Loss prevention in a mobile POS environment

As mobility is one of the hot topics at today’s Retail World conference in Melbourne, I thought it might be timely to share with you some excerpts from a recent blog by Tyco Retail Solutions’ Vice President Tony D’Onofrio.

In the blog, Tony’s looks at Walmart’s extended adoption of its ‘Scan & Go’ iPhone app, which essentially hands cashier responsibilities over to the customer. Using their smartphone, shoppers scan barcodes of products as they put them into their trolley. When the shopper has completed their shopping, the app generates a custom QR code. The shopper then takes this QR code to a self-checkout terminal where they select a payment option and complete the transaction before departing the store.

Walmart isn’t the first retailer to abandon the cash register. Other US retailers such as Aeropostale, Saks Fifth Avenue and Urban Outfitters also provide mobile devices or apps to their customers and store associates to improve and/or simplify the shopping experience. We’re starting to see some retailers in Australia consider mobile POS technology too. But what are the ramifications for loss prevention?

At this point, I’ll hand you over to Tony:

The rise of mobile solutions and the sources of shrink raise a substantial number of questions for the loss prevention profession:

What happens when the customer is the cashier and / or all the associates in the store carry mobile devices that allow them to instantly check out customers?How do you secure a mobile POS transaction?Will shrink increase with mobile POS?How do the basics of store operations in handling a customer POS transaction get addressed when the retailer is not involved in the checkout process?How do you handle all those devices that today are located in a stationary POS station?How do you verify at the exit that a customer has actually paid for that item using a mobile device?How do you handle the distribution of shopping bags?How do you prevent item switching, i.e. scanning and paying for a lower cost item, but substituting it with a higher cost similar item?

To answer some of these questions, a US research company published a number of ideas that retailers should consider for loss prevention in a mobile POS environment. Some of these ideas included:

New methods to deactivate electronic article surveillance tags. According to Aberdeen research, 74% of retailers continue to adopt EAS tags to curb internal and external theft. Unlike stationary cash wraps however, mobile solutions don’t have deactivation stations. And associates need at least one hand to hold a mobile device. Chains might want to consider developing a handheld mobile app or handheld attachment that enables associates to deactivate security tags;Expanding the range of closed circuit television systems. Aberdeen research indicates that 76% of retailers use CCTV video surveillance focused on POS check stands and nearby perimeters — a solution that delivers real-time visual footage and analysis of shoplifting and internal theft. Since mobile transactions can happen anywhere in the store however, retailers should consider repositioning CCTV systems to monitor all activity happening store-wide;Arming store managers with tablet computers. As the breadth of CCTV landscape is expanded, managers need to stay abreast of what those cameras see. By incorporating tablets linked to CCTV systems, they gain a near-real-time birds-eye view of activity caught by CCTV cameras.

The above ideas provide a sensible start. To succeed in the future mobile environments, retailers must also consider:

Working with loss prevention technology companies in driving greater network integration of existing security solutions. Connected devices lead to a smart more secure store.  The connectivity of security devices can be leveraged to further secure the mobile environment through both data and visual intelligence.Loss prevention professionals need to partner with operations and information technology departments to provide integrated security solutions for the mobile store environment.  EAS, RFID, IP video, and video analytics are sample technologies where greater cooperation and integration will lead to new solution sets that can reduce shrink, even in a more mobile store environment.Those supercharged iPads and iPhones, are likely to walk out of stores, if they are not secured.  Consider protecting these mobile devices today with EAS in the near future with RFID.The mobile shopper is also typically more connected and more likely to leverage social media to express their views on instore customer experiences.  Retailers need to balance security with the customer experience, knowing that a negative customer experience can go viral through social media.

As new loss prevention concepts to address a more mobile store environments are still in the early stages of development, I will come back to this topic in future blogs.  Undeniably, the future of retail will include omni-channel driven mobile customer experiences.  Progressive retailers will realise the full potential of these technologies by making sure that loss prevention is a key partner in securing mobile transactions, reducing shrink and improving overall store profitability.

Tony D’Onofrio is Vice President, Global Accounts and Source Taggging at Tyco Retail Solutions. You can subscribe to his blog at http://tonycdonofrio.blogspot.com.au/

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