Here’s how retailers are responding to retail crime

(NewsNation) — As American retailers continue to grapple with theft, some are integrating new security technology while others are relying on more tried-and-true methods to address crime.

According to the National Retail Federation (NRF), retailers lost close to $95 billion in 2021 due to “shrink” — which accounts for various inventory losses but is primarily driven by external theft. Retailers reported a 26.5% increase in organized retail crime from the year prior, NRF found.

Some of those incidents have been brazen “smash and grab” robberies in the nation’s largest cities.

In New York City, there were more than 63,000 shoplifting complaints last year — a 45% jump from 2021, according to a recent New York Post analysis.

In response, some local retailers started using facial recognition software to identify repeat offenders. But that technology has also received pushback from various city council members who are concerned about privacy and racial bias.

Other businesses have opted for more traditional security measures, placing merchandise in locked cases and adding guards.

Locked up merchandise

Across the country, businesses are putting items under lock and key to deter theft. It’s not a new strategy, but recent comments suggest it may become more common.

“We’re looking at literally putting everything behind showcases to ensure the product’s there for customers who want to buy it,” Rite Aid’s chief retail officer Andre Persaud said on a September earnings call.

Last month, Ulta’s Chief Operating Officer Kecia Steelman said the beauty retailer plans to have locked cabinets in 70% of its stores to protect fragrances, which are often targeted by thieves.

Target is also locking up more products and expects theft-related losses this year could be $500 million more than in 2022.

Other companies are testing store concepts where most products are kept out of sight entirely.

Earlier this month, Walgreens opened a redesigned store in Chicago with just two aisles of touchable merchandise, as reported by CWBChicago. For the majority of items, customers order at a kiosk and pick them up at the counter.

Walgreens has pushed back against the idea that the store’s design is meant to deter theft. Instead, the company has said the new concept — which allows people to order ahead online, among other changes — provides “enhanced convenience” for customers and streamlines the shopping experience.

Locking up merchandise can make it more difficult to steal but the security approach also comes with limitations. Retailers risk turning off customers, who may feel inconvenienced or surveilled.

Joe Budano, CEO of Indyme, a technology company that sells retailers security devices, recently told the Associated Press that locking up items reduces sales by 15% to 25%.

More money for guards

Shoppers may be noticing more security guards at stores. About one-third of NRF survey respondents last year said they were increasing their budget for guards.

That response comes amid more retail theft but also an increase in violent attacks. Nearly 80% of retailers surveyed by NRF said guest-on-associate violence was up over the past five years.

In some cases, the increased security presence isn’t human.

In February, Lowe’s began testing security robots at four stores across Philadelphia, according to the Philadelphia Inquirer. The 5-foot-tall egg-shaped bots reportedly use an array of microphones, sensors, and cameras to detect anomalies which are then reported to Lowe’s central monitoring team in real time.

After increasing their presence in recent years, some retailers are pulling back on specific types of security guards.

“We’re putting in more law enforcement as opposed to security companies,” Walgreens CFO James Kehoe said on an earnings call in January. “The security companies are proven to be largely ineffective.”

At least one state lawmaker wants retailers to be required to use armed security.

Earlier this year, a Democratic state representative in Illinois introduced a bill that would mandate grocery stores and gas stations in Chicago to hire their own armed security during hours they are open. So far, that bill hasn’t advanced in the state legislature.

Calls for legislation

Industry groups like the NRF are calling for federal legislation to help crack down on organized retail crime. The bipartisan Combating Organized Retail Crime Act, which has been introduced in the House and Senate, would establish a new investigative unit within the Department of Homeland Security to help combat retail crime.

If passed, the bill would follow other legislative efforts at the state and local levels.

In April, New Mexico Governor Lujan Grisham signed a law aimed at curtailing theft at retail stores. The law allows prosecutors to impose stricter penalties and they can charge criminals with a new crime: “Aggravated shoplifting.”

Last year, Illinois Governor J.B. Pritzker also signed legislation imposing stricter penalties for people who commit retail crimes, including smash-and-grab burglaries.