Adopting Total Retail Loss for Loss Prevention

The Total Retail Loss Report by Professor Adrian Beck, provides the retail industry with a more effective understanding of retail loss. The report begins by laying out why the traditionally used term, “shrinkage” is too narrow. It then develops a more in-depth concept, called “Total Retail Loss.” The study is based on interviews with 100 senior retail leaders from some of the largest retailers in the US (report can be found here:

This blog post will discuss the findings of this report and highlight areas of the Total Retail Loss model which are impacted by Cloud by Ocucon.

Why This Report

A goal of Beck’s study is to develop a new definition of retail loss that is appropriate for the 21st Century retailing environment.

The report provides an in-depth study of the associated costs and losses of being a retailer. The report suggests that through adapting the Total Retail Loss model, retailers will be able to:

-    Better understand the impact of current and future retail risks

-    Make better informed decisions about the utilisation and allocation of increasingly scarce resources

-    Loss prevention professionals are provided insight into how they can become “agents of change” within their role

Defining Loss vs Costs in the Total Retail Loss Context

An example of a potential loss for a retailer is workers’ compensation. The employer covers the medical, legal, and other costs associated with an accident at work. Such an event impacts negatively on a retailer’s overall profitability. Beck emphasises that where there’s a clear link between an activity and the generation of retail income, then it should be classified as a cost. An event is classified as a loss when there is no link between such activities.

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