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Fashion retail shrinkage spikes as disconnected systems and theft collide

Press Release

Ripped jean shorts with a tag mockup

Survey finds that lack of item-level visibility during the finished product journey is hampering inventory control at a time when retail theft has reached crisis point

MENTOR, OH – July 2, 2025 - Avery Dennison (NYSE: AVY), a global materials science and digital identification solutions company, reveals that supply chain blind spots during packing and shipping, fueled by a lack of integration between critical systems, are quietly eroding profitability for fashion retailers. At the same time, supply chain shrink is adding to the monumental challenge retailers face in combating store theft, staff theft and returns fraud. Avery Dennison is helping brands tackle this problem with the launch of  Optica™, a full-service portfolio of end-to-end supply chain solutions, driving item-level data transparency from source to retail, allowing for greater visibility and control over shrink.

Shrink is already at record levels, due to a spike in theft. Research from the National Retail Federation [1] reports a 93% increase in the average number of shoplifting incidents per year in 2023 versus 2019 and a 90% increase in dollar loss due to shoplifting over the same time period.

Compounding this battering of fashion’s profit margins is the fact that considerable losses are also happening behind the scenes — hidden in plain sight within disconnected systems. A new report from Avery Dennison, Boosting Margins – The Power of Enhanced Fashion Supply Chain Visibility [2] reveals that 64% of 250 fashion retailer leaders surveyed say inaccurate or incomplete shipping information is a common reason for order delays and shrink.

The failure of packing, shipping, and order management systems talking to each other was the most widely-cited post-production concern among those polled.

“As margins get tighter due to trade barriers, geopolitical tensions, and rising production costs, fashion brands can’t afford to let preventable inventory loss fly under the radar,” says Uwe Hennig, global segment senior director, General Retail, Avery Dennison. “If you don’t know what’s missing, you can’t restock it — and that’s a double loss.”

“In an industry where speed, trend responsiveness, and inventory precision are paramount, systems visibility is essential. Fashion brands that fail to bridge the digital gaps in their supply chain risk more than just stock loss — they risk missed profits and missed opportunities.”

RFID source tagging can help
RFID technology [3] has been proven to overcome supply chain opacity and inaccuracy. Item-level RFID tags, embedded in garments or labels during production, enable real-time tracking and seamless integration across previously siloed systems.

A separate survey by Avery Dennison [4] of 300 retail leaders, found 76% of respondents say they are already using or planning to adopt RFID. This highlights the growing urgency to improve inventory visibility for the purpose of operational efficiency and profit protection.

“Retail leaders recognize that boosting visibility and transparency in supply chains helps to reduce stock mismanagement and protect from the very real threat of theft, while strengthening partner and consumer trust,” continues Hennig.

Download The Retail Theft Crisis: Strategies to Protect Your Business report here. [5]

Media contact

Jack Gibson
Global PR Manager
jack.gibson@eu.averydennison.com

关于艾利丹尼森

艾利丹尼森公司(纽约证券交易所代码:AVY)是一家全球性的材料科学和数字识别解决方案公司。我们致力于开创无限可能“Making Possible™” 的产品和解决方案,助力推动所服务行业的发展 ,以优化人力和供应链效率,减少浪费,促进可持续发展、循环性和透明度,更好地连接品牌与消费者。

我们设计开发标签及功能材料、射频识别(RFID)inlay 和吊牌、融合现实与数字世界的软件应用程序,以及提升品牌包装 、传递或展示信息以改善客户体验的各种产品和解决方案。我们服务于全球多个行业,包括家居和个人护理、服装、综合零售、电子商务、物流、食品和杂货、制药和汽车等,在50多个国家雇佣约35,000名员工,2024年公布的销售额为88亿美元。了解更多信息,请访问 www.averydennison.com