Shopping online became so common in the past few years that everyone thought it marked the beginning of a downward spiral for walk-in retail stores. Surprisingly, records show that the walk-in stores still stand firm and have an edge over their online counterparts.
However, the issue of theft is causing a significant problem among the physical retail stores. Big stores like Target and Walmart have taken some severe measures to prevent theft, and Dollar Tree is the latest to join the list.
Online Retail’s Limited Growth
Many predicted that digital retail stores would overtake the regular traditional physical stores as soon as they started. However, despite the success of some major brands like Amazon, data shows that online retail still needs to catch up.
For the second quarter of 2023, records show that e-commerce constitutes only 14.7% of retail sales. Even during its all-time high during the COVID pandemic, it only comprised 20% of the sales.
Consumers’ Preferences
Online shopping is highly convenient but not on the same level as physical walk-in stores. This is because consumers still value the immediacy and hands-on experience that in-store shopping offers.
Especially in the grocery and clothing sectors, people would rather see what they’re buying physically. They would rather touch and feel their quality themselves than trust pictures online.
Retail Theft and Organized Crime at Dollar Tree
Before, petty thieves mostly did retail theft, taking things they could hide in their clothes. However, retail theft is now an organized crime rig where gang members plan their heists judiciously.
This has affected the income and safety of physical retail stores, and their executives have complained bitterly. Target also had to shut down some of its stores due to this rising problem.
Shrink Rates Analysis
Retail theft, also called “shrink,” has increased over the years. According to The National Retail Federation, data shows that average shrink rates rise from 1.4% in 2021 to 1.6% in 2022.
This rise, which seems minuscule on paper, accounts for losses of hundreds of thousands of dollars and prompted retailers to take action against the growing problem.
Retail Theft and its Consequences
Major retailers, including industry giants like Walmart and Target, struggled with the rise of retail theft. Several gangs have emerged over the years, devising various schemes to steal from these stores easily.
As a result, there is a growing need for traditional retailers to take matters into their own hands and take action. So, the question is, what can they do?
Dollar Tree and Other Retail Stores’ Defensive Strategy
Recently, big retail stores have taken an unexpected step towards preventing store theft. Dollar Tree’s CEO spoke on the defensive approach to fight this problem in their stores, following Walmart and Target’s lead.
This multifaceted approach involves introducing new formats, securing items, and discontinuing stock-keeping units (SKUs) prone to theft. In simpler terms, they intend to lock up their high-value items.
Impact of Locked Shelves in Dollar Tree
There may be better solutions than the decision to lock up items as an anti-theft measure by Walmart, Target, and now Dollar Tree. This is because there is a significant impact on some of the major factors that make up a good shopping experience.
Locked shelves mean unreachable items, which might take a toll on the clerk who repeatedly opens and locks the things whenever a customer shows interest.
The Public’s Opinion on the Security Measures by Dollar Tree
While the idea of locking up valuable items sounds great to some, it doesn’t come without its disadvantages. This strict rule will cause a hindrance to the shopping experience of the customers present.
Therefore, customers have taken to social media to advise these traditional retail brands to find a better balance between safeguarding merchandise and maintaining a positive shopping experience for their customers.
Dollar Tree’s Strategic approach
In their bid to reduce retail thrift, Dollar Tree has implemented several other strategies. One of these strategies includes offering low-cost merchandise in the physical store while providing more valuable items on their online platforms.
This way, they can implement their anti-theft measures without jeopardizing customer satisfaction. This way also provides security for the store workers, ensuring their safety.
Considering Consumer Behavior
Many other traditional stores are still looking to find the balance between a good shopping experience and security for high-value items. Therefore, experts have advised them to consider customer behaviors before taking any steps.
For example, a customer waiting for a clerk to purchase a low-cost item might opt for nearby grocery chains. Evidently, this has to be taken into consideration to avoid losing customers.
Traditional Retail Stores Are Going Digital
Almost all traditional retail stores also want to maintain digital stores to balance out their online and offline visibility. These days, most of these retail brands have an online counterpart where people can shop from almost anywhere in the world.
Sometimes, the need for a stable online presence affects these stores negatively and causes them to manage their in-store experience properly.
E-commerce Challenges with Returns
Due to the fact that some products appear different from their online display pictures, returns are widespread in e-commerce. However, this poses a considerable challenge to the growth of e-commerce as a whole.
The inconvenience of returning an item and waiting to be exchanged and delivered again discourages many people from purchasing items online.