The Evolution of “Saving the Sale” and What It Means Today | Part 3 of 3

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So far in this three-part series on how to “Save the Sale”, I have covered:

In this third and final part to this “Save the Sale” series, the discussion will slightly shift toward the challenges retailers experience when attempting to digitize their business model to increase sales by enhancing their customers’ experiences.

Seek First to Understand (the Challenges)

In a recent article entitled, The Digitalized Retail Store – a Conversion Driver or a Giant Headache?, author Tom Vieweger highlights the challenges retailers face when digitizing their operations, as well as the steps retailers must take to successfully accomplish this relevant transition. Vieweger states retailers must first lay a foundation, meaning whatever “digital touch points” a retailer utilizes (i.e., displays, in-store kiosks or smart mirrors), they can only drive conversion if the promoted products are actually available.

 

To accomplish the next step laid out by Vieweger, retailers must “play, measure, learn & adjust,” meaning they need to learn how customers react to offering new services so they can begin innovating with customers, as opposed to for customers. The third and final step Vieweger lays out for retailers looking to successfully digitize is to stay flexible by removing internal barriers while creating new, agile approaches that can be adjusted as technology changes.

The bottom line? Accurate, real-time stock information is essential for any organization launching into this new world of retail. Launching new digital initiatives that inspire customers to purchase more items, only to be disappointed when the item is not in stock, will only serve to damage a retailer’s brand and alienate customers. RFID and EPCIS standards are the keys to success in this arena, as RFID enables a high stock accuracy while EPCIS is a standardized protocol to exchange information on RFID events.

Secure Self/Mobile Checkout: Lessons from US & UK Retailers

At the Retail Industry Leaders Association’s (RILA) Asset Protection Conference that will be held April 29 – May 2, 2018 in Orlando, Fl., retailers and academia team up to present an education session entitled, Teaming Up to Secure Self/Mobile Checkout: Lessons from US & UK Retailers. In light of the fact that self-reporting by retailers, video, and other evidence indicates current mobile checkout and self-checkout business models may be creating significant losses and inventory distortions, Read Hayes of the University of Florida & the Loss Prevention Research Council (LPRC), and Adrian Beck of the Department of Criminology, University of Leicester, teamed up with retailers to produce this engaging, value-packed session that will address the technologies needed to effectively play in the new retail landscape.

Attendees will hear from these respected academics who will share their latest research findings on the nature and extent of the risk posed by self-scan systems, together with retailers who are utilizing this technology in their businesses. If you have not already registered to attend this conference, you may do so by clicking here. This is a session you will not want to miss!

 

The Meeting You Need at the Time You Need it
Nedap will be displaying their latest RFID technology, including RFID-based EAS, at this year’s RILA Conference April 29 – May 2, 2018 in Orlando, Fl This is the perfect opportunity for you to stop by Booth 626 to experience firsthand how RFID provides the technological foundation needed to successfully launch a self-checkout or mobile pay platform while still protecting your merchandise.

If you would prefer to schedule a meeting with us at the RILA Conference, you may do so by clicking here.

The Evolution of “Saving the Sale” and What It Means Today | Part 2 of 3

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I recently started a series on the evolution of the phrase “Save the Sale” and what it means today.  Part One discussed the definition of “saving the sale” and how not saving the sale impacts inventory and shrink.  Part two discusses the importance of having merchandise available and how mobile payment is becoming the standard to keep impatient customers fulfilled in this omnichannel world.

“Saving the Sale” is means merchandise need to be available of course and retailers must make it a seamless checkout experience.  Here’s additional detail on “saving the sale” solutions:

Merchandise Simply Available is Saving the Sale
Nedap offers practical solutions to typical challenges retailers face worldwide. Our mission is to make it simple for retailers to always have the right products available. We help you to make sure your customers feel they are the entire focus of your attention – that they can find whatever they want, wherever and whenever they want it – because your products are in stock and on the right shelf. Nedap’s solutions also help ensure your store teams spend less time looking for missing products and spend more time serving your customers.

Saving the Sale with Seamless Mobile Checkouts
The way consumers shop has changed dramatically over the past decade. The ‘traditional’ way of shopping; entering a physical store, choosing items and then lining up to pay at the checkout has been completely revolutionized. An increasing number of retailers are offering alternatives to the traditional point-of-sale by offering the possibility for their customers to make payment on their personal mobile devices. However, these ‘seamless checkout experiences’ tend to conflict with traditional EAS solutions. Nedap showcases how mobile payments can be combined with RFID-based EAS systems to effectively prevent merchandise from being stolen throughout the mobile pay process.

Seamless and cost-efficient security with RFID tags makes this solution sustainable. Additionally, Nedap’s solutions integrate nicely with existing systems, and the ability to use existing barcodes makes it even easier to adopt.

As digital sales continue to rise, it’s never been more important for retailers to optimize their checkouts in stores.

Use In-Store and Cloud-Based Technology to Save the Sale

RFID-based EAS
The role of electronic article surveillance antennas at the entrances and exits of stores have also changed. Traditional EAS systems alarm on active tags leaving stores, but intelligent article surveillance systems are capable of not only recognizing specific items. They can also detect and trigger alarms for several different scenarios. These systems are more advanced than ever before. Within this modern retail environment, Nedap distinguishes different levels of intelligent article surveillance to meet the needs of each retailer, all with one thing in mind: We make it simple for retailers to always have the right products available.

!D Cloud
Making sure that a product in the right size and the right color is available for your customers is crucial these days. However, merchandise availability should not result in overstocked stores and the associated high capital cost. That is why having accurate stock information at all times is key. RFID technology makes it possible to automate in-store stock management – resulting in optimal merchandise availability for customers and an in-store stock accuracy of over 98%.

To enable a fast RFID deployment and optimum scalability, Nedap has designed !D Cloud. !D Cloud is a cloud-hosted software suite that functions as a scalable integration layer between the existing ERP system and RFID readers. There is no need to replace existing IT infrastructures, add any new in-store infrastructure, or change the current ERP system.

Stay tuned for the conclusion to the series next week.

The Evolution of “Saving the Sale” and What It Means Today | Part 1 of 3

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Reflecting upon recent conversations I’ve had with Loss Prevention (LP) leaders, I have noticed an interesting shift in the way inventory shortage, or shrinkage, is being talked about. Over the many years I have been in the retail loss prevention industry, I have seen the focus of loss prevention leaders volley from one thing to the next. Robberies, employee theft, shoplifting and Organized Retail Crime (ORC) are still some of the most commonly talked about LP issues. However, these discussions are no longer solely focused on how these issues impact shrinkage. Most recently, these discussions focus on how these issues impact sales.  After all, retailers cannot sell off empty shelves.

The phrase “Save the Sale” started to surface in 2009, but it has recently gained ever more momentum.  Loss Prevention executives from retailers of all kinds are being charged with “Saving the Sale” in all areas of their focus.

Over the next few weeks, I’ll be publishing a series on how Saving the Sale affects you and how you can help your organizations “Save the Sale.”  Here’s the first two critical points to saving the sale:

Save the Sale Means Real-Time Access to Inventory
Retailers like Macy’s and The Children’s Place are still hot on ‘omnichannel retail,’ which is the term used to describe how retailers connect online and offline shopping behaviors. In a recent article in Forbes Magazine, Macy’s Executive Chairman, Terry Lundgren, stated that Macy’s is continuing to see serious growth in the area of “buy online, pick up in store” (BOPUS). He believes “physical stores are not going away,” and that, “customers will always want the option of coming into the store to try on jeans instead of buying three different sizes online.”

In this same article, Jane Elfers, CEO of The Children’s Place, stated her organization is also making a “big move towards digital and employing a lot of the omnichannel use cases like BOPUS and ‘Save the Sale.’” The article goes on to acknowledge that ‘Save the Sale’ requires store associates to have the ability to access real-time inventory across the network of stores, and that this inventory access enables store associates to keep customers from walking away from a purchase by finding their desired item online or at another store location with ease.

Failing to Save the Sale Increases Shrink

People rarely consider that sales directly impacts reported shrinkage percentages. The most successful loss prevention executives understand that when sales are up, shrinkage often decreases. Conversely, when sales are soft, the reported shrinkage percentage often increases. This is because shrinkage is typically reported as a percent-to-sales. This is calculated by dividing the total dollar amount of inventory shortage by the total sales. For example, if a retailer that does $3 million/year in sales takes inventory and determines $100,000 of inventory is unaccounted for, they simply divide $100,000 by the $3,000,000 and report a 3.33% shrinkage rate.

This means that if the inventory shortage of $100,000 stays the same, but sales increase to $3.2 million/year, their reported shrinkage rate decreases 20 basis points to 3.13. Conversely, if sales decrease to $2.8 million, their reported shrinkage rate would increase by 24 basis points to 3.57%. This is partly why retail’s classic saying – “Sales cures all ills” – has stood the test of time.

Stay tuned for the next in the series, “Seamlessly Saving the Sale”…

The Consumer Push for Mobile Pay Checkouts

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“What’s a Cashier?”

Checkouts haven’t changed since the beginning of retail. Sure, there are different models of the checkout, such as customer-unload designs, cashier unload designs, and even self-checkouts. But all of these types of checkouts have one thing in common: Cashiers.

With the Mobile revolution and the continued development of RFID technology, checkouts as we know them will soon be a thing of the past. This is not just a sci-fi vision into some impossible future. This is our new reality. Some say that within the next 10-20 years, children will be asking, “What’s a cashier?”

Winners Always Want the Ball

Some retailers will wait on the sidelines as their more in-tune-with-reality competitors pass them by in this new world. Unfortunately for them, they may never recover. In his recent blog, The Missing Piece in the Mobile Payment Puzzle and How RFID Completes It, RFID expert Hilbert Dijkstra lays out not only the benefits of mPOS, but also how retailers can protect their merchandise in this new, fresh and exciting retail environment.

The new world of mPOS still has unclaimed land, meaning there are still creative ways to deploy it. This is demonstrated in our whitepaper, How to Prevent High Shrinkage Levels When Introducing Mobile Checkouts in Retail Store. As stated in the whitepaper, Apple stores employ a unique version of mPOS. Any Apple employee walking the sales floor carries an iPad that allows them to ring up customers where they stand, thereby eliminating lines that traditional checkouts still contend with. This system of ringing sales may work well for Apple, but other retailers are experimenting with an even more unique way to use mPOS: one that involves RFID.

Leveraging Labor

There are many forward-thinking retailers today who understand the importance of being on the leading edge. Those first to adapt to the consumers’ push for mPOS will reap the rewards that come with building strong brand loyalty. But other benefits, such as labor reallocation or reduction, can be realized with mPOS.

mPOS retail mobile checkout

Imagine a customer walking into an apparel store. She sees a handbag she wants and simply scans the item using her smartphone, then exits the store. Far-fetched? Not at all. Some retailers are already doing this, while others are still wondering when the right time is to start their RFID journey. But one thing is for sure. Customers will flock to those utilizing this RFID technology.

Omnichannel Bliss

The use of RFID with mPOS is not the only benefit to retailers. Those in the omnichannel space also need RFID to solve their customer service woes. To successfully implement omnichannel strategies like click&collect or ship from store an accurate stock is a must have. When items that are ordered for instore pick up or to be send from the store are not  the apologies that ensue does little to help the brand damage that takes place each time this type of incident occurs. To read more on why RFID is the true omni channel enabler, please read more here.

With the introduction of mPOS to the market, omnichannel has come full circle. Now, when customers arrive to pick up the items they already paid for online, they can simply arrive at the store, select their purchased item, scan it out and leave. No lines. No hassle. No employees needed.

This is an interesting time in the world of retail, and consumers are in the stands patiently waiting to cheer for and support the retail winners who want the ball. Who will that be?

About Nedap

Nedap’s retail loss prevention products include electronic article surveillance, RF EAS systems, RFID EAS systems, Customer Counting and Retail Store Access Control systems.  Nedap’s retail solutions are based on intelligent identification and registration of people, animals and objects, or on innovative, ‘green’ electronic controls and power supplies. Innovation is driven by clients’ operations: systems are developed and adapted to optimize clients’ production and information processes.

Nedap brings 40 years of global experience, market expertise and close cooperation with leading retailers. Everything Nedap Retail does is driven by their mission to make it simple for retailers to always have the right products available. To achieve this, Nedap Retail offers industry-leading solutions for their customers’ diverse needs in loss prevention and stock management. For more information, visit Nedap Retail’s website: www.nedapretail-americas.com.

Top 3 Reasons to Avoid RFID, and Why You Still Need It.

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RFID can be a scary acronym for retailers and supply chain operations. For years, it has carried these top three stigmas:

  • The Range of an RFID signal is too short
  • Liquids and metals interfere with RFID signals
  • RFID technology is costly

Taking a look at each of these objections individually will help readers reach an understanding of why RFID solutions has become a must-have in the retail industry, as well as other industries in which inventory accuracy maximization and inventory loss minimization are essential. Consider the stigma that the range of RFID signals is too short. This may be true in some industries, but it certainly is not true when it comes to inventory management and tracking within retail and supply chain operations. Using RFID to manage and track inventory is crucial when one considers any attempt to make a mark in the omnichannel space. In fact, Bill Connell, senior vice president of logistics and operations for Macy’s, stated during a panel discussion at the RFID in Retail and Apparel 2016, that “omnichannel was critical to success in the current retail market. Connell went on to state, “RFID is essential to omnichannel execution. Therefore, RFID is essential to retailing.” Regardless of RFID range, it is clear the current technology suits retail and supply chain industries well.

RFID labels for food Nedap

The second stigma that may be causing some companies from diving in to RFID technology has to do with liquids and metals. Albeit true that these two things can cause interference, we have found once again that solutions are in place to minimize interference by liquids and metals, rendering this a non-critical concern. Placement of RFID readers, such as Nedap’s !D Top, which is an overhead reader that replaces traditional pedestals, helps to overcome interference, making it the industry’s leading choice for RFID/EAS solutions. And not only is this technology well-suited in general merchandise and apparel retail segments, but it is also viable in the food sector.

And finally, the oldest and most popular falsehood about RFID: cost. For decades, RFID technology has carried this stigma, and until recently, it may have been true. But like all technology, the cost of RFID has drastically declined. Retailers may also be surprised to learn that Nedap’s RFID/EAS solutions are futureproof, meaning they can be used strictly as EAS systems today, and as RFID systems in the future without having to replace any hardware. This helps to further leverage the cost of RFID technology.

Retail store entrance RFID technology Nedap

Now that the top three obstacles to RFID technology have been addressed, it is time to discuss the benefits. The retail and supply chain landscape has changed significantly over the last couple of years, and changes are still coming. The number of people who order items online and pick them up at store locations continues to increase. What happens when customers order online, only to find the item is not at the store location at the time of their scheduled pick-up? The answer to that is easy: brand damage. Building trust within the customer base takes time, but it takes even longer to earn trust back once it has been lost. This is at the heart of experts’ claims that RFID technology is paramount for successfully competing in the omnichannel space. Knowing merchandise levels in real time is essential in order to deliver customer satisfaction throughout the shopping experience. And when one considers that a store employee, when using RFID, can take a full and accurate store inventory within minutes, it becomes clear why RFID technology is a must-have.

About Nedap Retail

Nedap brings 40 years of global experience, market expertise and close cooperation with leading retailers. Everything we do is driven by our mission to make it simple for retailers to always have the right products available. To achieve this, we offer industry-leading solutions for our customers’ diverse needs in loss prevention and stock management. For more information, visit www.nedap-retail.com.

Citations:

http://www.rfidjournalevents.com/retail/quote_connell

6 Most Common CFO Objections

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Seasoned Loss Prevention executives know that when attempting to acquire funding for a new LP initiative or solution, they must be prepared to answer some tough questions and possible objections from their CFO, as well as other senior executives.  A common best practice to prepare for these objections is to consult others within the company who have had experience going through this same capital request or budgetary process.  Often times coworkers can share the objections or tough questions that were previously asked of them.  LP professionals can use that knowledge and anticipate other similar scenarios, then practice viable responses.

What if an LP professional does not have someone to consult? 

Here is an opportunity to review some common questions and objections LP executives may encounter when asking for budget allocations or capital for a new or upgraded LP initiative. For illustration purposes, we’ll use the installation of Nedap’s EAS system with RFID capability as the LP initiative being proposed.

 CFO Question: What are the operating costs?

 LP Executive Answer: “Rather than continuing down the path of standard EAS, Nedap’s system is much more intelligent.  It will allow us to use the EAS system as more than just a deterrent to theft, as it provides Retail Analytics.  However, any slight increase in costs when compared to our current LP solution will be more than covered by the increase in sales we will realize due to having product on the shelf as a result of the reduction of theft, as well as the added benefits of RFID technology.  Therefore, this LP solution is well-suited to ensure we reach our break-even point within the first 10 months of the fiscal year.”

CFO Objection: We have other priorities right now. Maybe next year!

 LP Executive Answer: “We understand that one of the biggest challenges of any senior executive is how to justify spending capital on an LP solution, especially when shrink has improved over prior years.  However, it is important to note this LP solution doesn’t only reduce shrink.  It also reduces labor, provides crucial insight into what is being stolen so we can ensure proper replenishment immediately, and provides a wealth of other analytics that can be used by operations, marketing, and Loss Prevention.  Since all of these areas are priorities for us, it is imperative to integrate this LP solution.  By reducing theft, we will decrease turnover, increase average transaction size, and increase same store sales over last year.  With this improved in-stock position, customer satisfaction will undoubtedly improve.”

 Ever heard these common objections?

  • I don’t want to burden the store employees. The have enough to do!
  • This LP solution will NOT improve sales.
  • That sounds like a huge operation! We don’t have the capacity for that right now!
  • This LP solution requires additional hardware and capital expenditures.

For the answers to the above objections and more ways to win over your CFO, click here to download, “Winning Over the CFO – A Practical Guide for Loss Prevention Executives” by Nedap Retail.

Why Not All EAS Systems Are Created Equal

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As with a lot of other things, when it comes to surveillance equipment, not all systems are created equal.

In an age of the Cloud, the Internet of Things and Big Data, companies must take steps to systemize their operations in a measurable way. And that requires turning away from outdated technology and embracing new advancements.

Compared to other technologies, such as the aforementioned cloud computing, loss prevention technologies have made remarkably little progress in the past decades. Analog and electronic-based tools are still prevalent in most retailers across the country.

These archaic surveillance methods leave much to be desired. Their inherent lack of intelligence, analytics and integration makes it easy for theft to occur — from casual shoplifters to organized retail thieves.

Each of these aspects plays an important role in the imbalance of equality.

Electronic-Based Systems Lack Intelligence

Electronic-based EAS systems are ineffective because they rely on your employees’ motivation to test and monitor them to prevent theft. According to a study by Hayes and Blackwood, only 60% of EAS pedestals were able to read products with a soft tag inside — and even more shockingly — in 91% of stores visited, there was no form of acknowledgment by any person in the store when an alarm was activated!

When an alarm sounds, theft prevention depends entirely on whether someone chases down the customer and asks them to open their bags. If this doesn’t happen, people learn they can steal things from the store without repercussions.

Meanwhile, no data gets communicated or stored into your ERP. This leaves you lacking insight into potential weak areas. What if you knew that more thefts occur during peak hours in the middle of the week? You could increase your staff accordingly. Or which item was stolen, so you could replace the floor model in order not to lose more sales.

But you don’t.

Relying on an electronic-based system creates gaps where items get lost or stolen, and no one knows about the losses until the next inventory audit. It’s simply not an efficient way to run your business in today’s society.

You Cannot Measure, Analyze or Report On Anything With Electronic-Based Systems

Measuring, analyzing and reporting are critical factors to the success in today’s extremely competitive retail world. But electronic-based surveillance systems do not provide these capabilities.

You can’t get any insights into the performance and health of your security systems. You can’t see how your customer dwell times and peak shopping times play a part in your security strength.

Instead, you’re left guessing and hoping that your protocols and technology work.

And this inequality is another area that makes software-based solutions stand out. Modern surveillance systems are equipped with retail analytics that allow you to:

  • Monitor store locations remotely.
  • Access vital information 24/7 from the web or mobile device.
  • See real-time analytics, reporting and dashboards on loss prevention performance.
  • Benchmark and compare all stores within your organization.

This level of monitoring allows you to start focusing on what really matters.

Electronic-Based Systems Do Not Integrate With Other Systems

In the era of big data, it’s important that all your solutions communicate with one another. This helps to keep everything aligned, systemized and unified.

With software-based solutions, you get access to a complete suite of integration technology. Processes such as enterprise resource management, warehousing, point of sale systems, staff planning and customer relationship management can all work alongside your loss prevention solution. This opens the door of opportunity for a wealth of knowledge and insight.

On the other hand, electronic-based solutions cannot communicate and integrate with other technologies at all which keeps it isolated from other valuable information.

Having solutions interconnected helps them reinforce each other and gives you valuable insight. It’s a win-win situation that you just can’t achieve with electronic-based systems.

Are You Ready for Software-Based Solutions?

More and more retailers will turn to software-based systems in the coming years. It’s the only logical pathway along this journey of technological advancement.

If your company isn’t thinking about the future, it will get stuck in the past. And that will not only lead to an increase in shrinkage but will do immense damage to the entire infrastructure.

It’s time. Start making plans to pitch a loss prevention upgrade to the C-Suite at your company. They’re the biggest thing standing in the way of your vision.

5 Common Pitfalls That Could Thaw Your Loss Prevention Efforts

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Any loss prevention or store operations manager knows that loss prevention is the result, not the effort.

Ultimately, the only thing that counts at the end of the day is how much shrinkage you can prevent by employing the latest technology, devising the best training and hiring the most diligent employees.

However, even in the best scenarios there are factors that hinder your loss prevention efforts and encourage shrinkage. Below are the most common ones:

Lack Of A Comprehensive Loss Prevention Strategy

The first and probably the most important reason loss prevention efforts fail is a lack of a comprehensive loss prevention strategy that ties into the overarching business goals of the organization.

A study by Robert S. Kaplan and David P. Norton for the Harvard Business School entitled “The Strategy-Focused Organization” found that “a mere 7% of employees today fully understand their company’s business strategies and what’s expected of them in order to help achieve company goals.”

The overall goal of most retailers is to profitably sell products that were manufactured by a third party to maximize shareholder value — whereas the task of loss prevention managers is to help the organization sell more by losing less.

If a loss prevention strategy only focuses on preventing shoplifting, you are ignoring the other pieces of the puzzle such as securing the employee and back entrances, scanning incoming inventory to prevent vendor fraud, tracking each item individually to minimize administrative errors and making the store more secure for employees as well as visitors.

Shrinkage prevention is an organization-wide problem and has to be tackled on a corporate level. Every single employee must be informed, aware and educated on the causes and consequences of shrinkage — this will not only lower employee theft but also make the entire team more alert.

Loss Prevention In A Vaccum

Hand in hand with incorporating loss prevention into the overarching business strategy is the integration of loss prevention systems into existing business applications.

Traditional RF- or AM-based electronic article surveillance (EAS) systems are not integrated with other systems because they are electronic-based and not software-driven. This lack of integration not only isolates the company’s loss prevention efforts from other processes within the organization, but it inhibits the retailer to build a network of reinforcing systems that work together.

With mega-trends such as omni-channel, globalization, big data and the Internet of Things shaping the retail landscape, IT and other business departments need to work closer and align better with loss prevention.

However, the recently released study The Great Disconnect Between LP and IT finds that there are huge discrepancies between IT and loss prevention – however executives’ priorities do not align with these realities. For example, on average, the revenue lost per case of employee theft is up to six times larger than what shoplifters help themselves to (according to the 2015 Retail Theft Survey), but tackling internal theft is deprioritised compared to other priorities.

Loss_Prevention_is_the_1

At the moment, only 8.3% of the IT budget (not including Payment Card Industry (PCI) Data Security Standards and data breach protection efforts) is dedicated to loss prevention efforts. One reason for this low number is simply that other business priorities are taking precedence. The other reason that loss prevention receives so little attention from IT is because electronic systems are not IT-enabled and cannot be integrated into other business applications. In fact, IT personnel, as well as LP professionals name system integration as one of the biggest hurdles in building a closer relationship.

With an increasing number of solutions including open API’s, internet connectivity and the ability to integrate with business applications, this will change over the next couple of years.

Demotivated Employees

The third reason why loss prevention fails is demotivated employees. Retail thrives and fails with the quality and retention of its employees that it hires.

Theft from employees and their lack of motivation to follow up on alarm situations is very high. This is especially true in the United States, where the average retail employee earns on average $7.65 – $14.10 according to PayScale — compared to for example $17.42 in Germany. In addition, American stores have a high employee turnover rate of 67 percent. Both of these factors result in decreased motivation and loyalty towards the employer which is reflected in high shrinkage.

If a customer walks into your shop and they get approached almost immediately and helped, there is less opportunity to browse the merchandise, inspect security tags and slip items into aluminum foil-lined bags. In contrast, if your personnel is busy exchanging the latest gossip, filing nails or playing games on their phone, there is more opportunity for theft.

Lastly, if your front line workers don’t pursue a visitor that set off an alarm because they could not bother or are too embarrassed, your loss prevention efforts are futile.

JB_20101104_Beaute_0120

No Clear Reasons For Alarms

The number of alarms your system sounds during the day can be a good indicator if something is amiss. For example, if you usually have 20-30 alarms during the day and this increases suddenly to 80-100 alarms daily, you know something is not right. But sometimes it is hard to determine the reason for the alarms.

If your system can decipher the alarm direction, you already have an indication for the cause of the problem.

Maybe a piece of merchandise fell behind a display case and into the field of the security pedestal, it would cause a non-directional alarm. However, you could see an increased number of incoming alarms if your neighboring store does not deactivate their tags properly, and customers continue their shopping in your store.

Not knowing the causes of the alarms prevents you from fixing the underlying problem and will result in too many alarms — which in turn will scare away shoppers.

No Status Updates On The Health Of Your Systems

For most retail employees, the day starts by testing the loss prevention systems. They have to go with a tagged merchandise item past a pedestal to manually test if it sounds an alarm.

However, if the system does not perform at peak performance, stops working during the day or the staff does not perform a daily check, the store will be unprotected for longer periods of times.

Often, the reason for the malfunction is simple and could be fixed if the system would be able to sound an alert — for example moving a display that has been blocking the EAS system.

Also, by having an Internet connection, you can allow remote device monitoring and maintenance as well as constant firmware updates to keep your solution improving over time.

Which factors do you see as the most hindering?

Which common pitfalls do you encounter every day that hinder you to do your job effectively? We would love to hear them – please use the comments below to continue the discussion.

Most US Loss Prevention Systems Only Deal With The Tip Of The Iceberg

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A few months ago, a man strolled into a retailer in a small New Jersey town. He looked relaxed wearing a navy sweater; his sunglasses propped up on his head. No one suspected he was about to steal three purses. A few hours later, a woman enters the same store, heads for the cash register to return the very same previously stolen handbags and asks for cash back. She knows she will get the money — they already scammed other local stores before.

(Photos provided by Mount Laurel Police)

(Photos: Used with permission of the Mount Laurel Police)

While it’s only a matter of time until they get caught by the police, the damage to this specific retailer is far bigger than the value of the purses alone. According to the Global Retail Theft Barometer report, every year 1.29% of U.S. retail revenue is lost to shrinkage. However, the outdated loss prevention systems in place just deal with a fraction of the problem. There is so much more to win.

Most US Loss Prevention Systems Do Not Tackle The Real Problem

Most retail stores in the United States are equipped with radio frequency (RF) or Acusto Magnetic (AM) based electronic article surveillance (EAS) solutions. Since these systems are electronic-based and not software-driven, they merely sound an alarm if a tag shows up in their electromagnetic field. Otherwise, the EAS system knows nothing.

Employees have become accustomed to the alarm going off — many times for the wrong reasons. For example, an incoming customer brought a reactivated label from a different store into your shop or merchandise with an active tag that fell within the electromagnetic field. Since it is embarrassing to confront a customer as a putative shoplifter, many employees shy away from pursuing the client and the loss prevention system is useless. Many front-line workers even see a loss prevention system more as an obstruction than a helpful tool which can assist them.

However, the much bigger problem is that the retailer does not know which item was stolen resulting in:

  • An inability to sell supposingly in stock items (stolen display models),
  • A larger inventory in stock to make up for stock inaccuracy,
  • Customer frustration when items are out of stock,
  • Inconsistent shopping experiences between online and in-store.

Software-Driven and RFID-Based EAS Systems Inject Intelligence Into Loss Prevention

A software-based EAS solution can alleviate this somewhat as it distinguishes between incoming, outgoing and non-directional alerts and has additional layers of intelligence. However, it will not be able to tell which exact item was stolen — only an RFID loss prevention solution can do that.

Additionally, you can glean analytical insights from your retail analytics and dashboarding solutions. This data can be used to learn more about the causes for the alarms sounded and better eliminate false alarm situations. You can also be on top of your system’s health and status to constantly improve performance and avoid service calls.