Retail shrink is a huge and ever-growing issue. While retailers need to act fast to prevent billions of dollars in losses, their current solutions adversely affect shoppers — and may drive them toward e-commerce alternatives. How can companies overcome theft once and for all? 

Consumers Are Getting Fed Up With Locked-Up Products

The modern customer experience is anything but luxurious or futuristic. Shoppers enter their local supermarkets and are immediately greeted by entire aisles locked behind security cabinets and whole departments sectioned off with electronic gates. They press the call button and are forced to wait for an employee long enough that they decide they’re better off shopping online.

For consumers, an excessive number of surveillance cameras, locked cabinets and loss prevention professionals can seem like an unspoken accusation. It may feel intrusive, unwelcoming, frustrating or unnerving. In any case, research indicates many of these so-called solutions deter customers just as much — if not more than — would-be thieves. 

In fact, locked cabinets can negatively affect profit margins, according to experts. People walk in, see that the item they want is locked up, notice there aren’t any employees in sight and then leave. In an age where shoppers can click a few buttons on their phone to deliver products to their door, the inconvenience of waiting for an associate with a key is often too much. 

Besides, determined thieves can smash covers, pick locks or simply steal unlocked items. Unless stores keep everything locked up and under constant surveillance, these systems won’t work as well as they need to in order to compensate for potential revenue and reputation losses. 

Out of the 82% of consumers who have been to a retail store where “many products” are locked behind security cabinets, 44% feel it ultimately made for a worse shopping experience — even though most agreed it likely reduced the likelihood of theft. Despite this growing discontent, companies are increasingly embracing these kinds of deterrents.

The chief product and marketing officer at one loss prevention solution provider — which saw its smart lock sales increase by 86% in under a year in 2022 — acknowledged that retailers don’t want to impact the customer experience but feel like they have no choice. Its customers reportedly included industry giants like Walmart, Lowe’s and Best Buy. 

Why Retailers’ Hands Are Tied When It Comes to Security

According to the U.S. Chamber of Commerce, organized retail crime accounted for $68.89 billion in stolen goods in 2021 — up $21.6 billion from 2020 — representing $125.7 billion in economic losses and $14.9 billion in lost taxes nationwide. The first figure is equal to 1.47% of the country’s total retail sales.

In addition to organized retail crime, stores must deal with internal theft, incidents of violence and repeat shoplifters. Their multi-billion dollar losses highlight a serious — and growing — problem in the sector. While industry leaders prefer not to affect the customer experience, advanced loss prevention solutions are absolutely necessary. 

What Technologies Should Retailers Implement Instead? 

If locked cabinets and electronic gates won’t work, what will? Fortunately, several other security solutions show promising results while minimally affecting the customer experience:

1. Pair Real-Time Inventory and Sales Tracking 

IT teams can deploy Internet of Things (IoT) weight sensors or artificial-intelligence-enabled computer vision systems to track inventory in real time. If they simultaneously monitor itemized self-checkout sales and compare the figures, they can identify discrepancies. This way, they can forecast emerging retail shrink trends, enabling them to optimize their loss prevention tactics.

Of course, manually monitoring large volumes of data isn’t ideal. Instead, retailers should consider utilizing real-time alerts since they can help decision-makers differentiate critical and insignificant data points. This technology would also streamline workflows, which lets employees divert their attention to other high-priority responsibilities.

2. Track Products in Real Time With Subtle Devices

Security often works best when it is subtle because shoplifters don’t realize they’re being monitored, recorded and identified. Plus, since shoppers carry on unaware, it doesn’t affect their experience. IT leaders should consider utilizing active radio frequency identification (RFID) tags or miniature global positioning system devices for long-distance tracking in real time.

3. Deploy Advanced Facial Recognition Systems

Conventional deterrents are largely ineffective against bold, aggressive shoplifters — which research suggests is becoming an increasingly prevalent issue. About 88% of retailers agreed shoplifters were somewhat or much more aggressive in 2023 than in previous years, with over 50% reporting an increase in serious offenses.

Potentially violent situations call for a seemingly hands-off approach since preventing the aggressor from escalating keeps associates and customers safe. High-definition cameras with facial recognition AI are a must-have in these scenarios because they process almost instantly, helping companies identify and deal with perpetrators.

Tips for Further Preserving the Customer Experience

Improving store security while maintaining a positive experience is complex but possible. Here’s how collaboration between middle management and a committed information technology (IT) team can accomplish that goal:

1. Encourage Associates to Be Overly Attentive 

Many shoplifters are opportunistic. If they can’t get to something that’s locked up, they’ll grab the next best thing — and it could be anything from acetaminophen to laundry detergent. How can retailers prevent them from walking out with stolen merchandise if they can’t lock up every aisle? They should simply consider shrinkage a customer service issue. 

Having associates casually approach would-be thieves deters them because it lets them know they’re being watched. At the same time, it makes consumers feel seen and appreciated. This approach is leagues better than simply following individuals around the store because it comes off as attentive rather than accusatory.

2. Increase the Number of Associates on the Floor

As most industry professionals know, retail suffers from a high turnover rate. For reference, in May 2024 alone, approximately 480,000 workers quit — representing 3.1% when taken as a percentage of total employment. This figure is higher than most other sectors, including mining, health care, construction, finance, warehousing and manufacturing. 

Understaffing is one of the largest obstacles to loss prevention. In other words, management should consider positioning employees with RFID tags near locked cases. In addition to improving inventory tracking — and deterring internal theft — it means shoppers wouldn’t have to wait for assistance. 

The Intersection of Security and the Customer Experience

Balancing security and the customer experience is critical for the longevity of brick-and-mortar businesses. Unless business leaders and IT teams take action now, they may find themselves acting like a pseudo-Transportation Security Administration to prevent retail shrinkage.