As the threat of shoplifting intensifies, companies developing loss prevention tech have a large opportunity in front of them.
Minimizing losses due to stolen goods, or shrink, is an evergreen retail priority. But it’s becoming more urgent and growing in scale.
According to the National Retail Federation, in 2021, retailers saw a 26.5% increase in organized retail crime (ORC) incidents. Retailers credit ORC for the year’s 4.1% increase in losses ($94.5B in total) over 2020.
Companies from REI to Starbucks are also grabbing headlines as they close stores and cite crime and theft as a reason. Others, like Ulta, are simply locking up more products to keep them out of thieves’ hands.
Below, we’ll take a closer look at 2 technologies addressing this challenge — AI-enabled camera tracking and RFID tags — using CB Insights data including:
- Funding data
- Company profiles and data
- Earnings transcripts data
Retailers turn to AI to reduce shrink
As retail theft becomes more pressing, retail tech companies are building loss prevention solutions to tackle the issue. Funding to loss prevention companies surged in 2022 to reach $54M across 5 deals.
Learn more about in-store tech funding trends in the Store Tech Collection on the CB Insights platform.
A common theme connects the 5 companies that raised funding in 2022: They all offer platforms that use AI to track footage from cameras watching activity in stores.
While in-store cameras have always been a valuable tool to track customer behavior, AI is enabling automated, real-time results that retailers can take action on quickly. The systems can flag odd behavior such as consumers taking too many items off the shelf. Retailers also benefit from the low cost of installation, given these solutions integrate with existing camera systems.
