Companies such as Indyme have developed a business model directly from the problem. So-called smart response systems are intended to combat theft and reduce losses.
American retailers are accepting customer frustration, falling consumption and such costly protective measures. Because the problem seems to be bigger than the risks of inconvenient resistance.
Damage of more than $100 billion
According to a just-released retail survey by the NRF, “shrinkage” caused retail losses of $112.5 billion (€105.9 billion) in 2022 alone. By 2021, the losses would already amount to more than 90 billion dollars (85.1 billion euros). The costs are not only high for retailers, they say, but also for society. This would result in increasingly problem areas where no one wants to shop anymore.
The extent of this development goes far beyond simple theft of goods. Retail representatives, as well as politicians in the US Congress, have long been talking about this nationwide phenomenon as “organized retail crime”. A fighting term that is intended to remind us of organized crime involving robbery, drug and weapons trafficking.
There are no official figures from the authorities. But in a study published this year, the NRF describes “organized retail crime” as an increasingly pressing problem. In the interview, David Johnston, Vice President of the NRF, comments on the results: “These acts are happening more and more openly and the thieves have become increasingly bold and aggressive in their attempts to steal goods.”
In the past, these were almost invisible crimes, says Johnston. But today they are taking place in front of the public. Security risks for both employees and customers increased.
Claws for a shadow consumption market
According to his association’s study, the well-organized thieves’ gangs are “continually finding new channels to resell the stolen goods.” In the past, the stolen products could mainly be found on the Internet using key terms. The abbreviations NWT stood for “new with tag” and BNWT “brand new with tag”, i.e. “new with label” or “brand new with label”. The thieves now seem to be increasingly selling their goods on real black markets.
This can also be observed in New York, for example in the Harlem district, north of Central Park. In front of a large shopping center on 116th Street, people have set up makeshift sales tables on the sidewalk. Next to fake sunglasses and handbags are a dozen packs of toothpaste from the cheap Crest brand. Police officers stand by but don’t pay any attention.
Just around the corner, retail giant Target just announced that it will be closing its East Harlem location along with eight other stores across the country. The reason here is also: “Theft and organized retail crime”.
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