05/05/23
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Shoppers across the world are increasingly forced to make an uncomfortable choice when they want to buy something — for example a men’s razor at their local drugstore: ring a bell to summon an overworked retail employee, chase them down all over the store, or walk away.
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More physical retail stores are locking away merchandise amid rising concerns about retail theft. But a solution that's designed to help companies' bottom lines — placing more and more products under lock and key — may be pushing away customers who don't want to wait for store employees to help them get locked-away products.
Theft in physical retail stores is a major issue that has been on the rise for a long time now.​ According to the National Retail Federation's 2021 National Retail Security Survey, customer shoplifting cost the U.S. retail industry approximately $35.3 billion in 2020. This is a significant increase from the estimated $17.5 billion in losses due to shoplifting in 2010. However, this is just a part of the problem as overall, $61.7 billion in losses occurred in 2020 due to employee theft, vendor fraud, and administrative errors.
The increase in shoplifting losses may be attributed to changes in the economy, the rise of online shopping, and shifts in societal attitudes toward theft. Moreover, the COVID-19 pandemic has also had a significant impact on the retail industry, causing a rise in shoplifting and organized retail crime during the pandemic due to factors such as reduced store staffing and increased demand for certain types of products.
Many retailers are turning to lockable glass cabinets to combat shoplifting and reduce the risk of Covid transmission while still allowing customers to view high-value items. Glass cabinets are increasingly popular for showcasing and accessing luxury goods like watches, jewelry, smartphones, and designer handbags, as customers seek a touch and feel experience when shopping for expensive items. However, the growth of glass cabinets has happened whilst there has been a reduction in in-store sales staff, as retailers implement self-checkout systems and face staff shortage challenges due to the pandemic. Customers can become frustrated when trying to access goods behind glass cabinets without sales staff around to unlock them. The process can be inconvenient, time-consuming, or overly restrictive, especially if customers cannot touch or try on the products. Additionally, poorly presented or lit cabinets may limit a customer's ability to evaluate the product. Customers may also feel disheartened by these overly restrictive security measures, particularly for common items such as deodorant, or if asked to provide excessive personal information for try the product.
The process of unlocking the cabinets can be slow and cumbersome, particularly when the store is busy or when there are limited sales staff available. Customers may become frustrated when they have to wait a long time to access the product they want, especially when in a hurry. If customers become frustrated waiting for a salesperson to access a product behind a locked cabinet, they may leave the store without making a purchase or turn to online shopping instead, costing the physical retail stores dearly.
To make the physical shopping experience more convenient and seamless for customers, and to help increase their sales and sales processes, retailers are looking for ways to balance security measures with accessibility. Retailers are seeking to protect the customer, the product, and the store while providing a better customer experience.
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Considerations and Challenges
In a typical retail store, when a salesperson needs to unlock a glass cabinet with a metal key lock to show products to customers, the process can be time-consuming and inconvenient. The salesperson usually has to find their supervisor or manager to unlock the cabinet with a large keyring of keys for all the different cabinets. It is common in retail stores that there is only one set of keys for all cabinets for security reasons, and the manager takes full responsibility for all the keys. For example if a duplicate key is made and distributed to all salepeople, unauthorized access to the cabinets becomes a possibility at anytime by anyone (e.g the salesperson can copy the key at the local hardware store for a few dollars and share the key to a friend who may come back at another time and unlock the cabinet and steal the goods inside). If the manager hands over the keyring to the salesperson, they must immediately return it after the sale or when the customer leaves without purchasing.
Once the cabinet is unlocked, the salesperson must spend time with the customer presenting the product, highlighting features, benefits, and pricing, and then attempting to close the sale. No one else on the floor can access the keys to other cabinets during this time unless the manager is aware of which salesperson has the only set of keys in their possession in that moment. If the store is busy, or if the manager is busy with a customer, then unlocking many cabinets on the floor at any one time can become very troublesome or not possible.
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If the customer decides to purchase the product, the salesperson usually processes the sale at a checkout somewhere else of the floor. But first they must secure the product back inside the cabinet, retrieve a boxed version of the product from the locked storeroom before completing the transaction. If the customer decides not to purchase the product, the salesperson returns the product to its original location, locks the cabinet, and returns the set of keys to the manager. During this time, other customers may become frustrated and give up waiting for the keys to be returned to the manager and shared with another salesperson, causing a loss in sales.
Retail stores are seeking ways to streamline this metal key cabinet unlocking process by implementing modern technologies such as electronic locks that allow for connected access control, reducing the need for bulky keyrings, and eliminating the risk of unauthorized access. This ensures that salespeople can access the cabinets with ease when needed, allowing for a seamless customer experience, and preventing interruptions during the sales process.
Retail stores have been trying to streamline the process of unlocking glass cabinets with metal keys by adopting Wi-Fi/Bluetooth locks that allow salespeople to unlock the cabinets with digital keys. These digital keys create an online audit trail, recording who opened which cabinet at what time. Additionally, digital keys can be assigned to specific cabinets and time periods, such as during a salesperson's shift, and cancelled at anytime online remotely.
However, using Wi-Fi smartlocks requires setting up on-site Wi-Fi infrastructure, including routers, modems, and ISP accounts, as well as reliable mesh networks to ensure consistent connections. Moreover, Wi-Fi smartlocks are always on and listening for commands over Wi-Fi networks, leading to low battery life of the smartlock that may only last a few weeks. While some smartlocks can be wired to mains power, this may not be feasible for glass cabinets with no extruding parts.
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Moreover, smartlocks that use Wi-Fi to communicate between different sites require a specific type of Wi-Fi network linked through a Wide Area Network (WAN). Different Wi-Fi networks may have varying security settings, such as passwords or encryption methods, which require standardization or configuration. Configuring NAT or firewall rules may also be necessary to allow traffic flow between different Wi-Fi networks, making it a complex and time-consuming process to set up and maintain. These settings and configurations may create difficulties in ensuring compatibility between different smartlocks at chain retail stores located in various suburban shopping centers and locations. Moreover, incorporating other Wi-Fi devices from different lock vendors, smart alarms, or smart electronic roller doors can be challenging or sometimes impossible. Even configuring a cabinet smartlock to work with another smart doorlock on the same site, such as an office door, or an entry door in a car park without Wi-Fi coverage, or with any smartlocks at different locations can be a daunting task.
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What retail stores need is a connected smartlock solution that works out of the box, that does not require Wi-Fi, and which can work with a variety of hardware options for glass cabinets of all sizes through to entry doors and common areas and offices, and which has digital keys for unlocking and logging usage, and which ideally can be distributed automatically for every workers shift and stop working at the end of the shift.
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Value
Digital Keys has formed partnerships with lock manufacturers and physical retail stores to integrate its 5G IoT access control technology into glass cabinet locks and other locking hardware for secure and seamless processes for managing access in retail stores. But our company is not solely focused on improving access to glass cabinets on the retail floor, we're also focused on providing a connected solution throughout the entire supply chain process. In addition to working to offer a wide range of hardware options with 5G IoT, we are also making available our APIs to all companies and legacy software systems involved in the logistics process for physical retail stores. This includes procurement companies, transportation and shipping companies, warehouse receiving companies, inventory management companies, fulfillment companies, and retailers involved in stocking and selling the goods. The company aims to provide a secure, efficient, and transparent access control system that tracks goods and controls access online on every step of the product journey, ultimately ensuring that products are available to customers when they want them in physical stores. Whilst at the same time our systems can minimize theft and the costs and complexities associated with product logistics, but keep the customers coming back to physical retail stores and enjoying the shoping experience even more.
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