The Rise of Retail 'Inconvenience' Stores
But rising theft has made it 'an unfortunate necessity'

Detergent, diapers, razors behind security walls turn retailers and grocers into ‘inconvenience’ stores
Stroll into your neighborhood grocery or convenience store and it’s easy to spot a growing trend: larger portions of retail space and the products they’re stocked with are being kept behind security glass and plastic walls.

Theft is the reason given for businesses turning to this remedy. But is the cure worth the cost?

National chains eagerly point to retail theft as a significant drag on profits but are reticent to publicly discuss internal numbers for theft and other types of losses or specifics of new anti-theft measures.

Additionally, the media report retail thefts daily and the issue has been politicized, particularly in Los Angeles and San Francisco, where elected officials are looking to combat a problem they see as only worsening.

Security trade-offs

David Johnston, vice president of asset protection and retail operations at the National Retail Federation, said locking up more merchandise is “an unfortunate necessity” to combat theft. He said organized retail crime and violent incidents in stores are on the rise.

Retailers know that the additional supplies and labor needed to lock up more merchandise cut into their bottom line and frustrate customers, Johnston said, but some have decided it’s a necessary trade-off to keep shelves stocked.

Joe Budano, the chief executive of Indyme, a San Diego company that makes call buttons that alert sales associates to specific aisles, estimated frustration over waiting for locked merchandise leads to a 10% to 25% reduction in sales. Budano called the cages “the bane of retail.”

Budano’s company has developed technology that allows shoppers to open cases themselves using personal information such as their cellphone number or by scanning their face.  latimes.com


Could AI Be the Solution to Shoplifting?
How AI is stopping shoplifters, including here in the Valley

New high-tech crimefighting tool connects to store's security cameras

Some stores are turning to artificial intelligence to help stop shoplifting, using an app and their store's existing camera system to catch customers concealing items.

National Focus on Shoplifting

Stopping retail theft has been a major focus of police agencies and politicians nationwide. There has been a steep rise in retail theft in a handful of major cities. New York and Los Angeles have seen a 60% increase in shoplifting reports over the last four years.

Crimefighting with AI

At Big K's, Abdelkareem estimated the annual losses to theft was around $40,000. He turned to a company called Veesion, which uses artificial intelligence to monitor multiple security cameras simultaneously. Unlike humans, AI needs no breaks, no sleep, and no holidays.

Here's how it works: A small box connects to the store's existing camera system and the internet. When Veesion's algorithm detects customers making certain body movements, it sends alerts to an app, which is downloaded by the store managers and owners. The alerts often come in within 15 seconds of the suspicious activity.

"We've fed our algorithm with millions of examples," said Benoit Koenig, Veesion's co-founder.

Koenig said the system can detect a client concealing an item in a backpack, in a purse, in pants, or a jacket. It can also recognize if someone removes an RFID security tag or consumes a product by eating or drinking on the shopping floor.

While there are some false alarms, Abdelkareem said he has caught 10 to 15 shoplifters in the first few weeks of use. Some were regular customers. abc15.com


Major Retailers 'Seeing Progress' After Post-COVID Shoplifting Surge
Retailers still trying to combat theft as lawmakers pursue crackdowns
Retailers in some major cities in the U.S. are still trying to grapple with how to combat theft after pandemic-era concerns about a rapid rise in shoplifting prompted store closures and enhanced security at chains across the country.

Tracking levels of shoplifting is a difficult task for the industry, painting a mixed picture on how bad the problem is on a national scale. Police agencies frequently do not differentiate between theft from stores or other kinds of robbery, and researchers have found that many incidents do not get reported to police, further complicating the data available.

Outside research has found shoplifting issues can vary from city to city. It rose from 2019 to 2023 in New York City, Los Angeles, Virginia Beach and Dallas, while falling in a dozen other cities, according to a report by the Council on Criminal Justice.

In response to the issues with stolen merchandise, local chains and national giants like Walmart and Target have taken steps in some places to lock frequently stolen items behind glass doors that require an employee to open, limited self-checkout and hired security guards. Major retailers that had problems over the last several years with shrink have told investors they are seeing progress.

Ulta executives told investors in its 2023 fourth quarter earnings call last month that shrink was flat from the previous quarter, exceeding its expectations. Target said it is seeing “really solid progress” and didn’t mention theft in its call.

At least 15 states have passed laws targeting retail theft over the last two years along with cities and companies trying to crack down on the issue. Approaches range from increasing jail time for retail theft, classifying it as a felony and cracking down on online marketplaces where stolen goods are sold.

There is also legislation at the federal level under consideration as Congress weighs what it should do about retail theft.  wpde.com


The Trend of Banning Minors in Stores Continues
Certain cities like D.C. have reportedly seen an uptick in juvenile crime, especially pertaining to attempted robbery, carjacking, and petty theft.

Target Store Implements New “Over 18” Policy for Customers in Washington DC

The rule is meant to reduce juvenile theft and profit loss for the company

For many commercial retailers, losing money has become a significant issue, given the rise of online shopping and economic instability from the COVID pandemic. Primarily however, this matter pertains to a widespread pattern of retail theft or violence, which has grown prevalent in stores with larger surface areas, minimized workforces, and self-checkout kiosks.

In reaction to this issue, a Target location on 14th street in Columbia Heights, Washington D.C., is now introducing a strict policy that prohibits anyone under the age of 18 from entering the store without being accompanied by an adult.

At the entrance of this store, which is a part of the DC USA shopping complex that also houses a Best Buy, Old Navy, and Lidl, there is a sign that reads “All guests under the age of 18 must be accompanied by an adult at this target store.”

Certain cities like D.C. have reportedly seen an uptick in juvenile crime, especially pertaining to attempted robbery, carjacking, and petty theft.

This particular store serves more than 36,000 people a day and is part of the largest retail development in the city. Since March, all Target stores have implemented a policy limiting self-checkout to customers with 10 items or less during normal business operations. lavocedinewyork.com


From 'Defund' to Refund in Three Short Years
More sworn officers were hired in 2023 than in any one of the previous four years

Police officer hiring in US increases in 2023 after years of decline, survey shows

Departments saw an exodus of officers after the pandemic and George Floyd's 2020 death at the hands of Minneapolis police officers.

Police departments across the United States are reporting an increase in their ranks for the first time since the COVID-19 pandemic and the 2020 killing of George Floyd, which led to a historic exodus of officers, a survey shows.

More sworn officers were hired in 2023 than in any one of the previous four years, and fewer officers overall resigned or retired, according to the 214 law enforcement agencies that responded to a survey by the Police Executive Research Forum, or PERF.

Floyd's death at the hands of Minneapolis police officers spurred nationwide protests against police brutality and heightened scrutiny of law enforcement.

As more and more officers left, many of the departments had to redeploy stretched resources by shifting officers away from investigative work or quality of life issues such as abandoned vehicles or noise violations to handle increases in crime and, in some cases, the shortages meant slower response times or limiting responses to emergencies only, police officials say.

As a whole, the profession “isn't out of the woods yet.” he said. The survey shows that while small and medium departments had more sworn officers than they did in January 2020, large departments are still more than 5% below their staffing levels from that time, even with a year-over-year increase from 2022 to 2023. wkyc.com


Lower Felony Theft Threshold - Up to Five Years in Jail for ORC
Oklahoma: House passes bill to combat organized retail theft
The Oklahoma House of Representatives today approved legislation to reduce criminal activity in Oklahoma.

Senate Bill 1450, authored by Rep. John George, R-Newalla, lowers the felony threshold for theft from $1,000 to $500, defines organized retail crime, and sets penalties based on stolen property value.

"Oklahoma urgently needs to implement practical legislation based on the recommendations of the Organized Retail Crime Task Force to address alarming crime rates," George said. "Senate Bill 1450, a direct result of the task force's efforts, not only holds violent offenders responsible but also addresses the problem of organized retail theft."

George said Oklahoma increased the felony threshold on July 1, 2017, resulting in a substantial overall increase in crime rates.

Under the measure, individuals convicted of organized retail theft could reportedly be subject to up to five years in county jail. SB1450, if signed into law, would allow the Attorney General's Office to hire more agents to investigate organized retail crime, improving response time and bringing charges more quickly.

The measure passed the House 65—14 and now returns to the Senate, where Senate Pro Tem Greg Treat, R-Oklahoma City, is the author. muskogeepolitico.com


Another State Grapples with Billions in Retail Theft Losses
Organization estimates theft costing Ohio retailers billions a year
Retail theft has been hitting stores nationwide and the Ohio Council of Retail Merchants (OCRM) estimates it’s costing Ohio retailers between $2 and $3 billion a year.

“It is the top issue for our industry. We have seen, unfortunately, since the pandemic an increase in the rates of organized retail crime,” said Alex Boehkne, Vice President of OCRM. “We’re not talking about petty shoplifting, we’re talking about large scale sophisticated attacks on retailers for large dollar amounts.”

The council represents more than seven thousand retailers statewide. Boehnke said much of what is being stolen is happening through organized retail crime.

From stores locking up certain products to having to raise prices because of what’s going on, Boehnke said consumers are affected too. Small businesses are also being hit, according to the Columbus Chamber of Commerce.  nbc4i.com


How often does retail theft happen in smaller communities?
Larceny theft is the country’s most committed crime, according to the Pew Research Center. And while retail theft might not be at top of the mind for those of you at home, it’s a different story when it impacts the community, especially a mom-and-pop boutique.

California store puts together a shoplifting wall-of-shame

Simi Valley accepts $975K to crack down on organized retail theft

Delaware County, Pa. deals with recurring retail theft | "It's open season"
 

61% of Retailers Plan to Implement RFID by 2026
Retail RFID: Table Stakes or a Game Changer Technology?

By Tony D'Onofrio - President, Sensormatic

"(Self-Checkout) It's facilitating errors, and in some cases, the steal." - Santiago Gallino, Associate Professor at the Wharton School

The NRF Big Show in New York earlier this year confirmed that we are all well past the discussion of RFID as an emerging technology. On one of the NRF industry panels, Joe Coll, Macy's vice president of asset protection operations & strategy called it a 'game changer' while on another, Bill Hardware who founded the RFID lab at the University of Memphis where he is now president, called it 'table stakes.'

Is RFID a game changer, table stakes or perhaps both today? This article updates the latest data on the retail industry adoption of RFID and the impact the technology has on retailer profitability.

The State of Retail RFID

The estimated global market size for RFID will be $23.8 billion by 2030. Sixty-one percent of retailers plan to implement RFID in their stores by 2026.

"RFID technology empowers retailers to create a serialized data archive of products in-store, online and at every step of the supply chain. RFID assigns unique identification codes to each item, streamlining inventory tracking and enhancing accuracy. This allows retailers to efficiently manage stock levels, reduce errors and gain visibility into their supply chain."

For multiple retailers, RFID has now become a crime fighting tool through solutions such as 'smart exits'. The serialization of each individual products allows detailed visibility to what is leaving the store and comparing it forensically to what was paid for. Video images can be integrated into exception reporting to highlight potential theft events and expedite investigations.

Click here to read Tony's full article


Retail Vacancies Hit Record High in San Francisco Amid Store Exodus
Closures take S.F. retail vacancies to a record high in Q1

Store shutterings are driving San Francisco's retail vacancy rate to new highs — and double the national rate.

Closures drove San Francisco’s retail vacancy rate to nearly 8% in the first quarter of 2024, setting a new record for the city. The national retail vacancy rate, meanwhile, has hit an all-time low of 4%, according to CoStar’s April Real Estate Data Update.

According to Cushman & Wakefield’s latest San Francisco Retail Market Report, the 7.9% high is a large increase from its low of 3.1% in the third quarter of 2019. The decline in retail performance was primarily due to the worsening conditions in Union Square and the surrounding downtown areas.

In the first quarter of 2024, the overall vacancy rate in Union Square reached a new peak, climbing to 20.6%. This reflects a modest increase of 10 basis points from the previous quarter’s rate of 20.5% and a notable 510 bps surge from the 15.5% rate recorded last year.

A wave of closures in San Francisco’s Union Square continued in 2024, with Lacoste, The North Face, and Jeffrey’s Toys all closing locations. In March 2024, Macy’s announced the closure plan of its flagship and iconic location in Union Square as part of a broader strategic restructuring. The department store will remain open until it finds a new buyer for the building.

Closures outside of Union Square continued at Emporium Centre San Francisco (formerly Westfield San Francisco Centre) with Adidas, Aldo, Body Shop, J. Crew, L’Occitane, Lucky Brand, and Madewell closing at the beginning 2024.  chainstoreage.com


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Joann to exit bankruptcy in ‘coming days’ — with no store closings, less debt

Foxtrot, Dom’s sued amid mass layoff