Target slows store theft, but at a cost to shopping experience

That quick Target run isn't as speedy as it used to be with everything from deodorant to boxer briefs under lock and key at a growing number of stores as retailers take a more forceful approach to stymie shoplifting.

In many ways, the lockdown — including wheel-locking carts if shoppers venture too far from the store — has worked. Minneapolis-based Target and several other retail chains this summer have shrunk their rate of shrink, the industry term for physical product losses. But keeping rows of products behind plexiglass, among other theft deterrents, could eventually drive shoppers out of stores or leave them feeling alienated, loss prevention experts say.

"They've locked up a lot," said Joey Mueller, 31, about his local Target store in northeast Minneapolis. "It's toothpaste, deodorant, laundry detergent. … Out of principle, if it's locked up, I don't buy it."

For more than two years, companies such as Target and CVS have suffered from an increase in retail losses. Target reported its shrink costs grew more than $500 million last year compared to 2022. In October, the retailer controversially closed nine stores across the country because of theft.

But Target reported in its most recent quarterly report in August that it expects its shrink costs to be about even with last year. Walmart and Home Depot have also reported improved shrink numbers this year as compared to 2023.

Michael Fiddelke, serving as both chief operating and chief financial officer at Target, credited the retailer's partnership with federal, state and local agencies as well as some of the in-store tools to protect often-stolen merchandise as reasons for the improved numbers.

"For certain, some of the tactics that we deploy within the store are paying off as well," he said in a call with media. "But it's going to take all of that work to continue to make the progress that we expect and hope for over the quarters and years to come."

Customers, though, might not consider such disruptions to their errand runs the same way.

"It is super inconvenient, and it also kind of destroys the shopping experience," said Kate D. Gallagher, 30, of St. Paul, adding shopping at her nearby Midway Target can be a hassle with so many items under lock and key. "It feels like Target is treating its clients like criminals, and we're not. We're just customers."

Same old methods

According to the National Retail Federation's 2023 retail security survey, the average shrink rate for fiscal year 2022 was 1.6%, representing $112.1 billion in losses, an increase from the year prior but in line with 2020 and 2019. Shrink is made up of three main elements, per the survey: external theft, including organized retail crime; employee theft; and process, control failures, errors and other known and unknown problems.

To cut those losses, Target recently lowered its product value threshold for shoplifting intervention from $100 to $50. Many store employees avoid confronting thieves when there could be potential safety risks or large disturbances, but asset protection workers have specific training and protocols to help them make stops.

Fiddelke said smaller shrink was "one of the tailwinds" to Target's recent profits, which shot up more than 40% in the past few months as compared to the same time last year.

Mueller lamented in an online review of his local Target how it "converted half the store into a museum of deodorant, toothpaste, laundry detergent, shampoos and vitamins."

He — like Gallagher, who enjoys being able to freely compare products, look at ingredients and smell or feel items — will also venture to the suburbs for necessities. But not all shoppers will go out of their way after they are inconvenienced, said Brand Elverston, a risk mitigation consultant who used to work as an asset protection director at Walmart.

"You are asking the customer to hopefully go to your dot-com, but it's all too easy to go to Amazon," he said.

Elverston had hoped during COVID, when shrink became a bigger problem, there would be a "Sputnik moment" for the loss prevention industry to pursue more creative solutions.

But that didn't happen, and instead locked cases have become more commonplace, including at pharmacy chains such as Walgreens and CVS. The strategy might have worked decades ago when people didn't have many options, but "lock it up and hire a few cops" isn't a viable solution amid fierce competition and a labor shortage, Elverston said.

"It's different if you got a section of electronics and something that's obviously small with a high price point, and you only buy them once in a while. But you see stores that are almost, like, doing it by default," Trey Ryan, chief technology officer for Colorado-based Tally Retail Solutions, said of locked up items.

Some loss prevention tactics such as that lowered price threshold could also risk increasing stops that disproportionately affect people of color and young people, said Simon Osamoh, founder of Minneapolis security risk management firm Kingswood Security Consulting.

"Research by the [American Civil Liberties Union] and other organizations highlights that implicit biases and stereotypes can influence the decisions of asset protection officers, leading to racial profiling," Osamoh said in an email. "For instance, studies show that Black and Hispanic shoppers are more likely to be suspected of shoplifting and subjected to increased scrutiny compared to their white counterparts."

Overall, anti-theft policies, even workers just scanning customers' receipts when they exit the store, can have negative psychological effects, Stacy Torres, a sociology professor at the University of California, San Francisco, wrote in a Los Angeles Times column last year.

"A grocery run shouldn't feel like visiting a prison," she wrote. "… Companies claim the new security measures make customers feel safer, but they risk molding us into more anxious, suspicious people."

Innovation needed

Despite these increased measures, Target said its customer loyalty scores have improved, with feedback on interactions at checkout being the strongest it has seen in years.

"While retail theft remains a challenging issue for the industry, Target continues to make meaningful progress to address the issue through the actions we have taken in our stores and the efforts from policymakers and communities around the country," Target spokesman Joe Unger said in a statement. "Our priority remains ensuring the safety of the team and guests, while maintaining the positive experience Target shoppers expect."

If a retailer is going to continue to use locked cases, there are ways to make the process less cumbersome to customers, said Jennifer Fagan, a retail consulting partner of Ernst & Young. Retailers can try adding staff to make responsiveness better and introduce easier ways for customers to alert workers they need help, such as through the store's mobile app, Fagan said. Or retailers could reward their most loyal customers with being able to unlock the cabinets themselves through the app, she said.

As for loss prevention staff, retailers need to implement rigorous training that focuses on unconscious bias and conduct regular audits to identify any patterns of discrimination, Osamoh said. Data analytics can help ensure stops are objective.

Radio frequency identification (RFID) tags can help track products like clothes in real time. Target uses RFID technology for certain products, but it is not widespread.

Ryan, of Tally, developed an anti-theft system in which stores place problem products on sensor pads on shelves, and these alert staff when someone is removing a large quantity of products. A customer service representative can then respond in a nonconfrontational manner.

Smart shelf technology — currently in drug stores, mass merchants and grocery stores — helps retail workers not have to focus so much on catching thieves.

"They do what they do best, which is sell," said Tally's chief revenue officer, Sean Ryan. "They don't want to be security guards."