Companies that sell body cams to law enforcement are now chasing a promising new market even as critics question the extent of the problem.
By Lauren Debter, Forbes Staff
T o battle what they call a rising wave of organized theft, retailers have hired security guards, locked merchandise behind glass, installed face- and license-plate-recognition software and deployed shopping carts whose wheels lock automatically when they’re pushed beyond a certain range.
The problem has only gotten worse, they say.
Retailers reported $112 billion in losses last year from “shrink,” which aside from stolen merchandise includes items that have been damaged or lost because of vendor fraud or paperwork screwups, up from $94 billion in 2021, according to the National Retail Federation. Organized retail-crime groups who resell the goods online are the main culprits, retailers say, and their nefarious handiwork has taken such a toll that the CEOs of Walmart, Target and Best Buy, among others, have used quarterly earnings calls to decry the problem. Last month, Target closed nine stores, blaming high levels of theft and safety concerns.
However, media investigations, as well as a recent report from analysts at the investment bank William Blair, have questioned the severity of losses from theft and suggested that retailers are using the issue to divert attention from other problems, including inventory mismanagement. Viral videos of smash-and-grab robberies have been politicized, some argue, to criticize legislation that relaxed the penalties for shoplifting in some states and promote the notion that lawlessness has flourished under certain elected officials.
No matter. Stores are powering up against crime. The latest: body cameras.
Dozens of retailers, including 25 of the 100 biggest, began exploring or using the law-enforcement technology in their stores in roughly the last 18 months, the largest body-cam manufacturers told Forbes. Body cams on retail employees are already pervasive in the U.K. at stores like Tesco, the eighteenth-largest retailer in the world.
“This is one of the top three technologies that retailers are exploring,” David Johnston, vice president of asset protection and retail operations at the National Retail Federation, told Forbes. The other two are technologies that leverage artificial intelligence or radio frequency identification, which tracks the whereabouts of an item.
“The minute something pops off in a store, everyone has their iPhone out. Retailers are starting to say we need to have our own side of this.”
Stores could be a vast new client base for body-cam makers. Camera prices typically range from $500 to $700, plus a monthly fee starting at $29 for the software that goes with them, like storing footage on the cloud, transcribing audio and redacting sensitive parts of the video like bystanders’ faces. The global market for wearable cameras is already over $6 billion, according to Straits Research, and because the retail industry is one of the biggest employers in the nation, with some 15 million store employees, body-cam companies stand to generate north of $1 billion in sales if just a tenth of workers adopt them.
Mall of America, the biggest in the U.S., recently outfitted its entire security force with body cams. The mall hopes the technology, which it issued to officers in April, will help it document, and maybe even deter, some of the felonious behavior that comes with its 32 million annual visitors. Mall management has instructed its officers to activate the body cams when they’re responding to an incident, with the camera able to also capture the 30 seconds before it’s turned on.
“It allows us to go back in time, essentially,” Will Bernhjelm, who runs security for the suburban Minneapolis mall, told Forbes. “To get the entire story.”
Two dozen retailers are exploring pilots or have deployed body cams made by Axon, the Scottsdale, Arizona-based company that developed Tasers, said Mike Shore, who runs the company’s enterprise division, which is responsible for selling to retail and healthcare companies. Most will start with ten stores, then expand to more locations from there, he said.
“These places are fairly covered with CCTV, but there are still blind spots,” Shore told Forbes.
Body cams offer a boots-on-the-ground perspective with audio, rather than the silent, distant footage from a camera on a wall or ceiling. The video can be live-streamed into an operations center, where additional security officers can watch or head to the scene. Some body cams allow for two-way audio.
The hope is that they’ll not only help diffuse certain situations, but give stores more evidence to prosecute shoplifters. At one big-box retailer, an asset-protection employee wearing a bodycam confronted a woman who had gone into the changing room and put merchandise in her purse and donned four layers of clothing. She spit on the employee and cursed at them. When she was informed that she was being recorded, she dropped the merchandise and quietly left. She has not returned to the store since.
“The minute something pops off in a store, everyone has their iPhone out. Retailers are starting to say we need to have our own side of this,” said James Stark, who previously led loss prevention for Neiman Marcus and is now in charge of the retail business at Axis Communications, a Swedish company with $1.6 billion in 2022 revenue that sells body cams.
The cameras are getting a makeover for store environments. This month, Axis Communications introduced a smaller, lighter version of its body cam that’s meant to be used in retail stores and doesn’t look quite so aggressive as the ones worn by law enforcement. Axon ($1.2 billion in revenue last year) said it’s working on a similar model. London-based Reveal Media sells a slender version with a small screen so that people can see themselves being recorded.
Many retailers are trying the body cams on their security officers first, then looking at rolling them out to their loss-prevention employees, store managers and employees, in that order, over time, said manufacturers. Hy-Vee, a Des-Moines based grocer, has equipped the security officers that are stationed in its stores with both tasers and body cams from Axon.
Yet, plenty of grocery stores, convenience stores and other retailers don’t have a security presence so they’ve already put them on regular store employees, said Mahesh Saptharishi, chief technology officer of Motorola Solutions. About 75% of his company’s 2022 revenue of $9.1 billion came from “public safety” products, including body cams.
Critics, however, have questioned whether shoplifting is really to blame for retailers’ struggles. The Seattle Times showed that Target was closing outlets in areas with lower reports of theft than other stores in the city that remain open. The blog Popular Information analyzed data from the police department and found a similar situation with Target stores in New York and San Francisco. Target did not respond to requests for comment.Retail analysts led by Dylan Carden and Phillip Blee of Chicago-based investment bank William Blair said in an October 25 report that while theft is on the rise, there is some indication that retailers have exaggerated the problem and used it to mask tightening margins and mistakes in managing inventory following the pandemic.
“We also believe some more recent permanent store closures enacted under the cover of shrink relate to underperformance of these locations,” the researchers wrote. “Ultimately, we believe recent actions to stoke government response, incremental mitigation efforts by companies, and some early signs of stability in shrink metrics all point to a more manageable issue looking into 2024.”
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