The ORC Crisis from a 30,000-Foot Perspective
Retail Theft Losses Mount From Shoplifting, Flash Mobs — And Organized Crime

A surge in violent and organized retail crime is triggering huge losses for Target, Kohl's, Nordstrom, Walmart and other stores. And the problem is getting worse.

Rising Theft Adds To Underperformance

Retail stocks face a number of headwinds in 2023, but rising theft has added to their underperformance, including. "Everything points to a continuing increase in retail crime," said Cory Lowe, senior research scientist at the Loss Prevention Research Council.
 
Violent Shoplifting Increases

In the 2023 survey of 117 retail brands, 88% reported shoplifters have grown more aggressive and violent than a year earlier. As for perpetrators of organized retail crime, ORC for short, 67% of respondents say they're growing even more violent and aggressive, compounding on increased violence from prior years.

Retail Theft Red Flags In Earnings

"Losses from theft are at historical highs," CEO Erik Nordstrom said in Nordstrom's August earnings call. "And I'd say we find it unacceptable, and it needs to be addressed" on a variety of fronts. "That being said, while it's unacceptable, it is within our plans," he added.

Target Sees 120% Increase In Thefts

Target CEO Brian Cornell noted retail theft and organized crime are growing problems. The discount giant said it saw a 120% increase in theft incidents involving violence or threats of violence during the first five months of 2023. In May, Target warned that inventory shrink would reduce profits by more than $500 million compared to last year.

Retail Crime Spurs Store Closures

Meanwhile, many retailers are reducing hours or closing locations due to retail crime, disorder and violence, according to the 2023 Retail Security Survey. Forty-five percent said they cut hours at one or more stores for these reasons. Some 28% reported closing at least one location. Nearly 30% of respondents reduced or altered in-store products to deter crime.

Shoplifting Is Just One Type Of Retail Theft - Everyday Shoplifting Vs. Organized Crime Rings - Keywords Abet Criminals, Resellers - Favorite Products In Retail Theft - Retailers Face Continued Headwinds - Retail Crime Prevention Measures - Congressional Efforts To Stem Retail Theft investors.com


You Can't Ignore the Data: Retail Violence is Surging
The NRF, U.S. Chamber of Commerce & British Retail Consortium all report  a rise in store violence

Retailers Report an Uptick in Violence Against Employees
As retailers note an increase in theft across stores nationwide, there's an unfortunate side effect of the inventory loss: an uptick in violence against retail employees themselves. A surge in organized retail crime and violence is happening across the entire sector, affecting both fashion and grocery stores, a report from the United States Chamber of Commerce indicates.

And different from your run-of-the-mill shoplifting, those engaged in organized retail crime are far more likely to become violent toward unsuspecting employees and customers, the Chamber said. According to the National Retail Federation's 2022 Retail Security Survey, 8 out of 10 retailers reported increased incidents of violence and aggression in the past year. In 2022, inventory shrink contributed to $112.1 billion in losses, up from $93.9 billion in 2021.

Retail theft has a large impact on companies' bottom lines, but an even more troubling fact may lie in the increased shift in violence to employees.

"Retailers are seeing unprecedented levels of theft coupled with rampant crime in their stores, and the situation is only becoming more dire," National Retail Federation Vice President of Asset Protection and Retail Operations David Johnson said in a statement. "Far beyond the financial impact of these crimes, the violence and concerns over safety continue to be the priority for all retailers, regardless of size or category."

The British Retail Consortium (BRC) also penned a letter stating store employees face "unacceptable levels of violence and abuse." The consortium is now asking lawmakers to create a new statutory offense that would make it a specific crime to assault, threaten or abuse a retail worker.

The violence against retail workers could cause fewer people to accept and work these jobs in the future, creating a huge disruption to the retail industry at large. Though pharmacies, big box stores and grocery stores are some of the most likely to be targeted, dollar stores and luxury retailers also get their fair share of crime. newsweek.com


Deep Dive Into Boosters
Diving Beyond Boosters into Organized Retail Crime Rings
Boosters’ thefts are often the most visible aspect of this illicit economy, even going viral in the past few years as they become more blatant in their attempts to steal everything from moisturizer to power tools to laundry detergent to beef.

In Washington, D.C., retailers lose an estimated $108 million each year from theft, according to analysis from Capital One. That number includes both shoplifting and organized retail crime (ORC) thefts, and it is just a small part of a larger issue. The U.S. Chamber of Commerce estimates that ORC contributes to $125.7 billion in annual losses in the United States—including more than $68 billion from stolen goods.

And while these stolen goods might resurface for sale in the very community they were snatched from, there’s also a chance they’ll be shipped across the country or over an international border to eventually make their way into the legitimate economy.

Today, boosters steal a median of $5,000 in merchandise before they’re arrested, according to the Organized Retail Crime Report from the National Retail Federation (NRF) and K2 Integrity published in April 2023. Boosters learn how to steal goods based on firsthand experience, as well as information available online—including on social media.

On average, the fencers that boosters work for handle about $250,000 in stolen merchandise before law enforcement catches them, and they also rely on online marketplaces as a resale channel for their goods. Approximately 45 percent of ORC groups that the NRF studied used online marketplaces for resale.

This differs from how ORC groups used to move products, says Khris Hamlin, vice president of loss prevention at the Retail Industry Leaders Association (RILA).

“Fast-forward to today, and nobody is setting up those home shopping areas anymore,” Hamlin says. “We have third-party marketplaces where individuals remain anonymous, pick those stolen goods up, and sell them anonymously to anywhere.”

And groups are also no longer just targeting designer and luxury items. They are stealing household staples like laundry detergent, allergy medicine, skincare items, and beauty products, which they can move quickly to turn a profit since people buy them regularly.  asisonline.org


ORC: A Sophisticated Problem Requiring Sophisticated Solutions
Investigating modern organized retail crime & fraud

As more sophisticated levels of retail crime emerge, store owners have to be on guard in both the physical and the digital world against organized rings of thieves

ORC has emerged as a particularly troubling trend within this industry. Retailers reported a startling 26.5% surge in ORC incidents since the post-pandemic uptick in retail theft.

And this is not just a financial concern — the human cost is also mounting. A significant 80% of retailers surveyed highlighted a rise in violence and aggression associated with ORC incidents over the past year.

Harnessing technology to investigate ORC

As organized retail crime grows in complexity, the tools used to investigate it must evolve in tandem. A major boost to investigating retail theft in the private sector is reliable access to real time data. To effectively combat ORC, data points such as live gateway access to identity data, license plate reader technology, fraud detection platforms for ecommerce, and visual recognition systems to identify repeat offenders can be force-multipliers in prevention.

Equipping corporate security professionals with the right technology is not the only step needed to tackle organized retail crime, of course. Law enforcement professionals need to effectively partner with retailers to meet this effort. Approximately 50% of incidents are not reported to the police, according to the Loss Prevention Research Council.

Conclusion

Retailers, law enforcement, and government agencies need to prioritize investments in technology and personnel to combat the escalating ORC threat. Collaborative efforts are essential to create a united front against organized retail crime, and corporate and law enforcement partnerships, legislation, and data-sharing initiatives can help bridge the gaps in our defenses. Embracing real-time data access and advanced tools like license plate readers, identity verification systems, and fraud detection platforms can streamline data-sharing initiatives and enhance investigations. thomsonreuters.com


Are Soft-on-Crime Policies Fueling Retail Theft & Looting?
Former Toys 'R' Us CEO Gerald Storch slams liberal cities for 'no prosecution stance' on thefts and warns flash mob looters in Philly have to face consequences

Ex-Toys 'R' Us boss Gerald Storch slammed soft-on-crime stance of liberal cities

The former CEO of Toys 'R' US has slammed liberal cities for their 'no prosecution stance' on shoplifters, warning that brazen thieves like the recent flash mob looters in Philadelphia should face consequences.

Gerald Storch, 66, criticized Democratic leaders for sending the message that 'crime is okay and we're not going to arrest you', adding that incidences of violent shoplifting across the nation are 'accelerating' at an alarming rate.

Storch said shoplifting is a particular problem in 'liberal areas where prosecutors have not prosecuted these crimes, or they have lowered penalties or raised the limits on how much you can steal and still have misdemeanor'.

'You're not going to just solve it by just saying crime is okay and we're not going to arrest you,' Storch, who also previously served as Target vice chairman, told Fox News. His comments come after widespread looting broke out in central Philadelphia over several nights last week. dailymail.co.uk


Attorney General Alliance Fights ORC
AGA Working Groups Grapple with Gritty Topics, Including ORC

Combatting ORC: New Laws are Needed

A representative from the California DOJ led a discussion on the partnership between the CA AG’s office and retailers helping to address ORC and large scale theft and fraud. This fireside chat provided a detailed look into an evolving area of importance and discussed the need for and prioritization of engagement and data sharing between the private sector and federal, state, and local law enforcement partners. The conversation further stressed the importance of not just allocating resources but, where necessary, making legal changes to address this growing problem. Other topics for the ORC Working Group discussions included a behavioral theory-based approach designed to help educate consumers and protect them against counterfeit goods. A Michigan State University professor joined this presentation to provide a detailed look at the counterfeit supply chain and the legal and policy issues that accompany the bourgeoning counterfeit markets. Wrapping up these sessions was an analysis of the implications of the new INFORM Consumers Act which took effect in June 2023. jdsupra.com

   RELATED: AGA's Organized Retail Crime Initiative

 
Podcast: How Retail Crime Gets Organized

Cook County, Illinois Sheriff ramps up efforts to curb Mag Mile retail theft

56,000 Retail Job Cuts Through End of August
From Amazon to Allbirds, nearly 50 major retailers announced layoffs this year

As companies turn to cost-cutting measures, there’s no shortage of big names slashing jobs — and not all of them are in dire financial straits.

2023 kicked off with a grim start: Retail layoffs spiked 3,225% year over year, according to Challenger, Gray & Christmas data. Well over halfway into the year, layoffs remain elevated. Retailers announced nearly 56,000 job cuts through the end of August, a shocking 524% increase compared to last year.

Indeed, in Retail Dive’s coverage alone, nearly 50 businesses have laid off employees in 2023 — and not just those in dire financial straits. Among the long list are dozens of big-name retailers, including Kohl’s, Gap, Amazon, Walmart, REI, Under Armour, Neiman Marcus and CVS. There are also a slew of digitally native companies, including Allbirds, Ruggable, Everlane and Stitch Fix.

“Retail layoffs are likely to continue for a variety of reasons. In a down economy, they’re often thought of as a cost-cutting measure, and we’ve seen retailers using layoffs to preserve capital. We’re also seeing layoffs stemming from the closures of brick and mortar that are struggling either financially or with other issues such as theft,” Catherine Lepard, global managing partner of retail and direct to consumer at Heidrick & Struggles, said via email. “Outside of the fiscal drivers, layoffs have recently been the result of retailers rethinking their larger business strategy — right-sizing their footprints to align with consumer behaviors shifting from physical to online shopping.”  retaildive.com


Returning Packages via Uber?
Can Uber Help Reduce Return Anxiety?
Uber has rolled out a new “Return a Package” offering that lets Uber and Uber Eats drivers pick up consumers’ prepaid and sealed return packages — up to five at a time — and drop them off at a local post office, FedEx, or UPS. The cost is $5.

For Uber One members, the fee is $3. Introduced in 2021, the Uber One membership (which costs $9.99 a month or $99.99 annually) includes discounts on rides and orders, $0 delivery fees for eligible orders, and credits for late orders.

Customers can track their package return process in real time in the Uber app. Packages must weigh less than 30 pounds and be under $100 in value. retailwire.com


Holiday Mall Shopping Surge Coming?
Gen Z headed to malls this holiday season: report

Nearly half of young shoppers said they’ll do their holiday shopping at malls as consumers plan to spend less on gifts.

Nearly half of Gen Z consumers (49.6%) plan to do their holiday shopping at malls, a higher proportion than the 40.8% average, according to JLL’s Holiday Shopping Survey Report 2023. Consumers plan to spend $530 on gifts alone this year, down from $612 last year, according to the report. JLL’s research also found that the top three retailers for holiday shoppers are Amazon (64.7%), Walmart (47.6%) and Target (41.8%). retaildive.com


Has Spirit Halloween Won the Battle Over Party City?
Halloween is a $12B business. Why that couldn’t save Party City
The specialty retailer relies heavily on the holiday, but growing participation and spending wasn’t enough to spare it from bankruptcy.

Primark Continues U.S. Expansion With 24 Stores, Plans To Grow To 60

Showfields files for bankruptcy
 

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CVS Health is seeking a visionary and results-driven Executive Director to lead and own the strategic direction, development, and execution of security services, with a focus on Zero Trust, Endpoint Security, Authentication, PKI Engineering, Ransomware Prevention, and Data/Platform Protection. This pivotal leadership role will play a critical part in safeguarding CVS Health's data assets and ensuring the highest standards of security across the organization. jobs.cvshealth.com


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As the Divisional Director, Loss Prevention you will assist in the development and execution of key initiatives surrounding theft/fraud and operational accountability within the IMEG division of the Company. WHSmith is a leading global travel retailer with over 1,700 stores across 30 countries worldwide. WHSmith North America, incorporating Marshall Retail Group (MRG) and InMotion, represents over half of the Company’s international store estate. indeed.com


Director I Profitability job posted for Stop & Shop in Nanuet, NY
The Director of Profitability will create shrink strategy and be the primary owner of driving shrink control strategy across the Brand. Lead efforts to implement consistent shrink best practices across the Brand and connects with other Shrink Leads to share knowledge. Partners and influences AP, Merchandising, Operations, IT and Supply Chain leadership on all strategic and tactical initiatives to advocate for shrink and sales reducing activity minimization while supporting positive sales growth. stopandshop.careerswithus.com