The issues that plagued retail stores during the days of the pandemic and immediately after don’t seem to want to loosen their grip on the embattled retail market. As we come out of the holiday season, it may be evident to many retailers that something needs to be done to right the ship. Many are dealing not only with labor shortages brought upon by an aging workforce and an overall lack of interest in retail jobs but also with the pervasive issue of theft and shrinkage.
In 2022 alone, retail stores lost $112.1 billion to shoplifting, and shoplifting losses grew 19.4% year to year. Other avenues of retail shrinkage, including employee theft, administrative or shipping errors, vendor fraud, and product damage, are also hitting retailers hard.
Retailers are seeking ways to boost sales, help the staff that they have retained, engage customers, and protect their stores from theft and shrinkage. The answer may lie in extra staff from experiential marketing pop-ups.
The shrinkage problem
Shrinkage — an overall loss of inventory due to a number of factors — is a considerable issue for retailers. It can significantly impact retail stores, often even contributing to a store closing for good.
Shrinkage directly affects a store’s bottom line. No matter how shrinkage or all-out theft occurs, it translates to a financial loss for the store. Shrinkage also chips away at a store’s profitability, impacting the business’s overall financial performance and health. In turn, costs passed down to the consumer could increase, potentially turning away customers and leading them to seek better prices elsewhere.
A high volume of shrinkage or theft can also negatively impact inventory. The constant need to replace stolen, lost, or damaged goods increases costs and complicates the inventory management process.
Probably most concerning, however, is how shrinkage eventually trickles down to affect the customer experience. When stores are cracking down on rampant theft, it can create a climate of distrust and uncomfortable surveillance within the store, and the negative impact on store inventory brought about by shrinkage can affect overall customer loyalty and trust.
Experiential marketing to combat shrinkage
Retailers are understandably concerned about keeping customers happy yet still addressing the ongoing issue of theft and shrinkage. However, many have encountered positive results from experiential marketing pop-up events.
These events bring more employees into the store and onto the floor, acting as a theft deterrent. It is also a more positive spin on the need for more “hands on deck” rather than the response of some retailers to theft in hiring security guards.
Experiential marketing pop-up events are created not only to put more employees on retail floors but also to engage directly with customers. They are designed to be explicitly eye-catching and attention-grabbing as soon as customers enter the store. Retailers can strategically place pop-ups in locations around the store that are bound to attract the most attention or may need the most attention to deter thieves.
Pop-up teams are trained as helpful greeters, making sure no one goes by unnoticed. The goal is not to make customers feel as if they are under surveillance but to let them know that the store is well-covered, which, in turn, leads customers to behave themselves.
The benefit of extra staff
Experiential pop-ups add benefits not only from a branding and marketing standpoint but also from a customer experience standpoint. With more eyes on the sales floor and more employees strategically placed throughout the store, the store can be under better surveillance without customers feeling like they are being constantly watched by security. This is a significant deterrent to theft, from both the customer’s side and the employee’s side. If a stick-fingered employee knows there are more eyes on them, they may think twice before dipping into the register.
More staff through pop-ups can also offer a quicker response should anything go awry. There’s a better chance of immediately catching suspicious behavior and taking care of the problem, hopefully stopping the theft in its tracks.
Extra staff can also provide additional customer assistance by showing the customers where things are located, answering questions, and engaging with them in many ways that a staff spread too thin may not have the time to do. Our own experiential marketing pop-ups engage with customers by handing out $10 or $20 gift cards. Sending customers on their way with free money in their pockets leads them to harbor good feelings towards the store, strengthening the bond and ensuring repeat business.
Lastly, more staff on site can also contribute significantly to employee safety, especially during busy holiday hours or late nights.
While shrinkage and theft will always be a part of the retail industry, it doesn’t have to be a problem that destroys businesses. Seeking out an experiential marketing pop-up team can be an affordable, accessible, and effective way to cut down on shrinkage and kick-start some incredible customer engagement in 2024.
Ray Sheehan is the founder at Old City Media.
Shoplifting stock image by Andrey_Popov/Shutterstock
