Target Is Closing Nine Stores Due To Theft & Organized Retail Crime
Target has recently announced that it will be closing 9 of its stores in 4 states due to theft and organized retail crime. Among the stores that will be closed are one in New York City, two in Seattle, three in Portland, and three in San Francisco. The stores will be closing in October 21, 2023. Target operates 2000 stores. Closing nine doesn't seem to be a lot. However, in recent years many brick and mortar stores have been struggling to compete with online shopping. While I don't have any reason not to believe the reasons Target has provided for closing these stores, I believe revenue and profitability of various locations also play a role. In this post I would like to explore the current and future challenges physical retail stores have been and will be facing in coming years. I don't have the answers. All I have are questions.
It does sound alarming when a major retailer with decades of experience is not able to come up with a solution for ages old problem. Shoplifting, theft, and even organized schemes to steal are not new. This is not a new problem. I am sure Target had systems and measures in place to address them. But at the same time, I can see how stores can write off theft as cost of doing business. Now when this cost exceeds the profits, it may be a good idea to close the stores if there are no solutions are available. What I mean is when things were great and retail was super profitable, perhaps the losses due to theft weren't significant enough to bother. Operating stores would still be profitable. Now when chain of stores, or individual locations start performing poorly in profits, any losses however small they may seem will be require attention. I am not sure if this was the case with these stores. My questions is why now? What has changed?
Perhaps organized retail crime got more sophisticated and security systems in place no longer were preventing these crimes and losses. Perhaps crime rates went up in the locations significantly. Or maybe even legal or political changes in certain areas may have had some influence. I remember a while ago reading an article that there was some new law in California made shoplifting not a crime. Something that was a felony before now was just considered a misdemeanor or something like that. In other words the punishment for the crime was lowered or completely removed that it may increased shoplifting. I haven't research on this topic much. But I can new laws or political decisions in various jurisdictions may have made getting away with shoplifting, or retail theft easier. The decision of closing these stores could be political one as well. Because I continue to wonder why such drastic measures as closing stores. Surely, there should be solutions for the issues Target stores are facing if it has to do with theft or crime. In other words, Target might be sending signals to local politicians or lawmakers that they need to act or Target will shut down. I don't know I am just speculating.
Closing only nine stores in specific locations doesn't sound like Target actually has business troubles, but perhaps this problem is just isolation to these certain locations at this time. Just like any other physical stores Target has been facing a massive competition with the shift to online shopping. Those who have adapted, that includes Target as well, have done ok so far. Because they too were able to show competence in online marketplace, and have been improving their online presence. Online shopping will continue to grow is it not yet decided if brick and mortar stores will still be around in years to come. I would like to think they will. There is something special about physical stores. However, even if physical stores survive they will face other challenges like automating the entire process. Amazon was among the leaders in developing stores where there is no need for cashiers. The technology is already available, and there are multiple different kinds. The one I recently saw as that utilized some kind of hand scanning feature when customers enter the stores and any item the grab would automatically be added to their cart list and automatically paid when they leave the store. I am sure this will continue getting better and more and more stores will be utilizes such technologies.
Now question is, how would automated stores deal with theft and organized retail crime? First, I believe there are systems and technology already available for crime detection and prevention. And I am not just talking about cameras. Moreover, as AI is being utilized in different industries, I am sure its in works for retail spaces too. I am not sure if all of the technology is good or bad. But I am certain there is plenty of research and development funds and resources are being dedicated for it. Automation and AI in stores will definitely be tried.
The entire retail business, structure, and system will probably have to be reinvented once again. While security and safety of workers, customers, and neighborhood is super important, the entire demand and how we utilize various businesses and technologies makes one wonder how everything should be reimagined once again. To make physical stores interesting again, retailers will have to consider new creative ways to attract customers, not just for sales. Retail stores would have to offer much more than products they sell. Perhaps some kind of experience, education, entertainment or quality time. This new systems would have to consider how to make deliveries efficient without relying on shipping companies and waiting for them to innovate the ways of their service. Of course this would also have to include sophisticated online presence and tools for customers to choose from.
In fact in their announcement Target does emphasize their focus and investment in cyber security as well. They are not only considering the safety for workers and customers in their physical stores but also for their online services as well. So many companies have lost customer information due to various hacks and companies lack of cyber security measures.
While these stores are closing, it doesn't look like Target would be laying out employees in these stores, but rather will offer them to continue their employment in other stores that will still be open in those locations. That does suggest that Target indeed is not having financial difficulties, and this is not the start of some chain closures in more locations. Let me know your thoughts in the comments.
While I'm not sure about the other locales, San Francisco has effectively decriminalized shoplifting. Brick and mortar retailers aren't going to be able to survive in that environment.
https://www.wsj.com/articles/san-francisco-shoplifters-theft-walgreens-decriminalized-11634678239
Target of shoplifters, bad joke aside, in 21st this should not happen.
I think the reasons for closing are not credible or plausible.
Hi, I hope this doesn't happen in my country and stores start closing due to the rise of crime, nice post.👍👍👍
Wow. The security technology that has been implemented is quite impressive. I can imagine the hand scanning technology implemented in my country. People would make a lot of noise but at the end of the day, it's extremely necessary.
Earlier this year, my last job in retail was fustrating for us cashiers due to the security tags attached on so many products. Even laundry detergent and almost all of the clothing were tagged, sometimes two or three times.
This presented a problem at the register, as in a 20 item order, half of them required tag removal. It wasn't easy as the removal unit frequently malfunctioned, resulting in long lines and customers angry that they had to wait. In future, I see stores with NO product on the sales floor, and just photos to click on, with all of the actual stock located in the back to deter theft.
This is just sad. While im also in support of online shopping sometimes. Nothing beats the feeling of physically going into a store and doing shopping in person. I hope this will be the last of it. And those crimes be persecuted.
Never heard of this store before, nor about the news, but it's definitely something scary and yet another proof that the world is going in the wrong direction...
Its so difficult to complete with online retailers. And also shoplifting makes it un beneficial for physical stores !
I wonder why people are engaging in criminal activities that will make companies like this to later shut down
And this will affect a lot of people
They will lose their jobs
This is really sad and bad to hear. I strongly hope it will not affect the company
I’ll join you on the doubters side and choose to believe target has seen an opportunity of closing off shops without alarming investors and it’s share prices.
In the case of AI what you have pointed out is critical. Re invention is necessary if at all it is to thrive.
Big businesses have been pushing the agenda but it will struggle to find its place with regards to taking over systems that where built for man. Hollywood and the writers guild are an example of note. Man will not back down with out a fight. With that said It’s clear AI is in its infancy and a lot of work has to be done for it to blossom or archive anything ground breaking to move humans.
Hola, realmente ya vamos en camino a las tiendas inteligentes como Amazon, Ali baba, entre otras y muy pronto no existirán tiendas físicas todos compraremos on line
That's what I also thought after reading the headline. It is a bold action to deliver an explanation regarding security. I cannot imagine such a statement, which implies that public authority is weak, was made in Turkey. I also thought political reasons could have caused such an announcement.
Shoplifting has increased due to the high cost of living which would have contributed the closure of these stores.
This is just the beginning!
Way more stores to do same. And now government is discussing opening government stores…. This is the takeover? Or no? What do the rest of ya think?
I haven't been in a physical store since before COVID. At first I stayed away for health reasons. Now, it's just a bother to go in a store. Online is so convenient. Easy to compare prices and quality. Reviews. For people who like to walk around and browse I guess a store closing is a loss. It certainly seems to be a loss of jobs. But society evolves.
I thought, as I read your blog, of London in the 19th century. Crime was rampant. Whole neighborhoods were off bounds because of the crime (as they are today in many U. S. cities). Punishment was harsh. Hanging (public!) for theft. Debtors prison. Did that lower crime rates? No. The thing that lowered crime rates was an improvement in standard of living. More jobs, better education, a growing middle class that was invested in society. Maybe that's where we should look. Why are people acting without regard for their futures or for the consequence to society? Why are they so disconnected from the mainstream that their values prompt them to crowd together in rampaging theft gangs?
There is no easy answer, but your discussion is thought provoking.
I think it was bound to happen. A lot of the crime in those cities are quite bad and the police aren't really going to do much. Personally, I don't blame them for closing those stores because it's the government and public security that is the issue. It makes me wonder if online is the way to go.
Since the inflation has increased, the same is happening here, people are closing their businesses because everyday thieves steal things and some people even kill, so this thing is completely incomprehensible. Due to which there are many entrepreneurs who are forced to end their business.
When they say "organize retail crime", I began to think beyond mere shoplifting. Could it be that there may be an organize trick by the top employees and other subordinate staff of Target who may be much involved in the policy formation that in other way traunket the system, especially in this selected areas or locations. Well, Target wears the shoes so they know we're it pinches.
Hmmm. One could think that online businesses opportunities are seriously affecting physical businesses. It does look like customers' patronizing online stores makes physical store redundant. If so it is, the management could opt for closure. But then you also mentioned the issue of sending warning signal to the authorities to adopt proactive measure against shoplifting.
In whichever way, the fact remains that the advancement in digital economic system and online transactions would certainly alter the way many businesses are run. That is why Web3 is a serious threat to corrupt government policies, especially with freedom of information.
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