S1 Ep 13
Retail Security Guards - New Thinking
Retailers are rethinking the role of retail security guards, weighing the benefits of extra store associate hours versus security personnel, and examining ideas like community guards.
This week Colin Peacock is joined by Professor Adrian Beck to explore innovations in how stores are using retail security guards.
Retailers spend millions, and some hundreds of millions on security guards. In our mini benchmark study, 81% of the thirty six retailers who responded shared that their budget for guards will increase and at least, stay the same over the next 12-18 months.
Yet retailers remain agitated about the role security guards play, and troubled by the difficulty in being able to accurately determine their return on investment.
Each year, we get a chance as a working group to hear from the retailers in the group and over 120 registered for this year's meeting to swap notes and hear new ideas from their peers.
This week's podcast summarises those discussions: New thinking when it comes to security guards.
Podcast summary
Retail security guards are a major recurring cost for retailers, and Colin and Professor Adrian Beck discuss how businesses are rethinking guarding to prove return on investment as costs rise.
The episode covers three approaches: the trade-offs of in-house versus third-party guarding, a trial comparing extra guarding hours with extra store labour hours, and a community-based “peace” model used at scale in the US.
They reflect on why results vary by store and why guarding decisions are unlikely to be one-size-fits-all.
Cleaned transcript
Why retail security guards budgets are under strain
COLIN:
Welcome to the ECR Retail Loss Sell More and Lose Less podcast series.
Retailers spend billions of dollars and euros on retail security guards in stores.
This week, I’m joined by Professor Adrian Beck to explore new ways retailers are using security guards, rethinking the business model, rethinking their role, and weighing the benefits of extra store associate hours versus security guards.
We’re also talking about community guards, a new initiative from Whole Foods in the USA.
Last week we had a session around security guarding and the guarding model itself.
Over the last five years, we’ve seen the need for security guards grow as external environments become more challenging, and we’ve also seen costs rise as wages go up.
That’s putting a real strain on budgets and forcing retailers to think through better ways to prove return on investment, and help their boards feel comfortable this is the best way to spend what could be hundreds of millions of dollars or euros.
We had three different presentations and then quite a bit of discussion.
What were your key highlights or learnings that retailers might want to think about as they look to innovate their guarding model?
ADRIAN:
It’s one of those classic perennial issues: the role of retail security guards in store.
It’s probably one of the biggest recurrent costs that major retailers have in their security budget, so we often have the conversation: given how much it costs, what is the value and what is the purpose of such a significant investment?
It’s always interesting to hear how different retailers are addressing this issue, and in this session we had three quite different approaches.
In-house vs third-party retail security guards
ADRIAN:
One retailer was going through the age-old debate: should guards be employed directly by the retailer as retail employees, or should you use a third party?
As we know, there are pluses and minuses on both sides, and they were working through that.
It was interesting to hear concerns about in-house: how do you control how those people are used in stores?
Do they get “hijacked” by the store manager to do things beyond the remit of a security guard, like “while you’re here, do you want to stack some shelves?”
There were also issues about intimidation: if you’re employing somebody local, can they become intimidated by local crime groups who know who they are and where they live, and does that compromise their capability to deliver effective security?
We didn’t really come to a conclusion about which is best.
I think it comes down to what’s right for your organisation at that time, and what you want them to do.
COLIN:
The retailer did a really good job of spelling out the issue and the opportunity.
For them, the challenge was operating big stores and small stores, and those different formats add a different lens when you’re thinking about internal versus third party.
Testing retail security guards versus extra staff hours
ADRIAN:
The other retailer was very open about a project to understand what value their guarding budget was bringing.
They ran an experiment: they provided additional guarding hours in around 50 stores to see what happens if you double the amount of guarding hours.
In other stores, they used the same increased budget to add store labour hours instead, but not guarding.
They measured it using stock adjustments, and also the impact on sales, which is often a forgotten indicator but really important in retail.
It was striking that spending the money on more guarding generated higher levels of sales and lower levels of loss than if they put it purely into store labour hours.
We tried to unpick why extra guards might impact sales, and we came to the view that it gave existing store staff more time to restock shelves, reduce out-of-stocks, and deliver better service, creating a knock-on effect.
COLIN:
Who knew? Retail security guards grow sales.
You think prices, bigger range, but not “retail security guards grow sales”.
ADRIAN:
They were also very open that it didn’t happen in all stores.
In some, it had no impact at all.
Now they’re trying to understand why it works in some stores and not others.
It’s certainly not one-size-fits-all, and local circumstances matter, but it was good to see them experimenting with different ways of using this budget.
COLIN:
Often you speak to store managers, and this was a convenience store retailer, and they say they want more hours rather than security guards.
This was helpful because it proved pretty solidly that the security guards covered the cost of the security guards themselves.
ADRIAN:
In some of the stores, yes.
COLIN:
It wasn’t so obvious in any of the stores that more store hours led to a big enough increase in sales and reduction in loss to cover the costs.
Community-based retail security guards and “peace” officers
ADRIAN:
The third was a fascinating case study from America where a retailer took a radically different approach to guarding.
They used it as a way to connect more closely with the local community by recruiting security staff directly from the communities around the stores.
They also thought through how that person could engage with the local community, rather than being seen purely as a reactive security person.
Almost like a reach-out local social worker: working with local groups to understand why people were coming into the store to steal, and how they might be diverted into gaining help and support in different parts of communities.
How easy it is to replicate elsewhere is a challenge, but they invested heavily and it seemed to deliver good results.
COLIN:
Every store has a community, and most places have a community outreach programme per store, but I’ve not seen it used in the way we saw here.
The contrast was that before, they used to have armed police officers in stores as security guards, in uniform.
These community guards pushed for peace, I think they were called.
They had a kind of uniform, but they certainly didn’t have guns, which we wouldn’t expect in the UK.
It shows a big difference in approach, and it seems to be paying out dividends for them.
The team presenting were very proud of the results.
ADRIAN:
Rightly so.
What came across was a huge amount of energy, resource, and commitment from the retailer.
They were providing additional resources to local communities to support these staff.
It was impressive to see a company make a commitment to trying something different and making a positive change for the store and the local community.
COLIN:
At some scale as well.
It’s not just a trial of 10 stores: there are 1,670 of these peace officers.
We’re going to try and do this topic next year as well, to see what further innovations are coming along.
Thank you so much for taking the time to share your notes, and we’ll see you next time.
ADRIAN:
All right, Colin, take care, mate.
Bye-bye.
COLIN:
Take care, bye-bye.
