Over the past few years, retailers have struggled to get a handle on organized retail theft, which costs retailers as much as $5 billion annually. While there are various vendor solutions to detect and prevent retail theft, these products don`t work together, leaving loss prevention managers on their own islands of information with few opportunities to track theft trends with one another.
Now, the National Retail Federation is rolling out a web-based database that will allow retailers and law enforcement to share organized retail theft information and intelligence, bridging the gap between retailers` various in-house systems.
Vendor solutions typically don`t offer the information-sharing mechanisms that the NRF`s network offers, says Addison Chan, vice president of business development and loss prevention for Triversity Inc., which sells its own loss prevention systems. "There have been some private initiatives to address some of the requirements here but this network is more of an open source approach," he says.
The NRF began phase-one testing of the Retail Loss Prevention Intelligence Network Database in mid-July. Five pilot retailers--with a national presence and representing different sectors--began using the system in mid-August and more users will be added this month.
The network is funded by the NRF and retailers pay monthly subscription fees of a few hundred dollars, says Joseph LaRocca, NRF vice president of loss prevention. That allows them to enter data into the system and to query data that`s already in the database. NRF thus far has invested $100,000 in the network.
Just how widespread organized retail theft is can be seen in the results of a May NRF survey of 41 senior loss prevention executives nationwide: 78% said their companies had been a victim of organized retail theft in the past 12 months and 46% reported an increase in organized criminal activity over the past year.
In addition, 61% said that organized retail theft accounts for the majority of the external shrinkage dollars. More than half said they are allocating additional resources to address the problem.
What`s more, 29% categorized organized retail theft as a significant or severe threat to their companies and another 44% classified it as important. 98% of the executives polled said there was a need for a national database designed specifically to track organized retail theft. "The database is one of the next big steps retailers need to take in helping to protect our customers and businesses against organized retail theft," says a Sears Holding Inc. spokesman.
The Retail Loss Prevention Intelligence Network Database is the NRF`s response to that need.
The NRF is patterning the database on the National Crime Information Center, a computerized index of criminal justice information operated by the Federal Bureau of Investigation. The NCIC collects such information as criminal record histories, fugitives` names and aliases, and lists of stolen properties, and is available for use by federal, state and local law enforcement.
"RLPIN will do the same thing for retailers," LaRocca says. The database will hold information entered by retailers on organized retail theft incidents--such as burglaries, robberies, or gift card fraud, he says. Other retailers and law enforcement agencies will be able to access the information to use in their investigations.
The network`s value lies in its ability to link separate crimes in different stores and locations that have similar characteristics. For example, it could link the data on burglaries of large numbers of laptop computers from three different retailers in three different states, LaRocca says. "Retailers can look at that trend and see there`s a spree of somebody stealing laptop computers," he says.
Without the network, retailers would file reports with their local police and the police would treat them as single incidents within their jurisdictions, LaRocca says. "RLPIN allows them to cross over those jurisdictions and look at it as being a felony that`s occurred in multiple cities, even multiple states," he says. "They now can investigate it as an organized retail crime incident so they can go after these guys with multiple resources."
Linking the crimes also makes it more likely that law enforcement will pursue the case, LaRocca adds. He notes that police have limited resources and may not launch a full-scale investigation into a single burglary or robbery. "But when retailers can put the information together for the law enforcement agency, it`s more likely to help because we can clearly establish the trends and the additional losses," he says.
The AI approach
The NRF initially will be using artificial intelligence to analyze trends and identify where problems exist, LaRocca says. The system then will send e-mail notices to retailers who have expressed interest in receiving information about certain types of crime, he says. Retailers then can pass the information to law enforcement.
"In the future, we`re looking at the establishment of a group that would do that sort of analysis and then work with the retailer, the retail sector involved and law enforcement agencies in the region that would have a vested interest in the information," he says.
Retailers can enter information into the database via a web browser or they can import it from their existing case management systems, LaRocca says. No special software or hardware is needed.
"Without the Internet, it would have been more complicated and more expensive," he says. That`s because the NRF would have had to use a dial-up system to feed information into the database or lobby the government for access to such technology. "The Internet makes this a lot easier for us to execute in the private sector," LaRocca says.
NRF also is developing a data entry system in which information can be entered on a form offline and then uploaded into the database.
The NRF has been using web desktop sharing to demonstrate the system to retailers, and will use the same technology to give retailers hands-on training, LaRocca says.