Intelligent Algorithms the Answer to Retail Theft Habits?

NEW YORK and WALTHAM, Mass., Aug. 30, 2011 /PRNewswire/ -- Known as "shrink" in the retail industry, theft seems destined to remain a perpetual financial headache for retailers. Even if typical shrink rates of 1-2% sound insignificant, translated into dollars, those theft percentages mean that U.S. retailers stand to lose billions in annual profit.

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But some highly advanced technologies – computer algorithms and statistical behavioral observations originating from the life-critical disciplines of anti-terrorism – are increasingly and successfully being called upon to combat retail shrink.

We have two renowned experts available to speak about the two opposing sides of retail shrink – the rampant nature of theft, and the emerging technological approaches for battling this costly problem.

• Rachel Shteir, Author of "THE STEAL: A Cultural History of Shoplifting"
• David Even-Haim, Co-Founder and President of Profitect and International Risk Reduction Expert

While many believe that they understand the origins of retail theft and its financial impact, the epidemic is far more complex than most people realize. Author Rachel Shteir traces the history of retail theft back to Elizabethan England through to present day. As the back-to-school shopping season approaches (the second biggest retail period after Christmas) the topic of shrink is certainly top of mind for retailers of all sizes.

As David Even-Haim notes, "Technology must increasingly play a pivotal role in any successful battle against retail shrink. With such a wide range of opportunities for theft across the retail value chain, humans no longer have the capacity to deal with the scope of the problem. Instead, computers running advanced algorithms have been designed to simplify the information and provide actionable solutions against shrink." Even-Haim brings 25 years of experience and a knowledge of how the same technology used to identify and stop terrorist activity can help retailers find and capture the most elusive profit opportunities.

Biographical information:

• Rachel Shteir, Author of "THE STEAL: A Cultural History of Shoplifting" (The Penguin Press; July 4, 2011)

In her new book, "THE STEAL: A Cultural History of Shoplifting," Rachel Shteir looks at the cultural history of retail theft, why people do it and how stores have fought back in the past. Shteir examines the rich and fascinating history of shoplifting from its modern roots in Elizabethan England through today. Along the way, she addresses shoplifting in its every iteration, from compulsive stealing as a disease, to a representation of teen angst, to an act born out of desperate need, and to a form of protest against governments and corporations. She also explores the economic consequences of the 'five-finger discount' -- shoplifting costs businesses in the U.S. $11.6 billion annually. Retailers' narrow margins are rocked by boosted goods: the theft of one $5 item from Whole Foods requires sales of $166 to break even. Each year, American families pay a "crime tax" of about $450 when one accounts for the money added into every purchase in order to make up for stores' shoplifting-related losses -- more than any other country in the world. All the while, shoplifting is still on the rise and a flourishing surveillance industry has sprouted as a result, tracking our every move.  

Shteir is the author of the award-winning "Striptease: The Untold History of the Girlie Show" and "Gypsy: The Art of the Tease." Her writing has appeared in the New York Times, Slate, the Guardian, Playboy, the Los Angeles Times, Chicago Magazine, the Chicago Tribune, and elsewhere. She is an associate professor and the head of the BFA program in criticism and dramaturgy at the Theatre School at DePaul University. More information can be found at http://www.rachelshteir.com.

• David Even-Haim, Co-Founder and President of Profitect

At Profitect, David Even-Haim merged mathematical education with his 25 years of experience in risk management to develop unique risk targeting solutions. The sophisticated algorithms that Even-Haim helped develop for international aviation organizations to track suspicious packages and terrorists are today applied to the retail value chain. Highlighting complex interdependencies and offering retailers a clear picture of how to amplify their margin growth, Profitect has helped retailers recoup millions in profit. With understanding about why and where shrink truly occurs in the retail value chain, retailers can take back control of the process without creating "Fort Knox" at every store, and organizations can even turn issues related to shrink into new retail growth opportunities.

During the last 15 years, Even-Haim led more than 40 successful loss reduction programs in the service of leading retailers and CPG companies worldwide, delivering huge benefits and significantly improving the profitability of these customers. Prior to founding Profitect, Even-Haim served as CEO of ICTS Global, an international risk reduction and loss prevention consulting firm.  Profitect's profit-amplification solution enables retailers to quickly discover and actualize untapped profit opportunities across the entire retail value chain. Profitect's algorithms quickly identify measurable profit optimization opportunities through the identification of value chain margin leakage, shrink, waste, process errors, and operational risks and damages, returning intelligent, prioritized actions for increasing profit. More information can be found at http://www.profitect.com.

SOURCE Profitect