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Month: February 2024

Combating retail shrinkage: How technology can help

Posted on by siteowner

In the rapidly evolving retail landscape, technology stands at the forefront of innovation, driving transformative solutions that redefine the shopping experience. As a result, the global retail industry is embracing rapid digital transformation in response to constantly evolving consumer demands, improving customer interfaces, and fostering innovation.

Yet, it is equally important to pay attention to a significant challenge that the retail industry is struggling to mitigate:  the issue of shrinkage. The pandemic marked the beginning of retail shrinkage, and the industry has seen a downward graph since then. The average shrink rate grew to 1.6% in 2022, up from 1.4% in 2021, according to NRF’s 2023 National Retail Security Survey.

Technology offers interesting solutions to work around the pressing issue of shrinkage that is plaguing the retail industry.  Let us delve into the challenge in detail and examine how modern technologies are equipped to address this effectively.

What causes retail shrinkage?

While there are multiple types of shrinkage in retail, the top reasons include operational losses, theft, shoplifting, return frauds, and employee theft, with Organized Retail Crime (ORC) topping the list. ORCs are a type of theft organized by a large-scale group backed by a criminal enterprise and accounted for a shocking 78.1% shrinkage in 2022, according to NRF’s survey. ORCs are also one of the major causes of violence in the retail industry, proving to be a risk for employees and customers alike.

It is not only the small or mid-sized outlets, but, retail shrinkage has impacted many retail giants as well. For example, Target, one of the biggest retailers in the US, has recently announced closure of nine stores, citing shrinkage as the primary reason. Many other retailers, including Dollar Tree, Home Depot, and others, have raised their concerns, citing retail shrinkage as a top concern.

How retailers can address shrinkage with technology

Digital transformation is at the forefront of retail innovation. With cutting edge technologies such as Artificial Intelligence (AI), automation, cloud computing, and data analytics, retailers can create a more agile, efficient, and resilient supply chain that will support the demands of today’s consumers. Let’s take a closer look at how retailers can leverage these technologies:

Retail supply chain visibility is crucial for retailers to make informed, data-driven decisions. By utilizing sensors, Internet of Things (IoT) devices, and data analytics solutions, retailers can seamlessly achieve visibility. Such data-driven insights enable retailers to track inventory levels, shipments, and production processes, which ultimately helps in improving resource allocation and mitigating risks. Additionally, digital collaboration platforms help connect with suppliers, distributors, and other partners in real-time making communication, data sharing, and collaboration effortless. By embracing IoT solutions, retailers can minimize retail shrinkage while gaining more visibility, becoming more data-driven, and increasing agility. Some of the best examples include retail giants like Nike and Zara, which have implemented RFID (Radio Frequency Identification) technology to maintain their inventory accuracy. RFID tags enable real-time tracking and minimize overstock and stockout situations, which are one of the reasons for shrinkage, thereby reducing retail shrinkage.

Computer vision is playing a key role in addressing shrinkage with respect to fraud or threats. This technology uses AI to recognize the posture of a buyer, correlate it with the transaction, and identify instances of “sweathearting” – instances where the customer fails to scan products or manipulates the price, thus raising real time alerts. Computer vision applications in retail use ML-based algorithms to discover consumer behavior, identify patterns, and make informed decisions on these inputs. One of the most prominent use-cases of computer vision is to detect unusual crowd movements, security breaches, and unauthorized access to enhance store safety and protect both employees and customers. Best Buy, a multinational consumer electronics retailer, uses computer vision to detect fraudulent returns. The system can identify patterns and anomalies, such as returning a large number of high-value items without a receipt or returning items different from what was purchased. The AI-powered computer vision technology marks these returns and prevents them from being processed.

Leveraging technologies to address retail shrinkage requires expertise

Leveraging technology solutions to address retail shrinkage is easier said than done. One of the most prominent hurdles to this approach is revenue leakage in retail. Revenue leakage is the potential loss of revenue due to inefficiencies, errors, and fraudulent activities within operations. Furthermore, the costs associated with implementing new technologies often become a hurdle. The initial investments in software and digital infrastructure, along with maintenance and upgrades, can potentially become a burden for smaller retailers on budget.

When it comes to implementing new technologies, integration with the existing systems becomes a critical consideration. Ensuring the compatibility of old and new technologies requires time and expertise, which can further complicate the process.

The retail industry is also one of the top industries that collects vast amounts of data, thereby making data privacy and security a critical challenge. Retailers must go above and beyond to safeguard sensitive customer data and ensure compliance to maintain trust and integrity, as it can otherwise negatively impact the customer experience.

Lastly, any digital initiative requires extensive training programs and cultural shifts for successful outcomes. Managing such transitions with the support and engagement of employees can prove to be challenging.  Addressing such challenges requires a strategic approach, including meticulous planning, domain expertise, and tailored solutions that meet the business’ needs. Partnering with experts is crucial for retailers looking to leverage technology solutions to minimize retail shrinkage.

InfoVision is at the forefront of empowering retailers to navigate and overcome real-world challenges through innovative technology solutions. Our expertise spans across cutting-edge technologies such as computer vision, machine learning, and RFID, enabling us to offer a transformative approach to mitigating retail shrinkage. By integrating advanced computer vision, we elevate surveillance capabilities, while machine learning facilitates predictive analytics to foresee and mitigate potential threats. Furthermore, our use of RFID technology ensures precise inventory management, collectively forming a comprehensive strategy to fortify retailers against shrinkage. Through our retail and innovation services, we empower retailers to improve their innovation potential, flexibility, and scalability to leverage emerging technologies and sustain business growth. Our team of experts has helped many large retailers pave their way for closer brand-consumer relationships, strengthen trust, and minimize revenue leakage, thereby controlling retail shrinkage.

Embracing technology for retail revolution

Modern retailers are increasingly leveraging technology to solve their business challenges and gain a competitive advantage. In the era of instant shopping, eCommerce, and more, retailers must integrate technology solutions into their processes to gain more visibility and data-driven insights to make informed decisions and combat retail shrinkage. From inventory management to demand forecasting – the sky is the limit for technology.

To learn more about how you can leverage the power of technologies to reduce retail shrinkage, connect with us digital@infovision.com today and learn how we can help you stand differentiated and grow revenue.

Navigating the cyberthreat landscape: A blueprint for transformation

Posted on by siteowner

In recent years, the landscape of cyber threats has dramatically transformed. As smart devices proliferate, the internet’s expansion mimics a wildfire, perpetually serving as a fertile ground for emerging threats.  Ransomware is indeed a major concern for organizations, especially smaller and less-protected ones, accounting for 72.7% of the cyberattacks in 2023. Trends indicate cyberattacks focusing on data theft and ‘extortion-only’ campaigns. For instance, the MOVEit or GoAnywhere attacks from 2023 refrained from using encryption-based ransomware, instead demanding extortion payments to prevent the disclosure of stolen data. According to Emisoft’s research, US-based organizations made up 83.9% of known MOVEit corporate victims, with Germany, Canada, and the United Kingdom following. Another notable instance of a ransomware attack was the breach that Hatch Bank experienced as a result of the GoAnywhere vulnerability. This served as a stark reminder of the real-world repercussions, affecting customer data and raising widespread concern.

Such examples highlight an evolving trend in cyberattacks, emphasizing the need for increased vigilance and robust cybersecurity transformation across all domains. ISG (Information Services Group) cybersecurity insights acknowledge that a significant portion of the SMB market is closely connected to large corporations, directly or indirectly, as part of a broader supply chain. Consequently, it is essential for SMBs to invest resources in implementing appropriate security measures to mitigate vulnerabilities, address control gaps, and establish robust policies.

Despite the trends, there is a noticeable difference in the approach and organizations’ investment levels within the market, reflecting the varying degrees of digital transformation between large and small organizations. Consequently, the method of identifying cybersecurity challenges and the subsequent efforts to establish a secure environment largely align with the digital maturity of the enterprise, regardless of its size.

Top challenges in addressing the complexities of cybersecurity

Businesses face critical challenges in recognizing threats originating from unprotected devices and endpoints, vulnerabilities in applications and software, cloud misconfigurations, legacy infrastructure, and internal risks. The costs of data breaches are rising steadily due to missed opportunities, regulatory fines, and investigations. For instance, healthcare breaches averaged nearly $11 million in early 2023, up 8% from the previous year. Cybercriminals target weak links in supply chains, expecting software supply chain cybersecurity attacks to compromise identities and data.

Organizations need to move beyond perimeter security to ensure partners meet security standards. Open-source software and cloud adoption introduce new risks, with threat actors exploiting vulnerabilities. Furthermore, digital transformation investments increase vulnerabilities, with over $10.54 million IoT security risks reported in December 2022 alone. Complying with government regulations and sanctions is a challenge by itself, which requires maintaining compliance with often complex and evolving standards, potentially resulting in increased operational costs and limitations on business operations to avoid penalties. For example, the US Securities and Exchange Commission (SEC) introduced a cybersecurity strategy in 2023, which underscores the recognition among C-level executives of the importance of security risks and the need for enhanced transparency in addressing breaches and threats. 

The growth of technology also presents challenges for cybersecurity professionals and contributes to high employee attrition. Investments in digital technologies like IoT, AI, and ML have introduced increased, often unnoticed vulnerabilities in recent years. IoT adoption has expanded endpoints, leading to visibility challenges and susceptibility to attacks due to non-standard protocols and limited security integration. Furthermore, IoT invites concerns such as open source software, unpatched vulnerabilities, APIs, and weak password protection. This proliferation not only facilitates large-scale DDoS (Distributed Denial of Service) attacks but also heightens risks to critical infrastructure, with potentially severe financial and socio-economic consequences. Other trends, such as investments in remote work infrastructure, expand the enterprise perimeter and limit visibility across devices and applications, adding complexity to security efforts.

Many organizations also face challenges in aligning their CISO’s (Chief Information Security Officers) strategic security planning with overall organizational goals. ISG has identified specific hurdles, such as budget constraints, exacerbated by recession fears, that limit defenses against increasing cyber threats. Many CISOs struggle to allocate sufficient funds for effective security solutions and cybersecurity talent gap solutions. Lastly, operational challenges like work overload from alerts and technologies, complicated management by legacy systems, cloud misconfigurations, or the overarching need to adapt to emerging threats often overwhelm security teams.

How can organizations limit the attack surface?

Organizations that have robust cybersecurity measures prioritize business resilience in cybersecurity to withstand threats while maintaining trust, accountability, and customer experience. They invest in identifying and addressing vulnerabilities tailored to industry-specific risks. Key strategies include adopting the Zero Trust Security framework, SASE (Secure Access Service Edge), conducting rigorous risk assessments, and engaging in continuous monitoring, penetration testing, and red team simulations.

Suggested Read: The zero trust model: “trust no one” approach to cybersecurity

The “never trust, always verify” principle within the framework addresses various aspects such as perimeter-less enterprises, mutual authentication, explicit scrutiny, continuous monitoring, and network micro-segmentation. Implementing this framework necessitates a deep understanding of current security solutions and phased investments to consistently deploy relevant security measures tailored to the organization’s needs. Stricter vendor assessments and proactive prevention efforts complement robust response and recovery plans. Enterprises aim to conduct ongoing risk assessments and periodic audits across various domains, encompassing changes in business strategy, supply chain, M&A, and financial exposure. Additionally, resources are allocated to regularly conduct vulnerability scans and penetration tests to uncover insecure access points that may elude security analysts’ detection. CISOs collaborate with providers equipped with red teams to simulate advanced cyberattacks, gaining insights into vulnerabilities, weak access points, and potential pathways for adversaries to exploit sensitive data or disrupt networks. By addressing compliance, user experience, employee well-being, and customer assurance, innovative, user-oriented training supports employee awareness training in fostering a cybersecurity-centric culture.

Suggested Read: Red teaming: The future of cybersecurity preparedness

CISOs must prioritize solutions aligning cybersecurity transformation efforts with enterprise objectives, educating on cybersecurity risk management for resilience. Investments must be made to target specific industry threats, simplifying tools, and leveraging integrated suites for tailored risk management. Adopting automation and AI can greatly enhance threat detection, while managed services can address talent shortages. Prioritizing integration with existing tools or suites featuring extended detection and response capabilities will ensure smooth operations.

Partnering with domain experts like InfoVision enables businesses to seamlessly build robust cybersecurity strategies tailored to their business needs. InfoVision’s Enterprise Cybersecurity and Risk Services (ECRS) is a specialized cybersecurity practice that enables our customers to address their cybersecurity issues and enhance their cybersecurity transformation posture. The ECRS encompasses various capabilities, including GRC (Governance, Risk, and Compliance), SVS (Security Vulnerability Scanning), ISS (Integrated Security System), and IAM (Identity and Access Management) with Cross-Skilled Resources.

Cybersecurity transformations require rigorous efforts

As the cybersecurity transformation progresses, it’s imperative for businesses to remain adaptive and proactive in safeguarding digital assets and maintaining a resilient security posture. By staying ahead of emerging threats and continuously refining their security strategies, they can effectively mitigate risks and protect against potential breaches. With the ever-changing nature of cyber threats, a proactive stance is essential to ensuring the long-term security and stability of enterprise systems and data.

Looking to bolster your cybersecurity infrastructure? Make the most of our cybersecurity solutions and embrace digital security change with confidence.