There’s a challenge in loss prevention that’s as old as the retail industry itself: How to balance the need to reduce theft without making customers feel like potential felons.
It may be a bit overstated, but locking up expensive merchandise has been a common practice among retailers to protect those items, even though putting things under lock and key and depending on employees to oversee the process is cumbersome and inconvenient for everyone involved.
More importantly, industry observers note that customers will often leave the store and take their business elsewhere after a few minutes if they can’t find an employee with keys to unlock the display or a nearby register to pay for the item.
According to the National Retail Federation’s most recent National Retail Security Survey, shoplifting and organized retail crime thefts accounted for 36 percent of the $46.8 billion in shrink retailers saw in 2017.
Security devices are integral to all segments of retailing, and companies are working on ways to increase functionality and make them less intrusive. The new generation of compact, cable-locked devices is being used for handbags, luggage, backpacks, apparel and other items that make it easier for customers.
With nearly 50 stores in the eastern United States, Reading, Pa.-based Boscov’s has found its own solution to the issue by adopting Checkpoint System’s CableLok system for high-end outerwear brands like Michael Kors and Calvin Klein.
“The retail landscape is continuing to evolve, and more and more focus is being placed on the customer’s shopping experience,” says Stuart Rosenthal, vice president of sales and marketing for Checkpoint. “Retail loss prevention has to decide how to protect merchandise and not impede the shopping experience.
“With the continuing growth of ORC-related theft, it has become more apparent than ever that product protection is a valuable tool for increasing profits. The challenge for both retailers and solution providers is how to best protect the merchandise while not slowing sales,” he says.
“We had been using a mechanical cabling system in stores, primarily for high-end outerwear, for over 20 years. But it’s not a user-friendly system by any means,” says Mike Conaway, director of risk management and loss prevention for Boscov’s.
He describes it as basically an electronic box: A coat is attached to one end of a cable, which is then attached to the display rack. If someone tries to remove the coat or cut the cable, the alarm goes off.
“The problem with the system is that the customer was tied to the rack. It didn’t allow them to look in the mirror or even try on different things like scarves that might go with the coat. It also required an employee to disconnect the item from the system and lock it up again,” he says.
“Not only can you lose customers, but it was difficult for employees to operate and maintain. We had to constantly replace batteries and the cables would go bad.”
There was no problem with theft if the system was maintained. “But in larger stores we could have as many as 30 or 40 of these boxes attached to racks in the department. And each box could have 30 cables attached to it. If one cable or a battery went bad, the whole thing would start beeping,” Conaway says. “Then it became a cat-and-mouse game to find which box it was and why it was beeping.”
“There’s been an increase in sales since we began using this system and shortages dropped significantly in all stores.” – Mike Conaway, Boscov’s
What’s more, customers would occasionally complain, he says. “They felt like we didn’t trust them, and the way it was set up customers would have to buy the coat first before they could be allowed to match it up with other items.”
This could be a challenge in the fall and around the holiday season when most of the store’s outerwear selection is on the selling floor, Conaway says.
After two decades of use, the mechanical system still worked — but the stores had to come to terms with a different consumer and retail mindset.
“Back then, we had a lot more people on the selling floor that could be available to unlock merchandise,” Conaway says. “That’s not the case with any retailer these days, and customers don’t want to wait around while you find an employee to unlock the cable.”
EASE OF USE
Boscov’s had been discussing changing its system for several years. “We really started having serious conversations early last year,” Conaway says. “That’s when we reached out to Checkpoint.”
“We work with retail partners to find solutions that make it easier for customers to shop while protecting their assets from theft,” says Ken Rayca, national account manager with Checkpoint. “The versatility and portability of the 2 Alarm CableLoks make open merchandising easier, permitting open merchandising and free movement in the store which, in turn, minimizes sales assistance. The project’s success was in no small part
due to the execution of Boscov’s LP and store teams.”
“We first used CableLoks about three years ago for handbags. But they weren’t designed for that. We started testing them this past fall for outerwear. It was immediately successful because the system was easy to use, required no maintenance and you could train someone to use it within a minute or two,” Conaway says.
“Because we have such a variety of locations, we probably won’t roll the system out to all stores. But we’re very happy with it and we’re considering rolling it out to locations with higher shrink. And a number of employees have thanked us for taking out the old system. They no longer have to deal with the alarms and their customers now have the option of paying for an item at any register.”
The sheer simplicity of the system is one of its principal attributes, according to Conaway.
“I know for sure that there’s been an increase in sales since we began using this system and shortages dropped significantly in all stores,” he says, noting that the decline in shrink was about 3 percent, while it increased 1 percent in stores that didn’t have the CableLok system in place.
As for expanding the system to merchandise other than outerwear, Conaway says Boscov’s tried it in several different areas. “But we didn’t measure those so we’re not sure how well it did. We did a lot of inventory checking before we applied CableLoks to coats so we knew what the shortage was before we started. We did another inventory after the test was over so we were confident it was going to work for us,” he says.
Conaway doesn’t see any changes being made to the system since “it’s doing exactly what we hoped it would do.” It will probably be expanded to other units as the company grows. “But we’re a little bit more conservative when it comes to expansion. We typically open one or two stores a year without taking on a lot of debt. That’s the company’s mindset,” he says.
Len Lewis is a veteran journalist and author covering the retail industry in the U.S., Canada, Europe and South America.