Smart phone technology poses significant security challenges for the retail industry according to a new report commissioned by Efficient Consumer Response Australasia (ECRA).
The report, entitled Staying Ahead of the Game – Mobile payment technologies: retail benefits and risks, sought to examine whether the transition to mobile scanning and payment increased the risk of significant impact on levels of stock losses (shrinkage).
Dr Emmeline Taylor, senior lecturer and convenor of undergraduate Criminology at the Australian National University, where the research behind the report was conducted, said the introduction of any new technology, service or process would generate a range of risks, vulnerabilities, security issues and training needs.
“Recognising the significant potential for loss, mobile payment processes must be safe and secure from the outset,” Dr Taylor said.
“We saw this with the introduction of self-checkout in Australian retail. It is not entirely clear whether there has been a significant increase in the actual amount of loss, but we do know that self-checkout has increased the number of ways retailers suffer losses.”
“We can expect similar hiccups with the introduction of new mobile scanning and mobile payment systems, as they potentially create a new set of shrinkage problems.”
Experts from the University of Technology Sydney’s Designing Out Crime research centre and from the Australasian retail industry also provided input into the report.
Shrinkage costs the Australian retail industry over $2 billion dollars annually, according to Dr Taylor.
“There is no room for trial and error as characterised by the introduction of self-service checkout; the risks are too high," he said.
“In order to limit shrinkage, protect their profits and provide optimum service to their customers, retailers will need to pre-empt these issues and ensure that any potential security risks are anticipated and safety measures are put in place.”
ECRA is an industry body that represents suppliers, wholesalers and retailers in Australia and it is supported by the Australian Food and Grocery Council (AFGC).
John Cawley, the study’s commissioner at ECRA, said the report underscored the “critical importance of building effective security and resilience into new retail systems to minimise theft, and accidental removal of goods from outlets”.
