Causes of shrinkage vary, encompassing internal factors like employee theft, administrative errors, and supplier fraud, as well as external factors such as shoplifting, organized retail crime, and improper inventory management.
Shrinkage is vital to address as it significantly impacts a company's bottom line, affecting profits, inventory accuracy, and operational efficiency. In retail alone, shrinkage costs billions annually, contributing to increased prices for consumers.
Research from the National Association for Shoplifting Prevention shows that around 42.7% of shrinkage is attributed to employee theft, and over $13 billion worth of goods are stolen from every year in the United States alone.
Industries like logistics, manufacturing, and retail face substantial shrinkage challenges due to their inventory-centric nature. These sectors experience inventory losses through various stages, from production to delivery, making shrinkage a critical concern.
The responsibility for controlling shrinkage rests across departments, involving inventory managers, security teams, and even technology experts. It's a collective effort involving proactive measures to prevent losses.
Leveraging AI is pivotal in managing and mitigating shrinkage. BeamUP's approach involves unifying and aggregating diverse data sources, empowering businesses with AI-driven insights. By consolidating data from alarm systems, guard performance, incident rates, and more, BeamUP enables precise visualization of shrink incidents in specific facility areas like aisles or bays. The insights dashboard provides a comprehensive analysis of shrink, aiding local investigations and offering a holistic view for better decision-making.
BeamUP's technology goes beyond merely identifying shrinkage incidents, offering proactive measures to minimize losses. By harnessing AI and data consolidation, it helps businesses streamline operations, reduce losses, and optimize resource allocation to combat shrinkage effectively.