Just as online data breaches, payment security malware and hackers get more sophisticated, so, too, do shoplifters.
Over the holidays, the retail industry saw an increase in activity among shoplifting rings, which made off with significant amounts of merchandise from multiple locations as they executed coordinated attacks on multiple retail outlets simultaneously. In an age of digital threats to retailers, it can be easy to write off this seemingly old-fashioned form of crime. However, shoplifting costs retailers $30 billion annually, according to the National Retail Federation.
With the retail industry, by necessity, having an ever-increasing focus on the online realm — when it comes to security and all other matters — a focus on in-store theft prevention might take a backseat to those concerns. However, one retailer, Rite Aid, has been taking steps to combat loss prevention head on by combining data with in-store know-how.
According to a recent article from the National Retail Federation, Rite Aid is using a holistic approach to its shoplifting woes. Working with loss prevention firm USS over the past several years, Rite Aid has been making a hard push to pinpoint high-risk items in its stores and to find data-based solutions that protect the chain’s locations from shoplifting, while still managing to enhance the customer shopping experience.
Robert Oberosler, Rite Aid group vice president of loss prevention, told NRF that his goal was to have the store’s nearly 4,600 managers lead the charge in their retail environments.
“Rather than corporate giving a mandate,” Oberosler told the outlet, “we wanted to allow the stores to use data to determine which items were seeing theft and [how] to protect them.” To do this, USS has created an online portal. “The concept was a website [built to look] like an Amazon page,” Oberosler explained.
Store managers can log in and find information on the most at-risk items and potential loss prevention products to employ. A USS analyst is also using data to identify the stores that are seeing the greatest losses in certain categories and proactively recommending solutions to those managers to address the challenges. “This gives us a laser-guided approach to problems,” adds Oberosler.
Based on this, Rite Aid will choose 10 or 12 stores in which to test the potential solution, as well as an equal number of control stores. If the results show the solution is providing the expected benefits and generating a positive return, the test is expanded.
Oberosler has been adamant that the theft deterrent measures must look attractive and allow customers to view and self-select products. Think of those expensive razors or high-end lotions and creams in large clunky plastic boxes or behind a locked display case. These types of measures make it difficult for customers to interact, touch and learn more about the product.
Instead, the national drugstore chain (recently acquired by Walgreens) is experimenting with devices that attach high-risk items to a fixture or rack, making it difficult to simple walk out of the store with them but not impeding in the customer’s discovery and decision-making process.
Cosmetics, for example, have a notoriously high shrink rate due to their small size and packaging that changes often as manufacturers look to make a product more appealing. To combat this, Rite Aid has implemented motion-activated public view monitors that allow customers in cosmetics aisles to see themselves and have the added bonus of letting them know they’re in view of store employees. As a result, remarks Oberosler, “shrink has gone down significantly.”
Going a step further, Rite Aid, adds Oberosler, is “starting to look at packaging innovation and building in some features that enhance the value of asset protection.”
Given the competitive nature of the retail industry, the willingness of brands to work together with retailers is an unexpected — but largely necessary — shift. In the past, brands often left the issue of loss prevention to retailers, based on reports that indicated most retail theft had internal causes. This has changed as recent studies have shown the significant increase in external theft, Oberosler told NRF.
The recent acquisition of Rite Aid by Walgreens does not seem to be slowing these data-driven loss prevention efforts, and the retailer continues the program to pinpoint and address in-store shrink issues. As it learns what is working in one set of stores, the USS analysts are able to make informed recommendations for rolling out sweeping changes across the entire chain.
But shoplifting, at the end of the day, is a human problem with many unknown variables. Whether this analytics-based approach will prove successful on a large scale remains to be seen.