Loss Prevention Research Council Weekly Series - Episode 154 - Crime Trends, More Self-Checkout Challenges, and Threads
With Dr. Read Hayes, Tony D'Onofrio, and Tom Meehan
When does crime prevention turn into sales prevention?
https://www.therobinreport.com/when-does-crime-prevention-turn-into-sales-prevention/
Let me start this week with a new article from Warren Shoulberg published in the Robin Report and titled when does crime prevention turn into sales prevention.
As Warren writes, Theft and stealing in retail stores have become a legitimate problem across the country, both simple and singular acts and larger-scale coordinated robberies that result in significant hits to store merchandise levels. The National Retail Federation says total annual shrink, all-in, hit $94.5 billion in 2021, up from $90.8 billion the year before. In response, retailers around the country are taking various steps to try to combat the crime wave — but some seem to be taking the effort to the brink of maximum-security prisons.
It almost seemed like a joke when the news first broke. The extreme case of a big national retailer trying to deal with theft is the vault-like store that Walgreens recently opened in a downtown Chicago neighborhood. The big national drug chain took an existing store at 2 East Roosevelt Road and reconfigured it to just two aisles containing many of the basics one would expect to find in today’s modern drugstore: over-the-counter medication, bath and body items, batteries, and snacks.
So far so good, but everything else in the store – most health and beauty products including hair treatments, as well as beer, wine, and hard alcohol, plus gift cards – are all locked behind barriers and must be ordered via an electronic kiosk device. Prescription drugs work the same way.
Once a store employee fulfills the order it is brought to a separate check-out area where the shopper pays for it and picks up her purchases. Walgreens told CNN the store addresses the needs of the digital shopper and was not specifically designed to address in-store crime. The store, it said, was designed to “enhance the experiences of our customers and team members.
Walgreens is far from the only retailer to try to figure out how to deal with this crime wave. Dollar Tree, after specifically citing shrink as a hit to its earnings of 14 cents a share, is also locking up more of its merchandise as part of what the company calls “defensive merchandising.” CEO Jeff Davis on a recent analysts call said some of the blame is for retail in general and some “is, of course, particular to us. We don’t particularly care for it because we know that impacts sales,” he said in describing locked-up products.
Lowe’s is testing a program called “Project Unlock” that requires a RFID chip embedded in its high-priced items like power tools that can only be unlocked once they are purchased, and the consumer receives certain coding.
Some supermarket chains like Kroger and Safeway ask shoppers to provide their mobile phone numbers to receive a code to unlock certain merchandise on their store shelves. And numerous chains are putting premium goods behind plexiglass barriers, far more than in the old days when the security shelving was only used for razor blades, condoms, and other smaller items easy to slip into a handbag or pocket.
Today’s in-store merchandising maneuvers to combat theft seem to bear more than a passing resemblance to the convoluted shopping process of catalog showrooms. Consumers will clip coupons until their hands are sore; they will get up at 5:00 in the morning on Black Friday, and they will trample their fellow shoppers for a deal. But they won’t wait around forever to make a purchase. It’s the reason why Piggly Wiggly created the self-service supermarket. Why gas stations allow for pay-at-the-pump service? And oh, by the way, this thing called the Internet came along to make shopping faster and easier.
In a way, you can’t blame retailers for trying to solve all this rampant stealing. It’s a real problem hitting bottom lines and margins with a vengeance. And there are only so many security guards, hidden cameras, and turnstiles at store exits retailers can employ before stores look like federal penitentiaries.
Crime, like the weather, has always been a go-to excuse for retailers looking to explain away poor results. And it’s not like it’s not true. This wave of theft is real and not going away. But so far, retail solutions leave much to be desired. As one shopper told the Associated Press in a recent story on all of this, “If they’re going to make it that hard to buy something, I’ll find somewhere else to buy it.”
Self-checkout theft causing problems for retailers and shoppers who despise receipt checks
https://www.cbc.ca/news/business/self-checkout-theft-receipt-retailers-1.6899677
Let me switch topics to Canada and an article from Sophia Harris on self-checkout published by CBC news.
As Sophia reported, For Brian Simpson, a recent routine shopping trip to a Canadian Tire store in Toronto turned into an unsettling experience. He says after paying for his items at a self-checkout, a security guard blocked him from exiting and demanded to see his receipt.
"It made me feel like a suspect, like I had done something wrong," Simpson said. "I don't like that they're ... painting us all with the same brush, that they're assuming that everyone who uses self-checkout is going to steal."
The Retail Council of Canada (RCC) told CBC News that shoplifting is on the rise and that it's working with retailers on solutions. Some major retailers have adopted random receipt checks in selected stores, but the practice has sparked backlash from shoppers, who say they shouldn't have to pay the price for self-checkout theft.
"It's treating us like criminals because of the changes that they made to the store because of this expansion of self-checkout," said John McCracken, who encountered a receipt check warning sign last month at a Loblaw-owned Superstore just outside Halifax.
In a study published in 2022, criminologist Adrian Beck surveyed 93 retailers spread across 25 countries that have incorporated self-checkout technology. According to the study, retailers estimated that as much as 23 per cent of their store losses were due to a combination of theft and customer error at self-checkouts. Two-thirds of the retailers said self-checkout-related losses were a growing concern.
Beck suggests retailers will keep offering self-checkout, as long as the money they save from reduced labour costs is higher than what they lose due to theft and scanning mistakes.
Threads Shoots Past One Million User Mark at Lightning Speed
https://www.statista.com/chart/29174/time-to-one-million-users/
Finally, let me switch to some data from Statista on the fast rise of the new Threads Platform from Meta that competes with Twitter.
Can you guess how fast it took this online application to reach one million users? The answer is only one hour.
By comparison it took ChatGPT 5 days to reach 1 million users. Netflix took 3 and half years. Airbnb took 2 and half years. Twitter 2 years.
Technology in other words keeps accelerating.
This week, our hosts discuss protests in France, how far retailers are going in preventative measures, and how Threads’ rapid growth. Also this week, a look at Canadian sentiment towards self-checkout as well as more current events!
