With headline after headline warning of the rapid increase of retail theft and other related crimes, retailers have been working toward mitigating the negative impacts of these crimes on their operations and their bottom lines. While it’s clear how retail crime affects an operation, what’s less clear has been the consumer impact of retail theft.
In a recent survey by Coresight Research, 56% of consumers shared the increase in retail theft has made them concerned that stores serving their community will close. Consumers are even more worried about the increase in prices, with 73% saying they are concerned retailers will raise prices to cover the cost of retail theft. The study also found that 17% of consumers would shop elsewhere, and 25% would shop more online if their local store began using loss prevention methods such as locking up items.
Hardware Retailing spoke with John Harmon, managing director of technology research for Coresight Research, who shared insights into how retailers can counteract the impacts of retail theft.
Hardware Retailing (HR): What are some of the biggest impacts retail theft is having on consumers?
John Harmon (JH): Retailers are increasingly locking up products in plexiglass cases, which increases friction and annoys consumers, in addition to just closing stores, which forces customers to shop elsewhere.
HR: How can retailers counteract the concerns of consumers outlined in the Coresight survey? What are some best practices or steps retailers can take?
JH: The survey found that 26% of consumers would shop elsewhere and 26% would move online if their local store put items under lock and key. Increasing staffing could alleviate the need to lock up goods, and retailers can modify store layouts to minimize theft, which could save them from having to lock goods up.
HR: How can a retailer who is facing theft issues themselves still provide a high level of customer service?
JH: Tracking inventory with tags (for example, RFID) enhances inventory accuracy, so retailers can restock or replenish stolen items rapidly to prevent empty shelves and therefore provide a good customer experience. Inventory accuracy is also important so that retailers can successfully fill buy online, pick up in store (BOPIS) or shop-from-store orders, as well as ensure that online inventory counts are accurate for customers who visit the physical store.
Increasing the staffing level in retail stores means there are more associates to help customers, and this presence can deter shoplifters. In addition, having a greater number of associates on the store floor would decrease the waiting time until associates come to unlock display cases.
HR: If a retailer is dealing with theft issues, do you recommend being transparent with customers on what is happening?
JH: I don’t think retailers should be too transparent, since the perception that there is a great deal of crime in the store could lead customers to visit a different store or shop online. Still, consumers’ understanding of why goods have been locked up could help mitigate some of their frustration.
HR: What other insights can you offer on retail theft and its effect on consumers?
JH: The increase in retail theft could make consumers reluctant to visit physical stores, finding them unsafe, as well as deter associates from wanting to work in those stores, which would hurt customer satisfaction. There are other technologies such as AI-powered computer video that can identify dangers and potential theft (such as loitering), which could reduce shoplifting and violence and make stores feel safer.