urfinguss/iStock via Getty Images
The dramatic rise in brick-and-mortar theft, well documented by the media, could be having a serious impact on the viability of brick-and-mortar stores in the future.
Several chains have said that these robberies, often through flash mobs, have seriously impacted their financial results and some have even closed stores afterwards. In September, goal (New York Stock Exchange: TGT) Target announced it would close nine stores as a result of theft and organized retail crime that would impact the safety of its employees and customers.
Retailers such as Target (TGT), Dick’s Sporting Goods (New York Stock Exchange: DKS), Lowe’s companies (New York Stock Exchange:LOW) and Macy’s (New York Stock Exchange:M) have pointed to increased crime as a factor in the reduction in revenue and noted that the problem could continue to affect their financial results.
In September, the National Retail Foundation reported that in 2022, retail theft increased approximately 20% from the previous year. When taken as a percentage of total retail sales in 2022, the loss represented $112.1 billion in losses, up from $93.9 billion in 2021, according to the 2023 National Retail Security Survey.
The current situation is likely already causing a decrease in store traffic. A recent GlobalData US consumer survey found that older Americans shopping online has more than doubled, from 19% to 42% between 2022 and 2023.
While many older shoppers are reluctant to shop in person due to COVID concerns, “a rising wave of violent retail crime will encourage many older shoppers to choose other retail options, such as online shopping.” online, a channel they are already using more and more,” GlobalData said. Retail Consultant Personalized Consumer Solutions Anoop Kumar.
The consulting and analytics firm noted that many retailers are increasingly turning to technology as a way to mitigate theft. This includes ai-powered analytics and radio frequency identification (RFID) inventory tracking. Some use aerial cameras, cart locks, smart doors and smoke machines.
Additionally, BJ’s Wholesale Club (BJ), Lowe’s (LOW), and IKEA are using autonomous robots and drones to track inventory and patrol parking lots to improve store security and protect customers and workers.
But GlobalData points out that taking these measures has its disadvantages. This includes a negative impact on customer service and an atmosphere of distrust.
“The practice of locking merchandise or keeping stock in separate fulfillment areas significantly reduces impulse purchases and customer purchasing in general due to its inconveniences,” the firm noted.
“While the adoption of advanced technologies is critical to addressing these issues, a delicate balance must be struck to maintain customer service, sales and margins,” Kumar added.
