Retailers losing billions to inventory shrink
The nation's retailers lost a staggering amount of money in 2016 due to shoplifting, organized crime, internal theft and other types of inventory shrink.
Inventory shrink totaled $48.9 billion in 2016, up from $45.2 billion the year before, as budget constraints left retail security budgets flat or declining, according to the annual National Retail Security Survey by the National Retail Federation and the University of Florida. The thefts amounted to 1.44% of sales, up from 1.38%.
According to the study, which was sponsored by The Retail Equation, 48.8% of retailers surveyed reported increases in inventory shrink, and 16.7% said it remained flat. Shoplifting and organized retail crime accounted for 36.5% of shrink, followed by employee theft/internal (30%), administrative paperwork error (21.3%) and vendor fraud or error (5.4%).
Shoplifting continued to account for the greatest losses of overall shrink. Shoplifting averaged $798.48 per incident, up from $377 in 2015. The rise was partially attributed to retailers allocating smaller budgets for loss prevention, leaving them with fewer security staff to fight theft, the report said.
The average loss due to employee theft per incident was put at $1,922.80, up from $1,233.77 in 2015. The average cost of retail robberies dropped to $5,309.72 from $8,170.17 in 2015, but remained at more than double the $2,464.50 seen in 2014.
For the first time in the survey, retailers were asked about return fraud, reporting an average loss of $1,766.27.
“Retailers are proactive in combatting criminal activity in their stores but acknowledge that they still have a lot of work left to do,” said NRF VP of loss prevention Bob Moraca. “The job is made much more difficult when loss prevention experts can’t get the money they need to beef up their staffs and resources. Retail executives need to realize that money spent on preventing losses is money that improves the bottom line.”
Online menswear company in U.S. store expansion
Made-to-measure menswear brand Indochino continues its expansion from the Web into physical retail.
The Canadian retailer will open stores ("showrooms) in four major markets in the United States this summer. On July 7, Indochino will open a second New York location, in the heart of the city’s Financial District. Other locations include a flagship at The Shops at North, in Chicago, opening on July 14, and one at Tyson’s Galleria, Maclean, Virginia, opening on July 21. On Aug. 11, Indochino will debut at King of Prussia Mall, King of Prussia, Pa.
Indochino opened its first permanent brick-and-mortar location in 2015. The four new U.S. outposts will take the company's total retail number to 17 across North America.
“In the span of a month, we will almost double the number of our U.S. locations as we continue to change shopping habits and bring our unique showroom experience to men across North America,” said Drew Green, CEO of Indochino. “We’ve been prudently searching for the perfect locations to become available and are confident that launching all stores in quick succession will better serve our growing customer base while continuing to build a strong brand presence."
Indochino’s stores are handsome and sophisticated looking, and designed to bring the brand’s online made-to-measure experience to the physical space. The brand promises a “luxury tailoring experience without the high price tag.”
Customers are paired with a “style guide” who tailors the appointment based on each customer’s needs and helps him to put together a one-of-a-kind suit or shirt. The associate helps with fabric selection, and walk shoppers through a wide variety of personalization options, including buttons, pockets, lapels and monograms. Each garment is made-to-order and delivered in about four weeks.
Along with announcing the new locations, Indochino reported it experienced 57% year-over-year growth in net revenue over the past six months, after finishing 2016 with 54% year-over-year growth. It also reported gross margin improvement of 1100 basis points.
"It’s been a stellar year of profitable growth and we’re committed to keep growing the business in a strategic and sustainable way as we offer men around the world personalized clothing at unprecedented value,” Green said.
Social network giant improves visual search engine
Pinterest is giving its image-based search engine an upgrade.
Pinterest introduced Lens in February. Since then, users have been pointing their mobile cameras at objects they see out in the real world, from apparel and accessories to decor, and Lens serves up similar styles or related information on their mobile device’s screen.
A series of upgrades is taking the four-month-old tool to the next level. For example, Pinterest has doubled the number of categories Lens is trained to recognize. “We’ve also upped its style game, so Lens can recognize and recommend outfit ideas for a much wider variety shoes, shirts, hats and other styles you’re wanting to wear,” said Anton Herasymenko, Pinterest designer, explained in the company’s blog.
Other new features include an “instant ideas” button. As Lens serves up an idea, users can tap a small white circle found in the corner of each “pin” to see more possibilities inspired by that original idea. Thumbnails of recent photos will also be embedded in the lower right corner of Lens’ screen, making it easier to access recent photos.
These updates coincide with the service’s food features. Introduced last month, this option enables Lens users to point their smartphone cameras at individual ingredients or entire dishes. The goal — to help Pinners purchase the exact merchandise “and recreate your favorite restaurant meals at home,” Herasymenko added.