CVS & Walmart test letting people use their phones to open locked cases
With more essential items locked behind security glass, retailers are trying out new technology that aims to make the shopping experience easier while still cracking down on retail theft.
CVS’ vp of merchandising Zachary Dennett shared a video to LinkedIn in September showing that customers at one store could now unlock a locked shelf of vitamins with the CVS app. Retail Brew later showed the technology at a location in New York City. A CVS spokesperson confirmed to Modern Retail the company is piloting the technology in a handle of New York City stores for members of its ExtraCare loyalty program.
Walmart is similarly testing technology that would let employees and potentially Walmart+ members do the same, Bloomberg reported, citing someone familiar with the test. Walmart did not immediately respond to a request for comment. Additionally, CNN reported in January that a company called Indyme was working with 26 undisclosed retailers on similar technology.
More than a quarter of 5,000 shoppers surveyed by research firm Numerator said a retailer loses their purchase when items are locked up, according to a report published Nov. 4. Retail analysts and consultants see the technology as a way to win back those lost sales. It could be an improvement over requiring employee assistance to unlock cases, freeing up employees and allowing customers to shop independently again.
“You want to create a welcoming, approachable, seamless, efficient shopping experience, and physically locking up product wasn’t doing that,” said Melissa Minkow, director of retail strategy for CI&T. “But having this kind of digital touchpoint that consumers are more in control of definitely does.”
Over the last few years, retailers like Walmart, Target, Foot Locker and Nordstrom have reported increased cases of theft and retail shrink. According to NRF’s 2023 National Retail Security Survey, it found that the average shrink rate in 2022 increased to 1.6%, up from 1.4% in 2021. This percentage of shrink represented $112.1 billion in losses but was reportedly in line with figures from 2019 and 2020. The organization decided not to publish the report this year, reevaluating it for accuracy and to be more useful for the industry.
As a result, many major players began locking up their items. Meanwhile, about two years ago, retail workers left their jobs at record rates. Retailers didn’t want to lock their products up but felt a need to do so as new employees were less familiar with how to stop problematic customers, said David Marcotte, svp of cross-industry/cross-border and technology for Kantar Consulting. “They had to find a solution that was relatively independent of labor.”
Over the years, this has led to debate as to whether or not this practice was effective and if there were other safeguards that could be put in place. A Walgreens executive in 2023 suggested retailers may have overreacted. “Maybe we cried too much last year,” then-Walgreens CFO James Kehoe said in an earnings call at the time.
Locking up items impedes the shopping experience in several ways and may decrease sales. It can take way too long for employees to arrive to unlock them, essentially causing cart abandonment and discouraging customers from looking at certain projects. There’s also less privacy and it would dissuade people from shopping in those aisles. Per a 2024 Consumer World survey, less than 32% of shoppers get a store employee to unlock protected items they want to buy.
“It’s not nice to feel like a retailer doesn’t trust you, and that’s kind of the message that the lock-ups send automatically, in a very kind of harsh way,” Minkow said.
Letting customers unlock cases themselves could be a promising middle ground. Analysts say they are better than needing employee assistance, but still not ideal. Minkow said beyond boosting sales of locked items, the feature may also convince customers to finally download retailers’ apps who wouldn’t otherwise and that it’s also possible retailers could collect data on which products customers are unlocking. Both those effects could be attractive to retailers building out their digital ecosystems.
“It’s a great way to end up capturing some in-store data that retailers were unable to capture before,” Minkow said.
Gartner analyst Brad Jashinsky said it makes sense this is just a test at this point, as the cost of buying and maintaining the technology could be expensive to retailers. They’ll need to decide whether it’s worth it and find out if it is effective in preventing theft, he said. “The challenge of balancing consumer convenience and also stopping shoplifting and retail loss — that’s a constant balance for these retailers.”
But the cellphone-based system isn’t without flaws. Less tech-savvy customers may not want to use the app, Minkow said. Thieves could use a burner phone and log into Walmart’s app with fake identification, Marcotte suggested.
“Every single loss prevention [technique] has a way to be defeated; it’s just a question about how much trouble it is,” Marcotte said.