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PROBLEMS FACED BY LUXURY RETAIL’S DUE TO ORGANIZED CRIMES

4 Dec , 2017  

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PROBLEMS FACED BY LUXURY RETAIL’S

Purchase of luxury items gives the buyer an immense amount of happiness. Luxury products don’t go out of style and are classic. Luxury goods are of high quality. They are unique and exclusive. The global luxury retail market was USD 120.12 billion in 2016. America emerged as the biggest global region for personal luxury goods. Europe also showed a good growth mainly due to its tourists. Consumers care and worry about their outer appearance and way of living which is why they have started using luxury goods. Everyone wants to live a luxurious life hence there is an increase in demand for luxury goods. Louis Vuitton, Versace, Chanel, Armani, Ralph Lauren, Hermes, Salvatore Ferragamo, Jimmy Choo, Tiffany & co., Christian Louboutin, Cartier, Dior, Coach, Burberry are some of the companies that make luxury goods.

 

       

 

 

WHAT ARE ORGANIZED CRIMES?

Organized crime is a group of people of local, national or international origin that engage in criminal enterprises for profit. They may be politically or financially motivated. They are an organized criminal gang. The network of organized crimes is formed within a family, through a business or through a gang. Organized crimes formed within families are hierarchical in nature and this type of network is referred to as mafia. Networks formed through a business are impersonal in nature. These can be dangerous due to its nature. Networks formed through a gang consists of youths. They join the gang for protection or due to lack of support. The criminals victimize companies by robbery, fraud and rigging public projects. Organized crime started in 1920 and still continues.

 

HOW DOES ORGANIZED CRIME WORK?

Suppose you want to start your own crime syndicate. You need to have a group of like-minded people with you who will support you and remain loyal. Your first step should be managing relationships with the local authorities. You need to make sure that no one shuts you down. You need to do this with the help of money, influence and not violence. The second step should be traveling to different countries and talk to others who are in the same business. Once you have created your base in a local city you need to expand. If the process of taking over is easy when you do that but if the local people are creating problems for you then you need to negotiate a deal with them.

 

 

ORGANIZED CRIME IN LUXURY RETAIL

The biggest problem faced by luxury retail is organized crime. The organized robbers carry machines such as sled hammers and smash the windows and gates so that they can enter the stores. They even threaten the security guards. These dangerous criminals find new ways every day to create problems in the retail business. These crime gangs create fake stores front so that they can pull off their fraud. They also create flash mobs where a group of thieves enter the store and steal whatever they can. According to reports about 97% of the 67 senior retail loss prevention executives as their companies had been hit by organized crime up from 88.2% last year. Also on average for every $1 billion in sales a retailer lost $453,940 in the last year in addition to having spent another $434,032 for fighting against these crimes. In the month of November in London at night, these robbers smashed the windows of stores like Apple, Mappin & Webb and Louis Vuitton. Louis Vuitton misplaced $150000 of merchandise in their store in Ohio. They also stole $11000 of underwear from Victoria’s Secret retailer in Illinois. They even drove a tractor via the home windows of Chanel. These organized gangs have become more violent and aggressive as compared to the previous years.

 

LUXURY RETAIL’S WAR WITH ORGANIZED CRIMES

The luxury retailers have started taking a lot of measures to protect themselves from these organized criminals. Luxury shops want to seek out measures that will ensure the safety of their products discreetly. The retailers have started using 3M safety window. Though this window is expensive it prevents smash and grab theft. Brands such as Burberry, Moncler, and Ferragamo use RFID chips. RFID stands for radio frequency identification and it monitors stock and stops counterfeits. High-End security systems should be used in all these luxury stores. Implementation of an effective system will ensure that the there are no internal as well as external threats. Video and CCTV cameras should be installed in all the stores and they should be monitored 24/7. An audio alarm system should be installed which will detect break-in for roof, walls, and windows. Stockrooms and offices should be protected using high-end security.

Luxury products need the security of the same quality so as to ensure that organized crime does not take place in luxury stores.

 

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