In a TikTok video from the summer, an employee at Boots, the Walgreens-owned drugstore in the UK, proudly shows off her new work swag.
But it’s not a tote bag or branded water bottle: it’s a bodycam strapped to her chest to capture shoplifting footage.
Boots piloted its bodycam programme in August 2022 in 83 stores. It’s now rolled them out to a further 225 stores, with security and incident manager Iona Blake noting a 45 percent reduction in incidents in stores where staff routinely use bodycams. It’s also added a central security checkpoint that allows announcements to be made via store tannoy when cameras pick up unwelcome behaviour.
Theft in stores isn’t a new concern, and brands routinely account for a small percentage of “inventory shrink” on their annual profit-and-loss statements. However, the mounting cost of living and an uptick in organised crime is applying fresh pressure on retailers, with one Staten Island Ulta Beauty store losing $6,000 worth of merchandise in a single theft in June. Meanwhile, Sephora announced in November that its assortment of fragrances including the likes of Maison Margiela Replica and YSL would no longer be merchandised in all US stores. Instead, only testers will be on display, and if a customer wants to purchase, they’ll need to ask a store associate to unlock it for them.
Data on retail theft remains unclear; in December, the National Retail Federation (NRF) retracted a key claim from its earlier April report that stated “nearly half” of the $94.5 billion in inventory losses was the result of organised crime. But beauty stores are still minded to make a change.
While putting items under lock and key and beefing up security sounds like a simple fix, heavy surveillance and a lack of play don’t make for a pleasant shopping experience. That’s a problem for beauty retailers already struggling to incentivise shoppers to spend more time in store and part with more cash. Even big savings events aren’t resonating like they used to – according to the Johnson Redbook Index, the year-over-year sales growth for the week that spans the Black Friday shopping season was the smallest in six years.
Wizz Selvey, retail expert and chief executive officer of consultancy Wizz and Co, said “beauty is sensorial. Smell, touch, texture, staying power and performance have to be seen – or felt – to be believed.”
How Shrink Grows
The consequences of shrink are wide-reaching – Ulta Beauty cited it as one reason for cutting its operating margin forecast in May. The British Retail Consortium said the cost of shrink had reached $2.15 billion in the year to date April 2023, and noted that shoplifting had risen 27 percent in 10 major U.K cities.
Along with the thefts, incidents of violence and intimidation against staff are also rising, making it harder for retailers – many of whom saw high staff resignations during the pandemic – to cling on to remaining employees.
There’s also beauty’s inherent dichotomy: many products are often small in size but big in value. A single Tom Ford lipstick no bigger than a pack of gum is over $50, and fragrances often retail for triple digits for less than 100ml. While the grim sight of quotidian products like instant coffee and baby formula security-tagged isn’t uncommon, they’re bulkier and lower in value. In beauty, retailers can easily lose thousands of dollars in the blink of an eye as beauty products are quick for thieves to flip, too.
The tester-only model now employed by Sephora isn’t foolproof. While testers might be seen as disposable by browsing shoppers, every product designated as a tester is a product not sold. Courtney Somer, founder of fragrance brand Lake & Skye, sold in the likes of Nordstrom and Ulta Beauty, said testers are critical to their customer experience, but in some stores, they’re having to be pulled off the shop floor because they get stolen, too. Even if they’re not stolen, the sheer cost alone of testers can represent 7 to 14 percent of net sales for brands.
While shrink is led by customer theft, store staff can also be responsible, as employees have direct access to products in stockrooms. This kind of theft is not uncommon, but hard for companies to broach with retailers, so brands tend to discreetly factor it into their shrink calculations.
Stealthier Solutions
Panopticon-like security and padlocked products aren’t just a short-term frustration for shoppers: it can turn them off the experience altogether. As many previously mass-market stores like Target and Walmart premiumise with more prestige brands, losses are expected to rise.
“The in-store experience has to be better than the online experience, otherwise people wouldn’t visit in the first place,” said Matt Moorut, director analyst at Gartner’s marketing practice.
Online, he says, customers have more at their fingertips and clearer price comparison. What’s more, if the shop floor is busy, a customer might give up waiting for an associate altogether, meaning the retailer not only misses out on the original sale, but also the potential to upsell.
A heavy security presence doesn’t make for a relaxed shopping environment for anyone, but for many people of colour, it becomes threatening. In 2019, the Grammy award-winning artist Sza called out a California Sephora store after an employee implied she was stealing. The US arm of the LVMH-owned company subsequently shut all stores for a one-day diversity training session.
Hands-off approaches, like removing testers and requiring cabinets to be unlocked, may become more common because they’re simpler for retailers. But as Selvey said, “Having beauty behind a counter and not available to touch isn’t forward-thinking.”
Subtler, more hybrid approaches include rolling out digital IDs or RFID systems, which the UK beauty retailer Space NK and L’Oréal-owned Armani Beauty have dabbled in, said Moorut. Armani Beauty’s Düsseldorf pop-up in November 2022 enabled customers to scan purchases in their bag as they exited, with items charged via digital wallets, à la Amazon Go stores.
In Space NK’s case, not only do digital IDs track a product from warehouse to shop floor, they also improve the retailer’s ability to capture a customer’s wallet. “These tags make it easier for a store associate to tell you that while they might be out of stock, a nearby store may have the product,” Moorutt said.
Otherwise, plain-clothes security staff and the use of bodycams may become more common. Somer said at Lake & Skye, they’re prioritising efforts such as gifts with purchase and gratis products to try and combat the effects of having to remove the testers, in an effort to keep discovery ongoing.
There is, of course, the old-school approach. On leaving London department store Selfridges, one is faced with doors so heavy, it takes your full, deliberate bodyweight to open them. No speedy getaways there.
