Cambridge, MA November 17, 2006 - Retailers this holiday season will likely be ripped off by shoplifters who are using sophisticated practices and technologies to steal high-value merchandise and then re-sell it. It's no longer just casual shoplifters; organized retail crime (ORC) has now become big business. ORC gangs are professional thieves -- they steal and re-sell tremendous amounts of merchandise.

Indeed, organized retail crime (ORC) is a large and growing problem for US retailers. In 2005 testimony before the US House Judiciary Committee, members of the FBI, working together with the National Retail Federation, estimated that retailers lose $15 billion to $30 billion every year because of ORC. According to a recent University of Florida study, the average dollar value of an ORC theft incident exceeds $40,000.

Shoplifting kicks into high gear even prior to Thanksgiving, and continues throughout the holiday season. Industry experts attribute much of this increased activity to the increased demand for gift items, which professional thieves typically sell to buyers for 30 to 70 percent of retail prices. Because many retailers relax their return policies around the holidays, it can be a simple matter for thieves to return stolen merchandise without a sales receipt.

As a result, it is expected that this year's retail theft rate throughout the holiday season may well be record-setting. To combat this threat, forward-thinking retailers are paying increasing attention to shrink and taking steps to reduce it. They recognize that when merchandise is stolen, the loss can be greater than the dollar value of the item itself. For example, when high-demand items are stolen, the store's inventory system is unaware that the product has left the store and so doesn't trigger re-ordering or restocking. This situation, known as a "silent out-of-stock," forces customers needing these items to shop elsewhere.

According to Patrick Sobalvarro, president and CEO of IntelliVid, "New high-technology solutions such as intelligent video analysis can help retailers address the problem of organized retail crime. For example in wipeouts, thieves linger in front of the merchandise and then move large amounts of goods. Intelligent video analysis software detects the thief lingering and the movement of the merchandise and can alert loss prevention personnel immediately."

Often organized retail crime groups work with a retailer's employees, both to steal merchandise and to commit fraud at points of sale. These employees return to the store week after week and month after month, making up the vast majority of theft experienced by retailers. Sobalvarro recommends an investigative workflow to understand when and where theft is happening, who is responsible, and to gather and communicate the results of investigation to others. "Scanning the floor with a pan-tilt-zoom camera hoping to see suspicious behavior has long been known to be ineffective. New technologies can put all your video into a searchable database, allowing you to see more and instantly review all of a criminal's activities in your store. Tools like these are necessary today because ORC gangs have become smarter and more inconspicuous, and they will hit one store after another in your chain."

Sobalvarro adds, "Every stripped tag, every empty package in the store, every bit of evidence of pilferage found by a retailer is an opportunity to improve the bottom line. By quickly understanding how the theft took place and who perpetrated it, steps can be taken to protect the store from ORC gangs who can otherwise make the holidays a far less happy and profitable time for retailers."

Patrick Sobalvarro is available as an expert resource for editors or researchers writing about organized retail crime or related retail shrink topics. Interested individuals should contact George Cohen at 617/325-0011 or george@gccpr.com.

About IntelliVid
IntelliVid provides intelligent video analysis solutions for the retail industry. Its Video Investigator software unleashes the full potential of existing surveillance systems, transforming them from passive recording devices into proactive theft prevention and store intelligence solutions. Video Investigator delivers bottom-line benefits to forward-thinking retailers. It automatically monitors store activities, and reveals important events to personnel, eliminating the time-consuming tasks of manually monitoring and searching surveillance video. It will also serve as a platform providing unprecedented insights into customer traffic, stock-outs, merchandising effectiveness and more.

Headquartered in Cambridge, Massachusetts, IntelliVid is backed by Intel Capital, Flagship Ventures, Egan-Managed Capital, and DFJ New England. Its customers include leaders in the department store, mass merchandise, and chain drug store segments.

All companies and products listed herein are trademarks or registered trademarks of their respective holders.

CONTACT:
George Cohen
George Cohen Communications
(617) 325-0011
george@gccpr.com

Back to top
Back to Press Releases