Target's CEO recently told a CNBC reporter on a media call that he's heard positive feedback from customers about their practice of locking up merchandise. Meanwhile, on social media customers are less than thankful, expressing their frustrations with wait times for accessing locked up merchandise and checking out.
To understand why Target is implementing this practice when customer feedback is mixed, Drexel News Blog spoke with Yanliu Huang, PhD, an associate professor of Marketing in Drexel University's LeBow College of Business. Huang gave insight into why stores lock up merchandise, how it impacts customers and employees, and other potential theft prevent and reduction practices.
Why do Target and similar stores lock up merchandise?
Stores lock up products to help deter shoplifting. According to the 2023 National Retail Security Survey (conducted by the Loss Prevention Research Council and the National Retail Federation), retail theft losses reached $112.1 billion in 2022, marking a 19% increase from $93.9 billion in 2021. Locking up merchandise is one intervention among others, including reduced store hours, stricter security operations, and even the closure of stores entirely, in response to the rising retail theft trend in the U.S. in recent years.
The items typically locked up to discourage shoplifting are often small, easy to conceal, located in areas with less staff supervision, and simultaneously desirable and profitable for resale. Such items include makeup and cosmetics, small electronics, groceries, clothing, accessories and more.
Is this effective in reducing the theft?
Yes, this approach seems to have a positive impact on reducing store theft by making it more challenging for shoplifters. However, it also complicates the customer experience and purchasing process. Having to ask and wait for a store employee to access locked items can be frustrating and cause a lot of hassle.
Consequently, many customers might be tempted to explore other options, such as the store's competitors or online platforms, for their purchases. Therefore, while locking up merchandise may effectively reduce shoplifting in the short term, its long-term impact on companies' revenue and profits remains uncertain.
Does this practice have any other effects – like customer satisfaction or loyalty?
This practice certainly affects customer satisfaction and loyalty. Locking up merchandise signals to customers that shopping in stores may not be secure, potentially influencing their perception of the store. Furthermore, as mentioned in my responses to previous questions, when customers encounter difficulty accessing, examining, and purchasing products, they are more likely to walk away and explore alternative options that offer a better shopping experience, such as other stores or online purchases.
Marketing research has firmly established that customer experience significantly influences customer satisfaction and loyalty. Positive shopping experiences generally lead to satisfaction with the company, fostering customer loyalty. Satisfied customers are more likely to spread positive word of mouth and remain loyal to the company, consistently returning to the store.
Conversely, negative experiences have a more profound impact on customer loyalty, as they tend to be more memorable and impactful. Therefore, when individuals find it frustrating to purchase locked-up items, this inconvenient and negative shopping experience can easily transform into dissatisfaction with the store. This dissatisfaction negatively influences the likelihood of returning to the store and long-term loyalty.
Does this practice also impact employees?
In addition to its impact on customers, the practice of locking up merchandise also affects store employees. Shoplifting could make retail employees worry about their own safety. Simultaneously, in an attempt to prevent shoplifting, employees may become more cautious in their interactions with customers. This heightened caution can have a negative effect on the positive and welcoming attitudes that they are expected to demonstrate towards customers.
Some businesses like Walmart ended the practice in 2020. Do you think locking merchandise will be a practice that continues, or does it depend on the social climate?
Locking up merchandise may be a practice that comes and goes periodically, depending on social settings and whether stores can find more effective ways to prevent shoplifting. While locking up merchandise seems like a straightforward approach to deter shoplifting, companies need to weigh its potential negative impact on customer satisfaction, long-term customer loyalty, and company revenue. To address these concerns, companies may explore alternative methods (other than locking up products) that can both reduce store theft and enhance the overall customer experience.
Do you agree with Target CEO Brian Cornell that customers appreciate the practice?
To some extent, I agree with him that customers appreciate the practice. Customers understand the importance of decreasing retail theft to maintain regular store operation and provide adequate product stock. In this sense, they might applaud the store for their efforts to lock up merchandise to decrease unsafe shoplifting. However, although they understand and might think the store is doing the right thing, when it comes to their actual shopping experience, the inconvenience and challenge to access and purchase locked merchandise will nevertheless lower their shopping experience.
This is consistent with consumer behavior theories where high-level and more abstract decisions (e.g., whether this action is right or wrong) are more influenced by the desirability of the decision, whereas more concrete and temporally proximal decisions (e.g., customers' actual shopping experience) were more impacted by the feasibility of the action.
Therefore, although customers might appreciate the practice and understand the company's efforts to combat shoplifting, when it comes to their actual shopping trips, the vivid inconvenient shopping experience resulting from merchandise lock up will very likely decrease their satisfaction and store loyalty as they place more weight on the feasibility of this experience.
Is there anything else retailers can do?
I would suggest that retailers consider adopting options that could deter shoplifting while simultaneously providing a positive customer shopping experience. Some companies are already implementing alternative strategies along these lines.
For example, companies might ensure adequate staffing in their stores to have employees present, engaging with customers and preventing retail theft. They can also strategically place frequently stolen items closer to the cashier or within the view of store employees. Another option is installing security cameras throughout the store as a deterrent. Stores can also place security tags and labels on high-theft items that, when not deactivated, trigger alarms when an item leaves the store.
Media interested in speaking with Huang should contact Annie Korp, assistant director, News & Media Relations, at 215-571-4244 or amk522@drexel.edu.
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