What Are The Top Risks, Challenges, and Threats To The Retail Industry Today?

On November 16, 2020 By Team CalAtlantic

Retailers always face several challenges and threats as part of the business. The coronavirus pandemic only added to the list, with retailers expecting multiple business risks to show up in the following months as companies continue to adjust to the pandemic. It is essential to identify what these risks and challenges are so that retailers can try to find solutions early on.

The following are some of the issues that retailers expect to tackle in the near future and how loss prevention professionals plan to address them.

Retail Crimes: Theft and Fraud

According to a survey conducted by the National Retail Federation earlier this year, retail theft and fraud are expected to increase exponentially in the second half of 2020. This isn’t unexpected news since US retailers lost $51B in theft and fraud cases in 2018, and that number only increased to $62B last year.

Believe it or not, the coronavirus pandemic made the crime situation even worse for retailers. Since many brick and mortar businesses had to close down due to the outbreak’s physical conditions, fewer stores were left for criminals to exploit. The increased targetability and the decrease in security due to fewer people being available for work only made the businesses that remained open more vulnerable to theft and financial losses.

Even the retailers who took their businesses online weren’t safe from crime. Credit card fraud became more significant than ever as companies shifted to the digital platform, with criminals taking advantage of lax online security measures.

To address these growing concerns, retailers are looking for a more effective response from law enforcement. Local police departments should be easy to get in touch with so that their presence can be requested as soon as possible if necessary. Stores should be on the same page as the local police regarding prosecution rules for better implementation. The police’s cybercrime department is also expected to beef up security measures by using enhanced intelligence software to better protect online businesses from digital fraud.

The Need for Tech Resources

With human resources challenging to secure due to the pandemic, businesses need to develop technological solutions to maintain a functional security service. According to an article published by TechRepublic, the demand for video surveillance cameras is widely expected to swing from $23.6B in 2019 to $44B in 2025, showing a compound annual growth rate of almost 13%. The impending increase in demand for advanced security solutions makes it more sensible for businesses to start thinking about technology today.

The continuous innovations in security technology are giving business owners multiple reasons to consider investing. For instance, the increasing sensitivity of advanced analytics and artificial intelligence for applications such as deep AI learning and facial recognition can significantly improve surveillance systems, to the point that minimal human intervention may be necessary.
As mentioned earlier, theft and fraud in the retail industry aren’t expected to go away anytime soon. Technology solutions providers understand that, and they are responding to the challenge by developing advanced security solutions that both physical and online stores can integrate to improve their overall security systems.

The Impact of the COVID-19 Pandemic on the Supply Chain

The total impact of the coronavirus outbreak on retailers can not be understated. Thousands of businesses had no choice but to shut down not only because they relied on the physical presence of customers (restaurants, gyms and fitness centers, recreational and amusement parks come to mind), but also because the supply of their products was directly affected after the pandemic closed several modes of production.

There’s not much that retailers can do right now when it comes to fixing the supply chain. According to a study by Moody’s Investors Service, the retail industry’s operating income can fall by as much as 30% for 2020, without any operating profits until at least 2022. The best-case scenario that retailers can hope for is a sooner return to normalcy, but even then, it will take some time for all businesses to recover from the pandemic’s effects.

A Final Word on Retail Risks

The retail industry will always have its share of risks, but the COVID-19 pandemic made the situation worse by affecting multiple business sectors. Luckily, technological companies continue to thrive despite the pandemic, offering retailers effective security solutions to help them stay afloat and protect themselves against people looking to take advantage of the crisis.

If you own or manage a business in need of advanced security systems, don’t hesitate to reach out to CalAtlantic. CalAtlantic is an industry-leading provider and integrator of quality security solutions, with state-of-the-art technology products and services that can surely help protect your business from any threat imaginable.

(Source: Security Info Watch.)

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