Retailers are gearing up for the big end-of-year push as the holiday season approaches. More shoppers means more inventory, which hopefully translates to more profits for the company. Unfortunately, the flip side to the proverbial retail coin is that more inventory also means more loss. Parcel loss is particularly endemic during peak season as higher volumes of inventory are passing through warehouses on their way to shelves or the customer’s doorstep.
According to a National Retail Federation survey, approximately 36% of parcel loss that occurred was due to theft committed by external forces, while 29% was caused by internal theft. Meanwhile, processes, control failures, and other errors made up 27% of the loss statistics. This is to say, while loss and shrink are not purely a product of theft, theft does make up a pretty significant proportion of the total losses a company experiences annually.
Package theft, commonly referred to as porch piracy, is an escalating concern for online shoppers. Statistics reveal that 1 in 5 Americans have experienced a package stolen from their porch. This type of theft typically occurs when a delivery person leaves a package unattended at a residence, making it an easy target for opportunistic thieves.
Methods to prevent parcel theft and loss should be high on the priority list this peak season. An approach to preventing parcel loss and tighter inventory controls not only reduces the chances for theft and other losses but also protects a company’s profits and reputation. This article will explore the impact of retail loss, as well as strategies to avoid package theft and prevent it from occurring in the first place.
A Closer Look at Parcel Loss
As mentioned above, parcel loss isn’t just a matter of theft, although that is a substantial contributor. Loss (sometimes referred to as shrink) is used to define any event that makes inventory no longer saleable. For example, a pallet collapsing, resulting in crushed inventory, a misplaced shipment that doesn’t reach its destination, or an employee walking out with loaded pockets can all be considered a “loss” for the company.
Globally, retail theft alone costs companies as much as $379 billion. While employers would like to think the best of their employees, the truth of the matter is that human nature can get the better of otherwise right-minded individuals. Some interesting statistics regarding internal theft include:
- 75% of employees have stolen at least once from their employer.
- More than 30% of business bankruptcies are due to employee theft.
- 90% of all significant theft losses come from employees.
- According to the Federal Bureau of Investigation, 60% of employees would steal if they knew they wouldn’t get caught.
The unfortunate truth of the matter is that parcel loss and theft go beyond monetary losses. Regardless of the cause, loss can cause significant harm to a company in a number of ways. Implementing robust security measures is crucial in preventing parcel loss and ensuring the safe delivery of packages.
The Impact of Parcel Loss and Theft
Loss and theft will affect a company in a number of ways. First and foremost are the direct costs associated with replacing missing inventory, which comes directly from profit margins. Depending on when and where the theft occurs, the customer is more often than not among the most affected by theft. In the instances of direct delivery, companies will have to determine whether to issue a refund, or ship a replacement product. Otherwise, theft can result in stock-outs. As any retailer will tell you, it’s impossible to sell from an empty shelf, stock outs result in missed sales opportunities as well as the potential harm caused to a company’s reputation.
Suffice to say, parcel loss is a considerable problem, and a vast majority of it occurs in-house. This is why the efforts to prevent parcel theft and loss are incredibly important to the health of a company. While it is an unfortunate reality to consider, the good news is that in-house problems can be corrected by implementing the right systems.
Strategies to Prevent Package Theft and Loss
While peak season is often more problematic, parcel loss requires year-round vigilance. Utilizing a delivery notification system, such as a security camera, can alert residents about deliveries and enhance security against package theft. Here are some approachable and good-sense strategies that can help to mitigate loss and improve profitability throughout the year.
Implement a Warehouse Monitoring System with Home Security Cameras
Warehouse monitoring is the first line of defense in preventing parcel loss. With the increased influx of inventory coming and going during peak season, the ability to monitor warehouse conditions and inventory in real time is practically priceless. Warehouse intelligence, such as that offered by Metapack, can help retailers keep track of inventory throughout the warehouse, which is the first step in preventing loss.
Tools that offer live reports on warehouse activity can help businesses monitor incoming and outgoing shipments closely, ensuring that every package is accounted for. This proactive approach enables retailers to identify potentially lost or stolen parcels early, allowing for swift intervention and damage control.
Provide a Secure Delivery Option
When shipping directly to customers, providing secure delivery options can offer customers peace of mind and eliminate the risk of porch pirates. Delivery options can range from any number of options, including having packages delivered at secure pick-up and drop-off locations like parcel lockers or select retailers. Additionally, ensuring that a delivery driver can securely drop off packages using innovations like porch lockboxes and smart parcel lockers provides contact-free service and enhances security. Providing customers with the ability to choose drop-off times and locations allows packages to be delivered on their terms and goes a long way toward improving the customer experience. Using alternative delivery locations can provide a secure solution for receiving packages.
Provide Tracking Options
Providing better tracking options to customers goes hand in hand with secure delivery options and also helps mitigate parcel loss. A simple and easy-to-access tracking feature allows customers to know where their package is during the transit process and allows them to plan for delivery better. Having clear visibility as to when the package will be delivered will help prevent theft, as the customer can be at the delivery location at the right time.
Employee Training and Awareness
Of course, employees have an active role in preventing theft. There are any number of reasons a person would be willing to commit theft, not the least of which is the assumption that they can get away with it. Creating an environment where everyone is responsible for parcel loss prevention can help deter theft and promote accountability. By empowering employees with the knowledge and tools to safeguard parcels, retailers can strengthen their overall security posture and protect their bottom line.
Here again, warehouse intelligence and tracking systems can go a long way towards serving as a deterrent from in-house theft problems.
Choosing the Right Package Delivery Partner
Choosing the right package delivery partner is essential to ensure secure delivery. Look for services that offer tracking and delivery notifications, as well as secure delivery options, such as requiring a signature upon delivery or delivering to a secure location. Research the reputation of the delivery service and read reviews from other clientele to ensure they have a good track record of secure delivery. Additionally, consider the cost and convenience of the delivery service to ensure it meets your needs. By selecting a reliable delivery service, you can ensure your packages are delivered safely and securely, protecting them from theft.
Stop Parcel Loss in its Tracks this Peak Season
With the busiest retail season of the year fast approaching, inventory volumes are about to start increasing drastically, if they haven’t already. Retailers need to begin stepping up their vigilance and stopping parcel loss and theft before it begins. As mentioned above, loss and theft not only directly impact profitability, but can also affect the customer experience.
While the causes of theft and loss are innumerable and endemic, there are plenty of strategies that can reduce, if not prevent it outright. These solutions include implementing advanced tracking systems, providing secure shipping options, and utilizing warehouse management systems, which can all aid in protecting the financial health of a company.
Click here to learn more about how Metapack can help protect your company from loss and theft.