Retailers Take New Approaches to Fight a Growing Problem

NEW YORK — Retail uses for artificial intelligence (AI) are many, from predicting adequate staffing levels to rolling out the right pricing and promotions at the right time to the right customer. AI also can be used to overcome a challenge most retailers don't want to think about but nearly every retailer has to face: crime. 

"The beauty of AI is it's allowing us to do multiple things at once and do things that can be dangerous and disgusting, but it does things to give us a heads-up," said Read Hayes, research scientist/criminologist at the University of Florida and director of the Loss Prevention Research Council (LPRC).

Speaking on a panel entitled "Combatting Organized Retail Crime With AI: Insights From Kroger and Jacksons Food Stores" at NRF 2024: Retail's Big Show on Jan. 14, Hayes explained that LPRC works with 94 retail corporations encompassing 300,000 stores to understand what they are experiencing when it comes to crime. 

"What's happening is growing in scope and scale and, even in the life safety standpoint, it's becoming more aggressive," he said, adding that the problem is seeing year-over-year growth. 

Mike Lamb, vice president of asset protection and safety at Cincinnati-based The Kroger Co., echoed that retail crime is a growing problem and noted that it is a bigger problem in some markets than others. "In the absence of technology and advancement of AI, I would suggest we would be in a far worse place," he remarked. "It is indeed a problem and it is a growing problem."

That being said, Lamb stressed that for Kroger — as with any retailer — the safety of its associates and customers is paramount. "Our top priority is life safety. Nothing in this store is worth more than our associates and customers," he said.

One area of the store that has gotten a lot of attention lately is self-checkout. A fall 2023 survey from online lending marketplace Lending Tree found that 15% of respondents said they have purposely taken an item while supposedly scanning. Additionally, while 60% of respondents reported feeling remorse afterwards, 44% plan to steal items again when using self-checkout.

According to Lamb, Kroger "loves self-checkout, but we know there are individuals who take advantage of it."

He pointed out that theft at self-checkout has evolved over the years to include:

• Skip scanning, whether on purpose or the items were not successfully scanned;
• Ticket switching; and
• Leaving items in the cart and never introducing them to the point-of-service. 

"Self-checkout is a land of opportunity," Lamb said. "It is important to do both: mitigate the safety risk and loss to the company. "

Crime in Convenience

Robert Hampton, vice president of technology services and innovation at Meridian, Idaho-based Jacksons Food Stores, agreed that safety is the top priority, and added that safety includes detecting slip-and-fall hazards and large gatherings outside the store at night that the associate may not be able to see.

When it comes to crime, according to Hampton, the convenience channel faces some of the same issues as grocery, big-box or other retail channels, but not all. "In convenience, you don't have hundreds of people storming the store," he said. "But we do see fuel theft and gift card scams."

With drive-off fuel theft a problem, Jacksons is implementing forecourt technology solutions such as cameras that capture the fueling experience and a vehicle's license plate. The convenience retailer also employs a computer on the fuel island that times and monitors every fuel transaction. 

"When somebody engages the dispenser, it activates a timer. If somebody has a specific type of vehicle that maybe has a ladder in it and it is taking more than the amount of fuel that should be required for that type of vehicle, you can set off the alarm and even shut off the dispenser, so the fuel stops flowing. It can also alert law enforcement," Hampton explained. 

NRF 2024: Retail's Big Show, the National Retail Federation's annual show, took place Jan. 13-16 at the Jacob K. Javits Convention Center in New York.