Five finger discounts put a dent in new year retail profits, ARA warns

The start of a new year is the ideal time for retailers to review their security measures, says the Australian Retailers Association, which claims that theft costs the industry $7.5 billion a year.

In June last year, the ARA, in partnership with the NSW Department of Justice and Attorney General, launched an online training module dubbed “Preventing Loss and Financial Risk”.

Now that the Christmas sales period has come to end, the ARA is urging retailers to shift their focus to security.

According to ARA executive director Russell Zimmerman, the financial impact of loss due to theft in Australia each year is estimated at 3% of retail turnover.

The Australian retail sector is worth $243 billion, so it is estimated retail theft amounts to $7.5 billion annually.

In a bid to combat theft, the ARA is reminding retailers to take advantage of its free training course, which, according to Zimmerman, “puts retailers back in control of their stock”.

“[It will also] enable them to work to prevent in-store theft, understand the benefits of investing to deter theft and determine how loss impacts on financial performance,” Zimmerman says.

Zimmerman says while nothing has changed with regard to the training course, now is a good time for retailers to commence or revisit it.

“Most of us look at our businesses at the beginning of the year and think about what we’re going to do as we move forward,” he says.

“[The online training contains] all good reminders of things we should be doing.”

In addition to the risk that comes with trading online, Zimmerman highlights the theft of technology devices as another growing issue.

“I know there were some issues around technology retailers having difficulties with technological products,” he says.

“I don’t know whether that was particularly strong over Christmas because no one said anything to me about it. But in September and October, there were big issues with stores such as JB Hi–Fi.

“I would imagine that would have still continued into the Christmas period.”

Thieves from overseas are also posing a problem, Zimmerman says.

“It’s also important for retailers to be cautious when accepting returns and exchanges as savvy thieves in the US are using fake receipts or returning merchandise that was stolen or purchased with counterfeit money,” he says.

However, Zimmerman says there are “a lot of new products around” that aim to reduce theft.

“I saw a label that looked like an ordinary price ticket label. But when you looked very closely, it had a little wire running through it,” he says.

“There are so many new products coming out. You can now get a camera installed, which you can view on your iPhone.

“I think it’s important for retailers to review their systems, review their products and processes, but also review their actual security devices.

“Now is a good time to be doing it to ensure they’re prepared for the next 12 months.”

This article first appeared on StartupSmart.