Amazon is known as the biggest retailer online, but most people don’t know that Amazon has taken two big steps into physical retail. The better known is Amazon’s recent purchase of Whole Foods, but last December the tech giant quietly opened a small grocery and convenience store, Amazon Go, that works differently than any other.
At Amazon Go, shoppers are tracked with a series of cameras and sensors the entire time they shop. You can just walk out the door without paying a cashier, they say it feels like shoplifting, and the items are automatically charged to your credit card. While this looks like a science fiction movie, the technology is in place today helping retail store managers thwart shoplifters.
500 Shoplifting Thefts Per Minute
Shoplifting may not seem like a big deal to regular customers who pay for the goods they take home, but it is a huge problem across the United States. In fact, there are about 500 shoplifting incidents per minute, performed by a combination of professional thieves and amateurs trying to sneak away with a freebie.
The total cost of shoplifting and other fraud to US retailers was nearly $50 billion in 2016. Total inventory shrink was 1.44% in 2016, according to the National Retail Security Survey. Of that missing inventory, 36.5% is attributed to regular shoplifters and 30% to employee theft. If that 66.5% of list inventory could be plugged, that would be a massive win for retailers and the customers who pay for theft in every purchase.
The History of Anti-Shoplifting Technology
Until recently, retailers relied heavily on closed circuit cameras and human security guards to prevent thefts. This is a somewhat effective method to curb theft, but its shortcomings are glaring.
A human cannot reliably see every time someone shoves a small item in a pocket, bag, or down their pants. Even with a Las Vegas casino sized operation, it would be near impossible to catch every thief in the act and stop them before heading out the door.
Steven Muntean, CEO at security investments firm OverWatch Capital, notes the value of existing video systems when integrated with monitoring software. “The evolution of real-time video monitoring surveillance along with loss prevention agents has significantly helped reduce shrink.” Existing video systems “allow virtual loss prevention agents to communicate with suspects and provide real-time information to law enforcement and loss prevention personnel.”
Magnetized and RFID tags add another layer of protection. Any time someone walks out of a store with the tag still attached or activated, the door loudly beeps informing staff of a potential theft. Not all retail workers respond to the loud beeps, limiting effectiveness, but for high price tag items the cost of adding a security tag is worthwhile.
Thanks to machine learning and artificial intelligence, cameras may be able to spot known thieves with facial recognition technology. It turns out that many shoplifters return to the same stores again and again even after getting caught. New video technology is doing a good job at improving theft reduction, with one vendor reporting 20% to 30% reduction in theft after implementing its system.
Improvements to RFID
Touchless technology is nothing new, but there are advances taking place in the Radio Frequency Identification, or RFID, tags used to prevent theft. This is the real power of technology coming to life in retail security.
RFID tags are cheap today. A quick Google search found tags as a low as 7 cents each when purchased at high volumes. These tags can give every single item in the store, or at least every item valuable enough to spend 7 cents protecting, a tag and unique tracking number in the system.
If a tagged item is scanned, it is updated in the store’s database instantly and the buyer can leave the store worry free. But if an item passes through any of the store’s doors without going through the checkout process, it will alert store security.
Victor Ong, Vice President of Marketing at computing technology service provider Premio, points out that “Business owners or loss prevention personnel are able to track stolen merchandise in real-time as it moves to the door, which make shoplifting more difficult.”
This new technology gives incredibly granular shoplifting and loss tracking, plus a solid security measure to prevent shoplifters from leaving the store with unpaid items in tow. But this is the very technology Amazon is using in its Amazon Go location to give shoppers a cashier free checkout.
The Next Evolution in Retail Security & Convenience
If a 7 cent RFIT tag is added to every single item in a store, there is no reason self-checkout can’t be the entire shopping method of the future. Grocery stores and other retailers with self-checkout lanes save money by going without cashiers, but those lanes also operate on somewhat of an honor system. What’s really stopping shoppers from tossing an extra item or two in their bag on the way out when paying for everything else?
Some shoppers might even steal an item accidentally that was stuck in another item or hidden somewhere in their cart. The new systems employed by Amazon Go put that all to an end for good.
Shoppers at Amazon Go “check-in” to the store with an app when they arrive, and cart and ceiling mounted cameras work with cart mounted sensors to detect every item you pick up and put in your cart. If you pick up an item and put it back on the self, you can expect an email or notification suggesting you buy the item later, which is a huge advance in retail marketing. But the security features are instantly valuable for business owners.
But when everything a person takes out of the store is instantly charged to their credit card, theft, by definition, goes to zero.
The Future Is Coming Fast
Business owners do not have to adopt the newest and best security practices, but ignoring those technologies may cost you more than investing right away. If you are short on cash, a small business loan can help you get upgraded sooner.
The future of shoplifting technology is here and rolling out soon. Act fast to beat the criminals before they beat you. In this game of cat and mouse, the lion of anti-shoplifting is just around the corner.
This article was originally written on November 16, 2017 and updated on February 2, 2021.