Combat Shoplifting and Reduce Shrinkage: The Power of Security Tagging

Shoplifting has always been on the radar for retailers. However, given the current climate, there has been a noticeable increase in attention towards the factors influencing the frequency of shoplifting, as well as the proactive measures retailers can implement to reduce and minimise shrinkage.

Some are even going as far to call the wave of shoplifting an epidemic: But how accurate is this?

The term shrinkage itself refers to the loss of inventory or stock due to shoplifting, employee theft, and even administrative error. Whatever the cause of these actions, it’s clear that shrinkage is on the rise. Not only does this negatively impact retailers in terms of reducing their profits and cash flow, but it can also have a detrimental effect on consumers, as prices on certain goods may have to rise as a consequence. Additionally, even grocery store employees are impacted by shrinkage, as violence and abuse against staff are both on the rise. 

The Co-op recently reported 1,325 physical attacks on staff in 2023, up 34% compared with the previous year. Because of this, the former prime minister launched a retail crime crackdown, making assaulting a retail worker a standalone criminal offence.

This year it was revealed that shoplifting has increased by a massive 37%. Data from the Office for National Statistics revealed there were 402,482 shoplifting offences in England and Wales in the year up to September 2023 - the first time the number has exceeded 400,000 since records began in 2002.

To help crack down on the potential impact and likelihood of shoplifting occurring (and shrinkage in the aftermath), retailers have deployed various methods to help protect themselves, their staff, and their goods. 

In this blog, we’ll discuss the benefits of preventative methods like security tagging and how retailers can address their shrinkage concerns. We chat with our Head of Customer Success, Clair Worthington, who shares her perspectives on the subject, providing us with valuable insights that create a valuable picture of what the grocery industry may look like in the future.

Preventing loss with security tags

Did you know that by introducing security tags and labels to products, retailers can reduce theft by around 80 per cent? 

As shoppers, we’re most likely to see these tags on clothing items or alcoholic beverages. However, they can also be used on mundane food products like butter and milk. Whilst their effectiveness is proven, their presence on the shop floor is also desirable for retailers and shoppers.  

One benefit that security tags provide is that they still enable the shopper to interact with the product, without disturbing their shopping experience in a negative way. On the other hand, the presence of security tags also acts as a deterrent for opportunist thieves, reducing the chances of shoplifting occurring.

Following the cost-of-living crisis, many retailers have seen a rise in the theft of many ‘household-essential’ items. As a result, some stores have started to security tag baskets in an attempt to reduce the likelihood of shoppers walking out with their daily and weekly shops. This highlights one of the many ways that retailers are responding to changes or shifts in our current climate.

Ultimately, it’s not just the security tagging system that will help to reduce theft - staff will also need to be trained on procedures to find the right way to de-escalate these situations, should they occur.

Q: Hi Clair! In your opinion, why is security tagging so important for retailers?

A: Security tagging for retailers is crucial for several reasons. Firstly, the implementation of security tags means that we have a greater chance of preventing retail theft. Security tags are effective as they are designed to activate an alarm when shoppers go through the store's exit without paying. This is a deterrent for thieves, as it will draw attention to them and may stop them in their tracks! Retailers use tagging as one method of shrink reduction which also includes losses due to theft, as well as stock file errors and stock damage. 

Studies have shown that stores with security tagging methods in place experience less shrinkage compared to those with no such measures, which shows the importance of setting up a quality system. Additionally, security tags are very effective for high-value or desirable items. Many retailers will protect items that are in this category as these are the items that would be more lucrative for shoplifters to steal. 

Q: What are the main causes of shrinkage in retail?

A: In my opinion, the main causes of shrinkage in retail is down to shoplifting or theft, including employee theft. Other significant factors include stock count and stock file discrepancies, as well as product damage and spoilage due to storage errors or accidents.

The cost-of-living crisis has also been noted as a driving motivator for an increase in theft, with some individuals resorting to shoplifting due to financial pressures. Additionally, the increase in self-checkouts and scan-and-go technology available in many retailers, while convenient, has provided new opportunities for theft. The combination of these factors presents a complex challenge for retailers aiming to reduce shrinkage and maintain profitability.

Unmanned self-scanner tills and temperamental technology can be contributing factors to why opportunist shoppers may take the opportunity to leave without paying for their goods. In fact, it was recently reported that shoplifters are as much as 21 times more likely to get items past a machine than a human, making the whole ordeal seem much more accessible. 

It seems though, that thanks to several technology advancements, we can expect to see a rise in retailers tackling these concerns. Many have turned to the use of AI or additional security tagging methods to help their machines determine when the customer has not paid. American-based discount department store Target were recently revealed to collaborate with technology company TruScan to deploy a new system for their self-checkouts which uses cameras and sensors to detect items that shoppers fail to scan, notifying them with audio and visual cues.

Q: How effective are security tags in reducing shrinkage?

A: Security tags are an effective measure in reducing shrinkage, though their effectiveness can be influenced by several factors. The type of tag used plays a significant role, with more visible tags often resulting in greater reductions in shrinkage due to their deterrent effect on potential thieves. RFID tags are a popular form of retailing technology - they’re highly effective at triggering sensors and provide an accurate method of measuring stock within the store.

Additionally, the overall conditions within a store also contribute to the effectiveness of security tags. The response of store staff, the layout and accessibility of product displays, and customer behaviours all play crucial roles. Well-trained staff can quickly address potential thefts, while thoughtful product placement can minimise opportunities for shoplifting. Understanding and managing these factors can greatly enhance the impact of security tagging on reducing shrinkage.

Q: What are the biggest challenges retailers face with security tagging?

A: Opportunistic theft remains a challenge for retailers. Whilst security tags are a deterrent, additional preventative measures such as surveillance cameras, image recognition technology, and anti-theft devices may be an extra essential for security.

Employee theft is another notable concern, as some colleagues may find ways to bypass security measures. Additionally, there is the problem of vandalism and product damage, where thieves attempt to remove tags, often causing harm to the merchandise. Once these products are damaged, they cannot be returned to the shop floor meaning potential losses to profit. 

Ensuring the safety of both customers and employees is a critical consideration, especially due to the rise in violence and confrontation for grocery store staff. As a consequence of these challenges, retailers must continuously adapt and integrate various strategies to reduce the likelihood of them happening. 

Q: What trends are you seeing in the retail industry regarding loss prevention?

A: I expect to see a rise in the number of retailers working collaboratively with law enforcement and BID's (Business Improvement Districts) to run CCTV footage through police databases to identify and apprehend prolific offenders. In the world of retail, we have seen big corporations like Tesco utilising CCTV security checks to ensure that customers are vetted before they can enter the store. 

This seems like an extreme measure but it could be a useful approach for frequently targeted stores. Similarly to this idea, retailers will also continue to work with the police force, which may show a greater presence on the shop floor. We’ve seen this with big-name retailers like John Lewis, Co-op, Tesco, Sainsbury's and Waitrose, who have invested £600k into the ‘Project Pegasus’ initiative to help crack down on shoplifting gangs.

Additionally, prioritising the safety and well-being of employees will remain a huge focus. Retail staff are facing an increase in verbal and physical abuse and as a consequence, campaigns are being launched to protect retail staff. Organisations like the Retail Trust are advocating for changes that support the safety of retail workers. 

Retailers will also continue to embrace technology by integrating it into their current systems to enhance loss prevention efforts. Expect to see an increase in the use of AI, RFID, and improved surveillance in the near future.

Q: Can you share a case study of a retailer that significantly reduced shrinkage through security tagging?

A: One particular case study that I found interesting explores the effectiveness of security tagging in retail. Surprisingly, there has been little research conducted around this area - there has not yet been a systematic review of the effectiveness of security tags. This case study provides evidence of how security tagging reduces  theft, identifies key mechanisms and conditions affecting tag effectiveness, and summarises information on implementation and the economic costs of tagging.

The study conducted a mixed-methods review, including keyword searches of both published and unpublished literature, hand searches of relevant journals, forward and backward citation searches, and consultations with four retailers. 

Out of fifty studies identified, eight provided data on how well security tags work. Five of these eight studies showed that tags helped to reduce theft, but differences in tag types and results made it hard to combine the data. Tags might reduce theft by increasing risks for thieves, reducing rewards, or by making theft harder. The effectiveness of tags varied based on the type of store, staff, customers, type of tag, product, and the level of police involvement. Implementation issues mainly involved staffing and the way the tags were used. 

The study shows us that using security tags in retail is complex. Different tags work in different ways depending on various factors. It's hard to say for sure how effective tags are at reducing theft, but more visible tags seem to work better than less visible ones.

Q: How will emerging technologies impact security tagging and shrink reduction?

A: Thanks to various new developments in the technology sector, things like AI and machine learning are set to revolutionise security tagging and shrink reduction. These technologies have the ability to take in valuable data, which can then be used to identify patterns and detect potential threats. For instance, AI can recognize unusual shopping behaviours and alert staff in real-time, while machine learning algorithms can predict and preempt potential theft scenarios based on historical data. However, it will be important to eradicate bias from these systems where possible. 

It’s true that as technologies evolve, so do the associated risks. Retailers must continuously review their risk management protocols to navigate the shifting retail landscape. Retailers need to ensure that they are staying up to date with new technology and training staff to handle new types of threats - whilst also maintaining a flexible approach to security management. 

Q: Staying on the theme of training, how important is staff training in the effectiveness of security tagging systems?

A: Staff training is crucial to the effectiveness of security tagging systems, as properly trained employees will ensure the correct application and removal of security tags. 

Additionally, an emphasis on awareness and an effective response to alarms and the ability to distinguish between false alarms and actual thefts is a vital skill for staff to have. Correct training also sees a reduction in human error, which can be a huge contributor to security breaches, ensuring compliance and cost savings associated with stock shortages. 

The correct level of staff training also improves morale and confidence, leading to employees feeling valued in their role and empowered to be an active part of the security measures - ultimately leading to a more secure and efficient retail environment. 

Q: What preventative methods have Dee Set been involved with in the past year?

A:  Due to the rise in shoplifting and organised retail crime, we worked with supermarket giant Asda to help them take proactive, innovative steps to help deter theft in their stores by trialling new theft-resistant fixtures called helix hooks.

To tackle this issue, a 9-week program was launched, deploying 172,600 patented Helix Hooks in high-theft areas across over 600 Asda locations around the country. Within 3 months of completing the rollout, the results were truly impressive - the addition of helix hooks cut shrinkage significantly! Asda praised the initiative, which led to further awards and recognition for this successful project.

Additionally, Dee Set has recently trialed the introduction of security net bags (with added alarm systems) to help combat the rising theft of alcoholic beverages. So far, we've rolled out security net bags in 71 store locations. This effort, spanning more than 3100 hours of planned work (with expectations of increased hours due to heightened shop floor activity), is scheduled to continue over a 12-week period, extending through to week 32. 

The primary motivation behind this trial stems from the need to combat high shrinkage rates in this selection of stores. By trailing these security measures, we aim to assess their effectiveness, potentially implementing them across all store locations. Each week, dedicated teams of 5-10 merchandisers have meticulously carried out the installation with careful planning, ensuring efficient deployment across chosen regions.

Our teams currently plan visits to one store per region weekly, allocating resources based on the availability of net bags. At each location, a thorough process unfolds over a minimum of three days: Removing existing security tags, securely placing items like sprints and high-value champagne into the newly introduced net bags, and replacing outdated UFO tags.

Overall, it's clear that security tagging is a crucial method in the fight to combat shoplifting and reduce shrinkage. The effectiveness of security tags can also be enhanced by emerging technologies to provide a strong deterrent and accurate inventory tracking. However, their effectiveness relies on well-trained staff and robust risk management strategies. By combining our advanced technology solutions with skilled personnel, retailers can significantly reduce shrinkage and ensure a safer shopping experience for all. 

As time progresses, we look forward to seeing how security tags will evolve and we hope that factors like the cost-of-living crisis, which may arguably make shoplifting seem like the only viable option for vulnerable shoppers, reduce significantly.

Unfortunately, it appears as though the issue of shrinkage may stick around for a while. Luckily for you, you don’t have to tackle one of retail’s biggest problems alone. If you’re concerned about the impact that shrinkage is having on your business or you’re looking to improve your security protocols, we should be able to help! Our team of retail experts are experienced in the handling and setup of security tags. Let us help keep your products safe from theft so that you can focus on other pressing matters - get in touch to see how Dee Set can help you!