Let’s jump into some problems:
- Shrink.
- Locked display cases. Locked displays are not a problem for shoppers when they meet expectations, such as for jewelry. Cough syrup is another matter.
- Social unpleasantness. It’s clear that Americans have less love for the company of strangers.
According to FBI data at Retail Dive, shoplifting in 23 U.S. metro areas climbed an average of 24% YOY from the first six months of 2023 to 2024. Shrink from shoplifting has caused stores to reduce hours and contributed to store closings, which reduces worker’s incomes. Closings drive customers to online shopping options and create access problems. Pew Research finds that 9% of Americans do not own a smartphone while Third Way makes the shocking claim that one-third of Americans lack basic digital literacy skills. If grandma doesn’t own a smartphone and can’t use a computer well enough to justify a broadband subscription, the closure of the corner drug store could impact her health.
Shoplifters cite inflation – no doubt true – while observers have commented on the exchange of stolen goods for narcotics, especially among a rising tide of homelessness (hitting a record high on an 18% YOY increase in 2024, as reported by Bloomberg and others), as well as a recent cultural permissiveness toward the disrespect of private property.
In addition to closing stores, retailers have closed self-service lanes, reorganized floor plans, and retrofit existing shelving into strong boxes so as to protect oft-pilfered HBC items and laundry detergent. The strong box approach creates an antagonistic environment. Shoppers must chase down staff, busy staff must fetch keys while other shoppers flock around protesting, and everyone is frustrated.
Making What’s Old New
Whippersnappers may not remember or have ever seen the likes of Service Merchandise or other catalog showrooms. Here’s how they worked.
Catalog showrooms mailed big physical catalogs to homes. Catalog items prominently referenced their SKU numbers; which users were encouraged to record.
In-store, shoppers would find floor samples or item images, all of which were ostensibly in stock in the back of the building. Catalogs were also sometimes mounted on pedestals. Shoppers approached an associate with a ticket listing the SKUs desired for purchase. The customer paid for the items while stockers fetched them from the warehouse space, then rolled them out on conveyors. Prepaying made theft almost impossible.
Furniture stores, jewelry counters, and electronics retailers similarly operate today, only the inventory at a catalog showroom included everything a department store might have.
Brought to the present, two-dimensional graphics with UPC codes on six-foot walls could eliminate most of the retail shelving and space otherwise needed for carts — transferring significant front-of-house square footage into cheaper and utilitarian warehouse space in which automated pickers and humans – sorry: people – can pull and cart merchandise. The need to spend labor reshelving and re-facing customer-facing inventory would be eliminated. Shrink from inconsiderate shoppers leaving, say, raw chicken in the ice cream bunker, might disappear altogether. Checkout lanes would be reduced to a corral from which customers are called by order number when their items are ready.
The normalization of retail technologies, especially following the COVID-19 pandemic, makes the use of UPC codes a breeze. In-store shopping apps like Sam’s Club’s delightfully misanthropic Scan-and-Go show us that we can use our smart devices to shop efficiently and with minimal human interaction. The success of DoorDash, Instacart and curbside pickup tells us that many people are already happy with strangers picking our vegetables and meats.
Ya weirdos.
Kiosks, like those at quick-serve restaurants, create rapid and even more profitable experiences that reduce the use of front-end labor.
Instead of using strong boxes to stop-gap the problem, lean into it. Rather than shrinky retailing that pops out like hostile architecture, normalizing the hybrid digital-physical experience to the point of using it as a way to deliver faster, more orderly, and less expensive shopping could be a strategic advantage, at least in certain geographies. Better to have one kind of retail model that is profitable enough to stay in business and serve the community than none. Hurdles
- Balancing experience and price. The inability to interact with online products before purchase plagued early online retailing. Shoppers seem largely to have gotten over that, though returns remain a serious cost-center. Life-sized images could help. In an environment with clothing, fit suggestions on the user’s registered app would reduce remorse and returns.
- Impulse buys. The app could constantly feed into user data, making suggestions about past purchases or correlating purchases from similar buyers in much the same way that Amazon tells you that shoppers who purchase X also purchase Y. Incentives might be offered to induce impulse buying. In some cases, live items might be available in the retail environment, just as we see at checkouts now. Be sure to get the dark chocolate peanut butter cups. They’re right by the register.
- The Less Digitally Able. Durable in-store scanning devices can be used for people who don’t have smart phones. Stationary kiosks might help. Or, docents could help certain shoppers with a little personal touch. Who doesn’t want to help an old lady? While it’s still a high-labor cost endeavor, it would probably be a much simpler and satisfying one than the present situation.