Loss Prevention Research Council Weekly Series - Episode 165 - $20 Million ORC Case, Holiday Predictions, and Amazon vs Tik Tok
With Dr. Read Hayes, Tony D'Onofrio, and Tom Meehan
LPRC Lab’s have new visitors, this week our hosts discuss the engagement with new and senior members! Also this week, our team looks at the use of TikTok in retail sales, the LPRC’s spotlight on the Today Show, and the great momentum from IMPACT. The hosts also go into a recap of the latest AP/LP news and industry conference takeaways.
Miami – Dade police announce arrests involving organized retail theft rings
https://www.local10.com/news/local/2023/10/23/miami-dade-police-to-announce-arrests-involving-organized-retail-theft-ring/
Let me start this week with a summary from an article from Local 10 News in Miami. According to their reporting, The Miami-Dade Police Department held a news conference Monday afternoon to announce arrests made in connection to an organized retail theft ring that detectives say caused over $20 million in losses to the retail industry this year.
Police said the nine-month Rico investigation involved the police department’s Organized Retail Crimes Squad and various other law enforcement partners.
“According to investigators, they have identified over 87 serial boosters which led to a first and second tier,” a news release from MDPD stated. “As of January 2023, to the present, the first-tier subject has been paid about 1.2 million dollars. During the same time frame, the second-tier subject has produced approximately 5 million dollars by selling the stolen items on an online retailer.”
According to police, the criminal organization was operating in different capacities throughout several counties within South Florida, including Miami-Dade, Broward and Palm Beach counties.
“It is well organized. It is profitable. It is criminal,” said Florida Attorney General Ashley Moody. “This is the modern day mafia.”
Suspects in one group would just steal the items. They were the professional shoplifters, taking everything from security systems to eyedrops.
Group two crooks would re-barcode and catalogue the goods, and those in group three would prepare the goods for resale, selling everything online and making it all look legitimate.
Police said some of the retail victims allegedly targeted by the group were Walgreens, CVS, Walmart, Publix, Winn Dixie, Fresco Y Mas, Navarro, Home Depot, Lowes, Dick’s Sporting Goods, Target, Sam Ash, Best Buy, Harbor Freight, The Fiddle Shop, Guitar Center, Golf Galaxy, Macy’s, BJ’s, Costco, various pool supply stores and some small music businesses.
Holiday Spend to reach $1.6 trillion: ICSC
https://www.retaildive.com/news/holiday-spend-increase-icsc/697417/
Let me switch next to another prediction for the upcoming retail holiday season from the International Council of Shopping Centers or ICSC. As reported by Retail Dive:
- Despite inflation woes, eight in 10 shoppers expect their holiday spending budgetsto either remain the same or increase from last year, according to a new survey of 1,007 consumers from the ICSC. That proportion is slightly higher than the 73% of consumers who said the same last year.
- The ICSC predicts that 87% of consumers will shop at brick-and-mortar stores this holiday season, and three-fourths of shoppers plan to buy their holiday goods online. The organization forecasts a 3.8% increase in retail sales during October through December.
- Seventeen percent of consumers anticipate buying online and picking up in-store. Among consumers who are shopping in stores and online, respondents said they plan to spend 41% of their holiday budget in physical stores and 42% online, the survey found.
Amazon Confronts a new Rival: Tik Tok
https://www.wsj.com/tech/amazon-tiktok-online-shopping-rivals-5bf902c2
Let me end this week with one of the my favorite stories of the week which is from the Wall Street Journal. The article was titled “Amazon confronts a new rival: Tik Tok.”
TikTok made a name for itself in the U.S. as a viral video-sharing sensation. Now it’s trying to get its 150 million U.S. users to think of it as a shopping destination.
Amazon, meanwhile, is trying new tactics to maintain its dominance in e-commerce. It has added social elements to its app to entice younger shoppers, and it is building up a network of influencers who hawk items on and off its website.
As a result, the two companies are on a collision course as they vie for position in a huge market. Researchers at Insider Intelligence estimate social e-commerce will grow into a $100 billion market by 2025, from $67 billion this year.
To succeed, each company will need to copy elements of the other’s success. TikTok, owned by Beijing-based ByteDance, wants customers to trust it as a safe and reliable place to buy products, the way many already trust Amazon. And Amazon is trying to persuade users to hang out on its app like they do on social-media services.
TikTok launched its shopping feature, called TikTok Shop, last month and is currently selling about $7 million worth of products like hairbrushes, teeth-whitening tools and fall-themed sweatshirts with leaves and pumpkins every day in the U.S., with a goal of reaching $10 million a day by the end of the year, according to people familiar with the matter. Amazon’s global online store sales—a measure of the products Amazon sells directly—was roughly $603 million a day last year.
TikTok is spending heavily to build a logistics operation, poaching Amazon employees and trying to lure third-party sellers by offering them a bigger cut of sales than Amazon, according to sellers. More than 60% of Amazon’s retail sales come from third-party sellers.
