S1 Ep 25
Product Protection - Finding the Right Balance Between Friction and Freedom
This week, Colin Peacock and Professor Emmeline Taylor catch up to discuss the latest innovations from global retailers in product protection. Particularly for high-risk and high-shrink products. Without sacrificing the shopper experience.
From app-based access to locked cabinets, through to creative new tagging solutions and packaging redesigns, this episode looks at how retailers are trying to reduce theft while keeping products available and sales high.
Together they explore how retailers are balancing the addition of friction, in the form of product protection measures such as nets on meat, or smart cabinets, with the requirement to deliver a low friction shopper journey experience — summarising ideas shared by over 80 retailers worldwide.
Podcast summary
Cleaned transcript
COLIN:
Welcome to the ECR Retail Loss “Sell More and Lose Less” podcast series.
This week I’m joined by Professor Emmeline Taylor.
We’re reflecting on the product protection initiatives that retailers recently shared with us – how they’re protecting high-risk and high-shrink products in new and different ways.
Every year we get retailers from America, Europe, Australia, South Africa, Canada and Latin America.
Their loss prevention leaders give us an update on what they’ve been doing to protect products.
The aim is to keep products on open sale as much as possible.
We want to make it easy for the shopper, but at the same time make it harder for the thief.
It’s a fine balance.
We were looking for innovation.
We were looking for different things.
This year quite a few themes emerged.
I wonder if you could recap from your perspective what you thought the big learning points were, for those that didn’t have a chance to join the call.
Visibility of product protection
EMMELINE:
Absolutely.
There are a few themes that I think emerged.
There’s definitely innovation.
There are lots of variations on the same theme, on things that we’ve seen previously.
But for me, the meeting really encapsulated four different things.
The first one I’ll talk about is visibility.
There’s a bit of a departure between businesses as to how visible they want their loss prevention strategy to be.
There are very good reasons for that difference.
In some of the higher-risk stores, they want it to be really visible.
They want to send a strong signal to potential thieves that “we are now locking things down”.
We’re tagging more and more products and we want this to be obvious.
But in other locations, they want it to be hidden.
They almost don’t want to show the customer that the product protection is in their faces.
There are concerns sometimes that they might be signalling to their honest customers that there’s a trust issue.
So I think that visibility question was really key for me.
Reducing friction in the customer journey. Product protection v ease of access
EMMELINE:
The age-old issue of friction came up time and time again.
You don’t want to interrupt the customer journey.
But we do want to interrupt the thief’s attempts.
How do you go about balancing that?
I know that you had some interesting insights around that friction.
COLIN:
Yes.
Self-checkout comes up quite a lot on that point.
You’re scanning away, scanning away, and then you’ve got this big tag on a product.
What do I do with it?
Someone has to come over and help you.
It just delays you.
We’re also seeing, everywhere, this whole wall of plastic.
A wall of lockers.
You have to “buzz for booze”.
I think we saw one of those.
It’s clearly something that no retailer really wants to do.
We heard examples of when they could execute it better.
Rather than putting everything behind the counter, they used a bell system.
That produced better sales and better loss results.
But it’s still an inconvenience for shoppers.
Locking goods away: impact on sales and access
EMMELINE:
There are two things there.
From the conversations that I’m having, and from what came out in the session, the jury still seems to be out on whether locking the goods away is beneficial overall.
Of course, it’s going to reduce your losses.
But how does it impact sales?
Some businesses say that because of on-shelf availability, sales are actually up.
The momentary friction sometimes provides an opportunity to up-sell.
They’re seeing really positive things.
But I don’t think that’s a universal trend.
One of the big issues that came out from the session was: how do you go about accessing the product once it’s locked?
Do you “buzz for booze” and someone comes along with a key or uses a keypad?
Or do you put the onus on the shopper to open it using a mobile phone or an app, entering their phone number or using biometrics?
These are really big questions.
You don’t want to upset your customers.
But you need to manage it so you don’t lose sales because customers couldn’t access the product in a time they felt was appropriate.
COLIN:
Partly the reason I think the sales show an increase is because the “before” situation was just hidden.
The product just went out of stock.
No one adjusted the book stocks.
Locking items leads them to a more controlled position.
I think that explains some of the sales increases.
But you’re right.
Today it’s “buzz for booze”.
It could be “buzz for Red Bull”.
It could be “buzz for olive oil”, “buzz for Manuka honey”, “buzz for coffee”, “buzz for chocolates”.
There’s lots of buzzing going on in the store.
I really liked the example from an American retailer.
You could show your loyalty card on your phone, present the QR code on the loyalty card to the lock and it would unlock it.
That gives the customer a pretty easy way to get access.
For the business, you get visibility on who opened it and when.
You can see whether there was a sale that followed in the next 10 minutes or so.
That’s quite interesting.
Product protection: risks with customer-operated access
EMMELINE:
The thing that worried me slightly about that situation is what happens in a busier store.
It’s fine if you’ve got a quiet store and somebody scans their own loyalty card.
But I’d like to think customers are quite polite.
They hold the door open for the next customer.
What if a thief sees that opportunity?
Somebody scans it and the thief starts helping themselves, and it’s on somebody else’s loyalty card.
I wonder if that’s going to cause a bit of upset at some point.
We could see some scuffles in the aisles involving customers, which of course we wouldn’t want to see.
COLIN:
Yes, it reminds me of going to the Amazon Go stores, where you have to use your QR code to get into the store.
They had the problem of tailgating.
I think they eventually developed some association between the people who were together.
They were able to work out who was with whom.
If you take your three children or your mum and dad, you have that association.
Clearly, in the case of that drugstore in America that presented, I’m pretty sure they haven’t got that sort of technology that can associate people as a shopping family or group.
So yes, that’s definitely a concern.
But it was quite exciting.
It was the first time we’ve seen that for sure.
Normally, as you say, the other options are more basic.
EMMELINE:
I think as well, in terms of staff costs and the amount of time that it takes, if it’s a key someone has misplaced, or they’ve gone on a break and it’s in their pocket, the technology irons out a lot of those issues.
A lot of shoppers do love that autonomy when they’re purchasing things.
Tagging innovations and bespoke packaging
EMMELINE:
What was exciting as well was the companies that haven’t gone down the route of locking up goods in cabinets and using access control.
There seems to be quite a lot of innovation around the actual tagging of products.
We’re seeing more complex packaging.
There are now bespoke tags attached to it.
What did you think of this?
I thought there were some quite cool things happening.
COLIN:
I liked the work on Red Bull.
I hadn’t imagined they’d do that.
I saw some of the bottle tags.
The netting that’s being used around Jack Daniels seemed really intriguing.
If you want to remove that net in the store, it’s going to make a noise.
Some of those anti-theft devices are not particularly attractive.
The whole display doesn’t look great with all these bottles in nets.
But nevertheless, it seems to be working in terms of reducing theft.
Seasonality and testing effectiveness
EMMELINE:
I was thinking about the run-up to Christmas as well.
That’s going to be the ultimate test around spirits and alcohol, and confectionery.
These are really challenging products sometimes to tag.
Are they going to fend off those offenders?
COLIN:
I think that’ll be interesting.
You’ll know this from your theory, but displacement is an issue.
There are many different types of thieves.
You’ve written about them, from the swipers through to people in desperate need, and then the organised offenders.
If you’re stealing for resale or just for money, you’ll probably steal whichever product you can access.
So you are just moving the problem around the store potentially with some of these actions.
EMMELINE:
Yes.
But we’ve definitely seen lower-price merchandise now being tagged, haven’t we?
As you say, it sort of graduates down.
Shop thieves are quite agnostic most of the time about what they steal, so long as they get something.
So I think that’s interesting.
That then brings into question the cost of the tags, which has to become lower.
COLIN:
Yes, and the labour costs, and then how they interact with the self-checkouts, which now can be 80%…
