The retail and wholesale industry is consistently battling challenges like theft, fraud, and operational inefficiencies, which can pose significant impacts to the bottom line. To stay competitive and mitigate these losses, Info-Tech Research Group explains in a new industry resource that organizations are increasingly adopting cutting-edge technologies such as AI, machine learning, and advanced surveillance systems.
In response to these needs, the global research and advisory firm has published its latest blueprint, AI in Retail & Wholesale Loss Prevention.
"AI has had a transformative impact on retail and wholesale. Advanced analytics and insights offered by AI provide retailers with an unprecedented level of understanding of in-store and warehouse activities," says Shreyas Shukla, principal research director at Info-Tech Research Group. "The adoption of AI-based solutions is a necessary step toward survival and profitability in the competitive retail landscape."
Info-Tech's blueprint details the pressing need for the retail and wholesale industry to adopt various technologies to address its current challenges. However, integrating technologies like AI with existing systems and infrastructure can be complex and resource intensive. Moreover, this integration raises privacy concerns and ethical questions about surveillance and consumer rights, which can lead to issues with legal compliance.
The significant investment required for advanced AI systems can also pose a barrier, particularly for medium and small enterprises. With these challenges in mind, the firm recommends that the industry make immediate technological advancements to remain competitive in today's environment.
"Ethical concerns regarding privacy and the potential for false positives in AI-based systems necessitate a careful and responsible approach toward implementing these technologies," explains Shukla. "However, it's undeniable that AI is revolutionizing retail and wholesale loss prevention, serving as a game changer that enables retailers to address threats before they result in significant losses."
Retailers are increasingly exploring and implementing these advanced technologies, such as AI-driven facial recognition, feature matching, behavioral analytics, and vision systems, alongside traditional electronic article surveillance (EAS) systems. AI is gaining traction in the industry, offering new ways to enhance security and reduce losses.
AI in Retail & Wholesale Loss Prevention outlines a comprehensive loss prevention framework for the retail and wholesale industry, consisting of ten key steps:
- Assess the current loss prevention status.
- Set clear loss prevention goals.
- Understand the risks associated with the retail environment.
- Invest in employee training and awareness.
- Implement physical security measures.
- Leverage fit-for-purpose AI and technology solutions.
- Use advanced data analytics to gain insights.
- Collaborate with external partners, law enforcement, and security experts.
- Develop a structured response plan for incidents.
- Ensure compliance and ethical considerations.
The firm's recent research underscores the significant potential of AI in loss prevention. By leveraging AI to analyze real-time video feeds, retailers can detect suspicious behaviors and alert staff promptly, effectively reducing shoplifting and theft. Furthermore, AI can optimize operational processes, minimizing errors and enhancing overall efficiency.
