Retailers across the nation are feeling the strain and profit loss attributed to a rise in external theft hitting their stores. Taking an active role in layering technology and updating policies and procedures can help retailers stem the flow of activity and risk.
Retailers across the nation are feeling the strain and profit loss attributed to a rise in external theft hitting their stores. From flash mobs and pushouts, to smash and grabs and other forms of shoplifting, the problem continues to grow. According to the 2021 National Retail Federation Retail Security Survey, over 60% of respondents reported that organized retail crime (ORC) has increased over the past five years, with the number of apprehensions, prosecutions and civil demands all experiencing a sizable decrease from 2019 to 2020 alone. Shoplifting no longer fits its traditional mold as a nonviolent crime perpetrated mostly by petty thieves and smalltime criminals. Nearly two-thirds of the retailers surveyed by the National Retail Federation said that violence associated with store thefts has risen, led by organized gangs that resell the goods they steal.
Other contributing factors for the increase in theft include:
- Expansion of places and platforms in which to sell stolen merchandise
- Online marketplaces make it easy to sell stolen merchandise with low risk of getting caught
- In some states, thieves are facing fewer consequences due to a higher threshold set for a theft to constitute a felony
Decriminalization of low-level offenses in some states has create opportunities for criminals to manipulate the system.
For example, Proposition 47, a California ballot initiative passed in 2014, sought to alleviate prison overcrowding by reducing the penalties for some crimes. The measure raised the threshold for felony theft from $500 to $950. In fact, as many as 38 other states have similar laws in place to make shoplifting a minor crime if under the higher threshold.
The consequences for the rise in theft are far-reaching for retailers, consumers and communities at large. In many areas of the country, some retailers are choosing to close up shop altogether rather than continue falling victim to incidents of theft and organized retail crime. The loss of even one retail location, particularly in densely populated city centers, means inconvenience to the consumer, loss of jobs for the employees, reduced sales tax base for the city, and a blight on the community reputation.
Equally as impactful is the cost of theft on the retailer. According to consultancy firm Strategic Resource Group, the firm surveyed a number of retailers across America who say shoplifting is now 2% to 3% of their total sales. That’s up from 0.7 to 1% pre-pandemic.
So, what can retailers do about it?
When it comes down to it, thieves target stores that offer the least resistance and chance of getting caught, focusing on where they have the greatest possibility of a successful heist. Unsecured or unprotected entrances and exits send a clear message to would-be criminals and shoplifters that the location may be a prime market for theft.
There are several solutions that can help retailers secure the front of their store and help deter shoplifting and aggressive theft.
Although new to many U.S. retailers, these systems have a proven track record in Canada and Europe.
Security gate systems’ designs are customizable to adapt to any style retail location, helping reduce theft by encouraging customer movement in predefined directions, preventing unwanted traffic paths from store to return counters, and reducing the risk of shopping cart walkouts with unpaid or stolen merchandise. All security gates are ADA-compliant devices that are both manual and automated, and are connected to fire alarm panels for automated control to avoid egress obstructions in case of emergencies. Security gates can also be integrated into video surveillance systems and with electronic article surveillance (EAS) solutions.
Security gates promote subtle but impactful shopper behavior modifications like:
- Helping to encourage customer movement in predefined directions like entrance flow to the return desk or service counters
- Helping to manage occupancy compliance by controlling entry/exit traffic and help provide a safer environment for customers and associates
- Reducing unwanted traffic paths and fraudulent returns by separating the returns desk from the rest of the store
- Reducing shopping card walkouts with unpaid or stolen merchandise
Electronic Article Surveillance
Electronic article surveillance (EAS) systems have a long history of helping retailers curtail theft in their locations while maintaining an open-sell environment. Over the years, the technology has evolved to include network capabilities, remote tuning, diagnostics and expanded sensor portfolios to cover a wide range of products.
EAS systems can be integrated with video cameras, so that when an incident occurs, EAS system alarms trigger the cameras to start recording the event for visual documentation. Additionally, just the presence of EAS tags and pedestals can act as a deterrent for opportunistic theft.
The main components of any EAS system include:
- Detection devices located at the entrances and exits of the store; these come in a variety of formats including pedestals, concealed floor systems or overhead antennas
- Hard tags for the protection of soft goods and detaching devices for the removal of tags
- Specialty tags for hard-to-protect items, such as ink tags, lanyard tags, bottle tags, shoe tags and tags to protect boxed items
- Disposable labels for hard good items, and devices to deactivate labels
Video surveillance systems have been a staple for retail loss prevention professionals for decades. The first systems were based on analog, closed-circuit television technology often delivering poor quality, grainy images for use mainly as an investigative tool. The technology has since advanced and changed dramatically, now offering high-resolution, digital solutions based on IP networks. The digital solutions available today offer many benefits over the analog systems of prior decades. Intelligent, cloud-based video surveillance is simple to deploy and manage, and typically requires little to no specialized IT support, which is particularly helpful in retail environments without IT experts on-premises at individual locations.
Analytics software built into many newer security cameras and other devices can detect and document areas of loss, helping retailers to better understand and pinpoint each source of loss so it can be addressed.
Video Analytics and Artificial Intelligence (AI)
Stores are increasingly leveraging the power of video analytics to gather comprehensive business intelligence data about activity and traffic in their stores.
As stated previously, many retail stores already have video surveillance cameras, which they use to monitor their property or investigate incidents using video footage post-event. To complement those camera networks, video analytics systems use the valuable data that is recorded by those cameras. Video footage is processed and analyzed to identify and classify objects—such as people, vehicles, and other items—then indexes them to enable easy and quick video search and quantifiable, actionable analysis.
Store layout is also an important factor in ensuring a safe, pleasant, and efficient customer experience. Preventing crowding not only contributes to a much more comfortable retail experience, but also diminishes the risk of crowds amassing in advance of a smash and grab theft event or flash mob. Video that is aggregated over time can help retailers uncover where and why crowds form and make intelligent decisions to prevent future crowding. Crowds—especially long queues—are detrimental to the customer experience and, sometimes, compromise safety. It is important for operations and security managers to be aware of when, where, and how often crowds and queues form, so they can make staffing decisions based on crowding hotspots and traffic peaks and develop contingency plans for crowding in real time. Video analytics systems can be configured to trigger alerts based on proximity and people counting filters. For instance, when pre-defined count and proximity thresholds are violated, operators can be notified that an unsafe amount of people are occupying a certain area and investigate the quantity and density of the crowd formation.
Additionally, video systems can be mounted over Point-of-Sale (POS) stations and self-checkouts and integrated with POS systems in order to capture and document theft events like mis-scans, “left in cart,” sweetheart detection and product-switches. These checkout intelligence solutions leverage video, analytics and system integration for another line of defense against loss for retailers.
Public View Monitors (PVMs)
PVM solutions are an outgrowth of the conventional use of public view monitors. PVMs fundamentally consist of an integrated camera and display monitor that typically showcases the live camera view and occasionally displays other messages. These systems were initially placed at store entrances, so that shoppers could see themselves as they entered the store, instinctively look up at the PVM, and retailers could obtain a recorded image of most shoppers’ faces. This could then be used to correlate with evidence of any crimes committed in the store, while simultaneously acting as a theft deterrent. In addition to entrances, retailers are ramping up their strategy to include adding PVMs near high-value items. The message to a would-be thief is simple: We have a camera on you, are likely recording and possibly actively viewing you in real time.
With PVMs placed around the store, focused on high-value merchandise and product locations, retailers can satisfy a number of security objectives, including the ability to:
- Alert store personnel when the product is taken or approached
- Obtain tagged recorded video of events around the product for evidence
- Heighten awareness to the potential thief that they are being recorded and surveilled
Some retailers have also focused on reinforcing existing practices and policies to help combat this growing offense to include:
- A variation on the customer service angle may include having sales associates walk the perimeter aisles of the store to greet and make eye contact with each customer. When done correctly, patrons are greeted almost constantly. If an associate feels a situation warrants further attention, they can then summon the manager on duty for a more direct engagement with the customer. Some retailers also deploy extra associates to the front-end of the store for stocking, folding, merchandising and other tasks, thereby discouraging potential grab and run theft.
- Increase the use of convex mirrors in each corner of the store, add signage on all PVMs, and install dummy camera dome covers throughout the store so that would-be thieves can’t easily identify where cameras are. Retailers may also consider attaching poles on shopping carts to help prevent pushouts.
- Training sales associates to recognize the formation of organized retail crime, such as flash mobs or potential cart pushouts. While still classified as shoplifting, certain behavioral factors may identify a move toward more aggressive tactics. Along with training associates to recognize these factors, educating them on how to respond in a safe manner is equally important.
- Station a guard at the entrance of the store that stands at a podium. At the podium, the guard can view all the sales floor cameras in real time and also act as a greeter to both help improve customer service and act as a deterrent.
Treat every opportunity as a customer service opportunity. Greet shoppers—and potential ORC shoplifters—as they enter the stores. Offer assistance with their shopping, make eye contact and make sure they know you’re aware of their presence. Some retailers even offer a personal shopper experience, which greatly deters would-be shoplifters.
Shoplifting has been around as long as shopping itself. What changes over the years is the methods deployed by the thieves and the magnitude of the issue for retailers’ bottom lines. As reported by a number of industry associations, security suppliers and retailers, the COVID-19 pandemic has played a significant role in increasing the frequency of more violent types of crimes.
While no one solution or even combination of solutions will completely eradicate shoplifting from our society, taking an active role in layering technology and updating policies and procedures can help retailers stem the flow of activity and risk. Active prevention methods such as signage, visible camera technologies and public view monitors, along with solutions designed to modify consumer behavior, can have an impact on deterring crime across the retail industry.
Shoplifting, organized retail crime and social media-driven theft impacts everyone—from the consumer to the retailer and the communities where they operate—so a coordinated effort between retailers, their security partners and law enforcement is an essential first step.