A Sound Loss Prevention and Asset Protection Strategy Could Mitigate the Rise in Retail Crime

A spike in retail crime and the changing dynamics of the city were two reasons cited for the permanent closure of the iconic San Francisco Centre Nordstrom store, a staple for over three decades. Chief Stores Officer Jamie Nordstrom had previously alerted employees about the company’s decision not to renew its lease, citing the evolving challenges of the downtown market. This closure reflects a broader trend, with the Westfield San Francisco Centre mall, the site of the Nordstrom location, facing reduced sales and foot traffic, leading to its decision to return the mall to its lender. Recent data from the University of Toronto highlighted San Francisco’s struggle post-pandemic, with the city achieving only 32% of its 2019 traffic. The National Retail Federation emphasized the role of increasing crime in the area, which has influenced several national brands to close their San Francisco outlets. Crime can lead to store closure decisions, but is that the primary factor in reduced retail traffic in some major cities? Is pulling out of a city as populated and tourist-heavy as San Francisco a wise response to increases in retail crime or a reactionary measure without a long-term strategy? Mike Watson, Undergraduate Director and instructor at the Department of Retailing at the University of South Carolina, raises some compelling points about how retailers should think about shrink mitigation strategies that prioritize a positive customer experience and reduce retail crime. Mike’s Thoughts “Pulling out of a city can also damage your brand, which again is why retailers will point to theft as a reason as opposed to other factors. Wanting to change how they operate in the city might be seen as too expensive.” Understanding Retail Crime and Effective Responses “In response to the news that we continue to see around retail theft, it’s important to compile information from a variety of resources. This helps to understand the true nature of the problem and then to form strategies that are effective in response. What often happens is a reaction to an issue that has been defined by an incomplete understanding of the problem. This is often due to pressure from both internal and external sources. This is frequently the case in retail in its response to shrink problems. We see companies react in a variety of ways across a wide spectrum of possibilities. This includes bankruptcy, customer bans, and, more commonly, putting more and more items behind glass cases and lock and key. A much more effective response is for retailers to understand what is at the core of the issue and not just the surface. It is at the core where retailers can really make changes that leverage real transformation. Retailers must balance customer experiences and loss prevention tactics. For example, locking more and more inventory behind glass cases is potentially a great way to prevent theft, but it’s detrimental to the customer experience. In fact, it frustrates loyal shoppers and i