4 loss prevention strategies for your business
Did you know that the average business suffers a shrinkage rate of 1.6%? If your business’s losses are higher than this figure, you’re losing out on valuable assets that could affect your profit margins.
How do you identify losses within your business? And how do you prevent them?
Read on as we explore 4 loss prevention strategies to ensure your growing business has the resources to thrive and outshine your competitors..
Why Do Inventory Losses Occur?
Your inventory and resources can be lost due to the following management errors:
- Poor inventory management processes: When your inventory management is haphazardly disorganized and improperly managed, there is an obvious increase in the potential for shrinkage due to misplaced or miscounted items.
- Employee theft: If you don’t operate a technology-led security strategy and security awareness training, your employees could covertly steal inventory when working, leading to losses that you may never identify or address.
- External theft: If your building’s perimeter is not secure, unauthorized third parties could maliciously gain access to your facility and repeatedly steal inventory from your warehouse or store.
- Inventory damage: When you fail to stringently protect your valuable inventory in the event of a fire, flood, or disaster, there is the potential for inventory damage, and the items must be reduced or, unfortunately, scrapped.
Whether you’re operating in a retail or warehouse location, you’re immensely vulnerable to all of the above causes of losses. Leave them unaddressed, and it’ll seriously harm your business. This is why your business strategy should have a clear-cut and diligently crafted procedure for loss prevention.
4 Loss Prevention Strategies For Your Business
Now that we know why losses happen, it’s easier to approach these causes and eliminate them with investments to protect your inventory and business resources. Let’s explore how security, inventory management, and automation can help your loss prevention strategy.
Install Security Cameras
Security cameras are a powerful deterrent for employee, customer, and intruder theft on your premises. Placing cameras in obviously visible locations will ensure that anyone on the premises will be clearly aware they are being recorded and will make them less likely to attempt theft.
You can then easily review the surveillance footage from your retail security cameras to investigate any issues.
When you invest in a cloud-based security camera solution, this grants you the capacity to implement AI-automated threat detection. The AI tool will create automatic alerts based on behavior recognition to ensure your security staff doesn’t miss a beat. Since security staff won’t be able to keep eyes on your camera footage 24/7, this is the surest way to detect theft on your premises.
Implement Access Control
Access control ensures that staff-only and storage areas are kept private. The system operates using keycards, fobs, or even digital keycards stored on employee mobile devices.
Securing your storage areas with traditional key and lock systems is simply insufficient, as it means you will still be vulnerable to lockpicking. With an access control system, you can completely eliminate the potential for lockpicking while easily deploying keycards and fobs to onboard employees.
Automate Stock Counting
The stock counting process leaves much room for human error. If you’re not automating the process already, it’s time to make your stock count processes airtight.
Consider implementing RFID barcode scanning for your stock counts, ensuring items can only be counted once. When performing the stock count, all employees must do is scan all inventory barcodes.
If there are any discrepancies, a recount will not be necessary, and you can trust the data you have collected. By implementing this method, you ensure that you accurately spot inventory shrinkage regularly and reduce the potential for unnoticed theft or loss.
For more advanced security measures and customized AI solutions, consider hiring AI engineers to develop and integrate sophisticated AI systems tailored to your business needs.
Implement Inventory Management Software
Inventory management software is the perfect tool for managing goods in and goods out accurately, ensuring that no inventory can make its way in or out of your premises without being registered in your online database.
The tool will show you stock levels across all of your products and the location of these products in your storage facility. Should you go to retrieve inventory from a location to find it missing, this allows you to investigate the issue and address any concerns regarding theft or loss.
Summary
Losses and shrinkage are a huge concern within the retail and e-commerce industries, but this doesn’t mean that they cannot be addressed with the right strategy. Consider whether your existing inventory management and security procedures leave room for unnoticed inventory shrinkage. Also, consider how much your business could save should you address these issues as soon as possible.
