May 18, 2018

Leaders in retail are reinventing the industry. Researchers and executives alike are looking to new methodologies, cutting edge technologies and disruptive methods to address the rapidly changing retail landscape. This trend is especially the case for loss prevention and asset protection. Professor Adrian Beck from the University of Leicester in the UK, in partnership with the Retail Industry Leadership Association recently published the ground-breaking study titled “Beyond Shrinkage: Introducing Total Retail Loss”.

What is Total Retail Loss?

Total Retail Loss is defined as the “‘events and outcomes that negatively impact retail profitability and make no positive, identifiable and intrinsic contribution to generating income.”

Why Is It Long Overdue?

The term shrinkage is 100+ years old. “Shrinkage” does not provide a standard definition, and proves ambiguous even to the most savvy retailers. The traditional four buckets of shrinkage — internal theft, external theft, administrative errors and vendor frauds fail to account for the complexity of the 21st century retail landscape.

Where Does It Take Place?

Instead of the traditional buckets, Beck suggests applying Total Retail Loss to all aspects of retail: Stores, Supply Chains, E-Commerce and Corporations. These categories break down into 33 distinct categories of loss — including known and unknown losses. Through the deployment of mobile technologies and leveraging data analytics for all aspects of retail, retailers can prevent loss in each of the categories by identifying points of intervention and risk. The discrete categories of Total Retail Loss combined with data analysis provide greater insight into potential risks and lend increased visibility into day-to-day operations.

How Is This Valuable?

The new approach of Total Retail Loss factors in current and future risks that retailers may face in the future, and it increases transparency and accountability within organizations. It also permits Loss Prevention Team and Asset Protection teams to address the challenges they face with a more nuanced approach and can include several stakeholders.

The Take-away

With new technology and innovations for retail, comes new risks. The introduction of Total Retail Loss provides a conceptual framework in which retail leaders can address and mitigate risk in a dynamic sector and ultimately increase their bottom-line. Total Retail Loss as a new typology reflects the shift in philosophy when it comes to approaching loss prevention and asset protection. Organizations are increasingly shifting away from the reaction to incidents to a mindset that incorporates risk mitigation and preventative measures.


The novel and comprehensive approach of Total Retail Loss combined with powerful agile technology, and data-driven analytics overall will continue to drive innovation in the retail sector and empower retailers to drive to prevention and to contain risk.

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