples, included a Nordstrom Store and a Whole Foods Market Store.
  3. Low Customer Morale: News of theft and violence may deter customers from entering into stores due to safety concerns.
  4. Increased Security Costs: ORC drives retailers to invest in advanced security measures, increasing their operational costs. The NRF Survey 2023 found that 42% of retailers assigned more resources to mitigate the risks of ORC, 34% increased their payroll to support their risk prevention efforts, and 45% relied on third-party security personnel as a prevention measure.

Six Security Measures Retailers Can Take to Reduce ORC

Retailers are implementing several security measures to overcome the risks of ORC. The following are some of them.

  1. Protect High Value Merchandise: Whether it be tethered, bolted down, rotatable, etc.. securing your high value electronics is a sure way to combat ORC
  2. Mobile Parking Lot Surveillance Cameras: As the name suggests, these surveillance units are installed in parking lots. They help security staff at retail stores to monitor potential ORC activities and put bad actors on notice. The 2023 NRF Survey stated that 18% of survey respondent retailers have already implemented mobile parking lot surveillance systems and 10% may implement it by 2024. However, another 19% are considering the technology for their premises.
  3. Facial Recognition Technology: Cameras with facial recognition technologies are installed at strategic locations such as exits, entrances, as well as critical areas within commercial properties. These systems help retailers identify shoplifters in the store and take immediate action. The NRF Survey in 2023 indicates that 3% of retailers have implemented this technology and 40% of them are currently piloting, researching, or implementing other technologies.
  4. Electronic Article Surveillance (EAS): These security systems use sensors and tags to prevent theft at a store. EAS systems will trigger alarms if anyone tries to exit the store without deactivation. According to the NRF Survey 2023, this is one of the most popular anti-theft technologies implemented by retailers.
  5. RFID Tags: These radio frequency identification (RFID) tags use radio waves to transmit as well as store information for identification and tracking purposes. RFID tags serve two purposes – you can use them as preventive measure to thwart theft and to track stolen items. According to the NRF Survey 2023, over 33% of retailers were considering this technology, 17% have already piloted or tested RFID; 39% are testing RFID tagging, and 31% are testing or implementing RFID for their benefit denial capabilities.
  6. Locking Display Cases: Retailers use locking display cases with physical locks to display some high-value and easy-to-carry merchandise such as mobile phones, tablets, magic keyboards, and so on.

 As we navigate the challenges of ORC, the role of the above discussed anti-theft protection measures in enhancing the security of retail locations cannot be understated. When strategically implemented, these systems will equip retailers to respond to threats swiftly, prevent crime, and secure their merchandise, people, and premises effectively.

Scorpion Security Products is committed to help retailers avoid instances of ORC without obstructing the shopping experiences for customers. Scorpion has been revolutionizing retail security for over a decade. Today, we can proudly say that more than 2,280 retailers have trusted our solutions to protect their merchandise, people, and above all - secure their customers’ trust! Contact Scorpion Security Products today and take the first steps towards ensuring retail safety with our unique anti-theft devices. Our team of experts are ready to answer your queries and offer you the right suggestions.