Best Buy, Walgreens, CVS Experiment With Anti-Theft Devices

Say you need a new stick of deodorant. You walk into your local drugstore and find the product you want. Except you can’t grab it. It’s sitting right there on the shelf among an assortment of brands and varieties, but it's locked inside a plastic case. You press a button to alert a store employee you need assistance. Then you wait. This scenario has become increasingly common. More than three-quarters of American adults have seen everyday goods, from toothpaste to over-the-counter medication, locked up on store shelves, according to decision intelligence company Morning Consult. Among shoppers who have requested assistance to access a secured item, 57% estimate help arrived within one to five minutes. More than a quarter said they waited longer. “Pretty much everyone, at some point, is going to have to hit the little button or ask for help to get something unlocked,” said Claire Tassin, retail and ecommerce analyst at Morning Consult, who noted the situation occurs more often in urban settings. Additional data suggests three in 10 U.S. adults are not willing to deal with the inconvenience. Rather than stand around and wait, some try their chances at another store. Others go online. Traditional anti-theft devices frustrate both criminals and customers. The result means more friction added to the in-store shopping experience. Which isn't good, considering physical retailers are already dealing with the pandemic-fueled growth of ecommerce heading into the lucrative holiday season. All locked up "The last thing in the world a retailer wants to do is lock things up. I can tell you that with great certainty," said Joe Budano, CEO of Indyme, a San Diego-based company that manufacturers shopper help buttons and other loss-prevention tools for retailers. Despite these feelings, more companies appear to be locking more items up to curb rising levels of retail crime. "We're looking at literally putting everything behind showcases to ensure the products are there for customers who want to buy it," Rite Aid's chief retail officer, Andre Persaud, told analysts during an earnings call last month. "We've even had to go to the extent of using off-duty police officers in some of our stores." Earlier this year, James Kehoe, evp and global CFO of Walgreens Boots Alliance, echoed these concerns, noting on an earnings call that the retailer is "experiencing higher rates of shrink loss due to organized crime." The Retail Industry Leaders Association (RILA), whose members include Walgreens, Rite Aid, CVS Health and Best Buy, estimated criminals steal around $70 billion worth of products from retailers each year. One factor contributing to the rise in retail crime is the proliferation of online marketplaces, where bad actors sell the stolen goods for pure profit. And these websites aren’t doing much of anything to stop it from happening, according to Lisa LaBruno, senior evp of retail operations at RILA. Walgreens and CVS Health declined to comment. Targeted friction To deter theft, the industry is looking to the government for more help. In August, for example, RILA partnered with the National District Attorneys Association to aid prosecutors and law enforcement agencies in their efforts to curtail retail crime. Multiple retailers are also attempting to better balance crime prevention and customer experience with new technology. Best Buy, for instance, has replaced some products on shelves with QR codes, which shoppers can scan to pick up the product at the cash register. Others are preventing electronic items, such as cordless drills, from turning on without being purchased and activated first. Another strategy involves smart shopping carts equipped with wheels that lock when pushed too far from the store. Jeff Jones, CEO of Vira Insight, a Texas-based company that designs and manufactures retail store fixtures, commercial furnishings and loss-prevention products, noted that while locked items contribute to a slight drop in sales, they do reduce theft. Yet he's aware refinement is necessary. "When we’re creating these displays and locking products up behind glass, we are also thinking through how best to innovate in this space to protect and advance the consumer experience," said Jones. In 2019, 2% of Vira Insight's revenue came from anti-theft products. This year, the company estimates the category will generate around 20% of its annual revenue. Indyme is testing a product it calls the Freedom Case, which shoppers can open with a smartphone or loyalty card. The secure case monitors a shopper's behavior with cameras and artificial intelligence, denying entry if it senses the door was open too long or an atypical number of goods were taken. Budano anticipates the Freedom Case will be responsible for more than 20% of Indyme’s revenue next year. "This is where loss prevention is heading," he added.

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Retailers Grapple With Keeping Products Safe Without Inconveniencing Customers

Traditional anti-theft devices frustrate both would-be buyers and criminals alike

Paul Hiebert

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