Last week, I wrote a blog post on how counterfeiting may account for $1.8 trillion in lost business annually. Printed electronics and RFID are two of the technologies that can put a dent in this huge problem.
 
The other major area plaguing retailers is shrink, or the theft of products by shoplifters, employees or suppliers. According to a survey by The Smart Cube and Global Retail Theft Barometer, and underwritten by an independent grant from Checkpoint Systems, shrink is on the rise in the US. The survey reported that shrink increased from 1.28% of sales in 2013-2014 to 1.97% during 2014-2015.Globally, the rate is 1.42%.
 
The highest rate of shrink is in the winter, with apparel and pharmacies the two most likely targets. Depending on the country, the largest cause is either shoplifting or employee theft; in the US, it is the latter. When you consider that the holiday season leads to many part-time employees and busier stores, one can see how the winter has the highest level of retail theft.
 
There is a sizable cost involved here. Global Retail Theft Barometer reports that the annual cost of shrink to U.S. shoppers, as absorbed or passed on from retailers, averaged $615 per household.
 
So how do retailers prevent this theft? There are a variety of methods being used. According to the survey, these are the most common approaches being used:
• CCTV/DVR (83%)
• Alarm monitoring (78%).
• Electronic Article Surveillance (EAS) (68%)
• Security guards (63%).
• Spider wraps/security keepers (41%).
• Advanced inventory control tactics (27%).
 
RFID and potentially printed electronics are playing a role in the area of EAS as well as advanced inventory control tactics. The use of RFID tags allow retailers to maintain a constant watch on inventory, and can provide a signal if the chip is not deactivated.
 
The catch, of course, is that retailers don’t necessarily want to pass along the costs of the RFID tags and readers to customers. What they are missing is that the cost of theft is much greater, and it is already being passed along to consumers. This is why we are seeing retail segments such as apparel already using RFID, and watching printed electronics making inroads in the liquor industry as well as the EAS market. As printed electronics makes gains in commercial markets, the cost effectiveness of the technology will likely make it more appealing to brand owners and retailers.