Organized retail crime and theft (ORC) is on the rise with some estimates approaching $100 billion in annual losses. The degree of concern from retailers about the scale of the ORC problem is reflected in the fact that many now reference ORC and theft losses in disclosures, quarterly earnings reports, earnings projections, and other similar contexts. It’s fair to say that ORC is growing in terms of attention and awareness, plus the impact it is having on retailer bottom lines.

ORC is not just a problem limited to areas that have raised felony shoplifting thresholds, and the overall trend is evident across the U.S. In the past, losses to theft were generally written off as an unfortunate but inescapable cost of doing business. With the scale of the problem growing, however, more retailers are recognizing that ORC activity cannot be ignored. Against that backdrop, understanding why and how this is happening and what retailers and their professional security partners can do about it have become critically important questions for retailer executives and decision-makers to answer.

Why the recent increase in organized retail crime and theft?

The obvious question regarding the growing prevalence of impactful ORC is “why now?” While some of the rise can be attributed to economic uncertainty and increasing income disparity amongst economic classes, some ORC activity seems more like a calculated case of seizing an opportunity and making a logical assessment of risk vs. reward.

With law enforcement often concluding that it isn’t able to devote significant resources to individual instances of retail theft and many thefts only meriting a misdemeanor or even a citation, bad actors have less to lose and potentially quite a lot to gain.

Another factor worth noting is that cartels, which have historically used drug smuggling, human trafficking, and cargo theft to help fund their operations, are now more involved in ORC.

High-profile examples like the recent coordinated smash-and-grab incident at a Nordstrom’s in Los Angeles, where a group made off with upward of $300K of merchandise, demonstrate how criminals operating in this space are becoming more knowledgeable, more organized, and more sophisticated. They know the law and the dangers of getting caught (or lack thereof).

Some ORC activity seems more like a calculated case of seizing opportunity

Another reason for the ORC trend is that it’s now easier to communicate and organize what are increasingly highly organized thefts. In some cases, leaders plan and organize product “boosts” with elaborate itineraries and detailed plans and strategies.

With more online platforms to sell pilfered products safely and anonymously, retail criminals are less exposed when it comes to selling what they’ve stolen.

Today’s complex supply chains also muddy the waters. With so many retailers (especially small and mid-sized retailers) getting product through wholesalers instead of directly from the manufacturers, criminals have more opportunities to sell illegally acquired goods at less of a markdown by simply reintroducing them into the supply chain.

How retailers are responding to organized retail crime and theft

Retailers attempt to combat ORC with a number of different strategies. Some take a more aggressive, hands-on approach to legislative solutions, lobbying to reduce felony thresholds and increase penalties, in some cases even advocating for laws that target ORC specifically. On the front lines, some retailers simply resort to locking up more products, a strategy no longer reserved exclusively for small electronics and other high-dollar items, but also everyday items like razor blades.

There is also a general shift toward devoting more resources to combatting ORC groups and activities and away from stopping petty theft and small-scale shoplifting. We are seeing more effective use of tech in the form of advanced camera systems, more sophisticated inventory management and control platforms, and AI-powered solutions designed to address ORC activity. Many retailers are even developing their own internal ORC teams, partnering with experienced security professionals for everyday operations, and coordinating with outside expertise at the same time.

Professional security support provides organized retail crime expertise

Because even the most well-funded internal security program can only do so much on its own, professional security support remains an important asset in combating the rise of damaging ORC activity. The best professional security partners can assist with an aggressive and experienced investigations team that is experienced with surveillance and tactical support in general and with ORC investigations specifically. They know how to effectively collaborate and coordinate with law enforcement and other retailers, and they know what materials to provide law enforcement professionals to maximize the chances that follow-up will be meaningful and effective.

Retailers looking to develop, complement, or even run their internal ORC investigations teams can lean on security professionals for robust advisory support. The best security partners can design and conduct risk and vulnerability assessments to identify and address gaps in existing practices, policies, and procedures. They can assist with training internal personnel and can use AI-powered tech tools to examine patterns of crime and assess contextual risk, helping with everything from resource allocation to new site selection and development. Ideally, a security partner has proven experience working with Fortune 500 brands and knows how to leverage sometimes limited resources to most effectively mitigate ORC incidence and impact.

At a time when ORC activity is a large — and growing — problem, security measures that combine internal improvements with external expertise and support are likely to be the most effective way to minimize bottom-line impact from ORC losses.

Published September 27, 2023