NRF says organized retail crime is a “burgeoning threat”

A rising tide of retail theft is a growing challenge both for retailers and the industry at large, due increasingly to organized retail crime (ORC) rings, the National Retail Federation (NRF) said today.

Goods stolen from stores, known as “retail shrink,” rose to $94.5 billion in losses last year, up from $90.8 billion in 2020, according to the NRF’s “2022 National Retail Security Survey.” The survey found that the average shrink rate in 2021 was 1.44%, a slight decrease from the last two years but comparable to the five-year average of 1.5%.

The thefts are occurring across all platforms, spanning in-store, e-commerce, and omnichannel fraud, a majority of retailers said in the survey. To address the problem, retailers say they are prioritizing reactions to guest-on-associate violence, external theft, and ORC.

“The factors contributing to retail shrink have multiplied in recent years, and ORC is a burgeoning threat within the retail industry," NRF Vice President for Research Development and Industry Analysis Mark Mathews said in a release. “These highly sophisticated criminal rings jeopardize employee and customer safety and disrupt store operations. Retailers are bolstering security efforts to counteract these increasingly dangerous and aggressive criminal activities.”

Retailers said that the problem has grown worse during the pandemic, with large numbers of respondents citing an increase in violence (89.3%), shoplifting (73.2%), and ORC and employee theft (tied at 71.4%). Those numbers showed a 26.5% increase in ORC as the schemes become more common.

The research showed that ORC groups commit retail crimes for their financial benefit, and specifically target items that are concealable, removable, available, valuable, enjoyable and disposable, also known by the acronym CRAVED. Items that have more of these characteristics are more likely to be stolen, highlighted by the top categories targeted: apparel, health and beauty, electronics/appliances, accessories, food and beverage, footwear, home furnishings and housewares, home improvement, eyewear, office supplies, infant care, and toys.

In search of solutions, retailers are boosting spending on theft prevention measures. The survey showed that more than half (60.3%) are increasing their technology budget and 52.4% are increasing their capital and equipment budget as they invest in techniques such as radio frequency identification (RFID) tags and readers, computer vision at point of sale, and license plate recognition.