In the world of retail, the persistent issue of lost inventory—responsible for nearly $100 billion in annual losses—continues to challenge businesses big and small, especially during the peak holiday season. While a portion of this loss can be attributed to the ongoing cost-of-living crisis, a significant percentage results from opportunistic theft, putting retailers under significant pressure to secure their inventory and protect themselves against these threats.
Retail leaders should focus their innovation efforts around the one point within a customer’s shopping journey that has significant potential to cut down on theft: the point of purchase. Innovations in and around the point of purchase are key to improving the overall customer experience, both in-store and online.
Payments is at the center of the shopping journey, so if retailers are not providing a seamless and secure experience, it exposes them to lost revenue and abandonment. The technology that can be implemented around the payments process can bring a range of security benefits, allowing retailers to address and mitigate any potential thieves that may be at play. By reimagining the power that payments can hold, retailers can strengthen their defenses, ensure efficiency while also staying secure, and provide greater personalized experiences for their customers during the holiday season.
Strengthening Defenses with Innovative Technologies
While the customer experience is a result of multiple influences, retailers who rethink their payments technology to both support sales and drive better customer interactions can help guard against vulnerabilities. The ‘just walk out’ technology in Amazon Fresh stores is a prime example. Shoppers enjoy the benefits of a frictionless journey from start to finish, and the store is protected against shrink through the use of automatic payments, cameras, and AI monitoring. The concept of “just walk out” technology is also gaining traction among traditional grocers, signaling a significant shift in how these businesses are approaching operational efficiency and working to eliminate shrinkage challenges.
As another example, computer vision technology can be deployed to tighten the security of self-service kiosks, detecting anomalies during checkout and alerting staff when products aren’t scanned properly. When you combine this with AI—and integrate them both with existing loyalty programs—retailers can better leverage customer data to build a more accurate picture of shopper behavior, and subsequently offer more personalized recommendations.
Balancing Efficiency and Security
All retailers need to think about their innovation journey in the context of how they are creating greater efficiencies at scale. Addressing vulnerabilities that expose retailers to theft requires a delicate balancing act. The undeniable convenience and efficiency benefits of self-checkout must be carefully weighed against the increased risk of theft.
Some retailers have looked to deploy various technology improvements—such as highly visible closed-circuit television (CCTV) images and AI-driven age verification models – as a way to enhance security measures, yet still maintain a seamless shopping experience for customers. Unfortunately, this hasn’t always proven to be a successful approach, as some retailers have recently started to remove self-checkout from stores completely, citing customer satisfaction and potential theft concerns as their reasons for doing so. The key takeaway to remember here is that we must consider the potential drawbacks for shoppers and the impact on their overall experience when implementing these technology restraints, evaluating whether the restraints are truly reducing theft or just deterring customers altogether.
Beyond finding a balance in technological advancements, a hybrid approach that combines technology with human presence is crucial. Traditionally, retailers have had a select few checkout stations throughout their store that customers must come to in order to pay for their goods to checkout. This approach can be reimagined. Instead, consider shifting this checkout model to now give store associates mobile devices that are equipped with smart payment software. By doing this, staff members are empowered to process transactions anywhere on the shop floor, eliminating the need for customers to wait in lines to checkout and transforming associates into roaming points of sale. Mobile solutions not only reduce the problems incurred by long checkout queues and abandonment rates, but also enables staff to deliver highly personal, fast service at checkout and build rapport with customers.
The Power of Personalization and Data
If we shift the focus from the in-store shopping experience to the experiences customers have when shopping online, the same principles can apply. AI technology can be utilized to analyze shopping patterns in real-time, enabling retailers to identify customer segments and target them with personalized offers, relevant suggested products based on past interactions, and their preferred payment methods when it comes to checkout to make that process and smooth and seamless as possible.
Leveraging data to personalize recommendations and offers is rapidly changing the retail landscape at large—as it is with many other industries today. The integration of advanced technology is not simply a reactive response to retail theft facing the industry, but a proactive strategy to enhance the overall shopping experience. By leveraging innovative solutions around payments and the point of purchase, retailers can create a secure, efficient, and personalized environment, creating a seamless and secure shopping experience that benefits both customers and businesses alike; ultimately safeguarding the holiday season and beyond from the clutches of petty thieves.