Representatives of retailers and consumer packaged goods (CPG) manufacturers spent Tuesday, May 10, hearing updates from last year’s directives for addressing source tagging initiatives designed to combat shoplifting and organized retail crime (ORC) targeting retailers’ common hot products. The 2016 National Source Tagging Symposium sponsored by Checkpoint was hosted by CVS Health at their corporate headquarters in Cumberland, Rhode Island.
After introductory remarks by Mike Silveira, vice president of loss prevention for CVS, the day started with Colin Peacock, representing Europe’s ECR on-shelf availability (OSA) group, reviewing the results of a 2015 study on the current and future use of electronic article surveillance (EAS). The study was published in an article titled “Where Next for EAS?” in LP Magazine.
The global perspective on source tagging was also addressed by Dan Reynolds, Checkpoint’s vice president of North America sales and customer service, who told the attendees that RFID source tagging grew 9 percent in 2015 thanks in part to strong support from CPGs working with European retailers tagging fresh meats and French-produced champagne. An update of Tesco’s 2015 source tagging results illustrated that company’s significant improvement in shrink reduction.
Four retailers who have been strong supporters of the Source Tagging Symposium reviewed their company’s efforts and successes as they transition from covert to overt tagging solutions.Erin Knight, director of product protection at CVS Health, provided a case study of using Checkpoint’s Visible Clear Black Lock EAS Label on one of their high-risk beauty and health products that resulted in a significant decrease in shrink.
Bob Oberosler, group vice president of loss prevention at Rite Aid, said his company’s number one goal is to improve on-shelf availability by using the lowest level of product protection that allows customers freedom to self-select products. He acknowledged that “overt tagging has saved EAS in low risk stores” by providing a deterrent that covert tagging does not.
Family Dollar stores completed a chain-wide implementation of EAS in 2015. Mark Mellor, divisional vice president of loss prevention for Dollar Tree/Family Dollar, told the attendees that given they often only have one employee in the store, the EAS system gives them a second “attentive employee” in their stores to help deter theft.
Bill Inzeo, corporate director of asset protection solutions for Walgreens, presented a case study of their distribution center tagging program where they worked with manufacturers of select products to have a “safe spot” on the packaging where they could apply an overt tag even when the product contained a covert tag hidden inside the package. The overt tagged products resulted in a notable improvement in shrink and sales due to better product availability.
“Combatting ORC” was the topic of a comprehensive presentation of the different levels of fencing of stolen products given by Tony Sheppard, national manager of CVS Health’s ORC investigation unit. He told the attendees that the industry’s biggest opportunity for combating ORC is targeting the wholesaler/diverter who typically sell legitimate products, such as close-out goods and over-buys from larger retailers, to small chains and independent retailers. However, these diverters sometimes inadvertently purchase stolen product that has been cleaned and repackaged by level-two fences.
The issue of cleaning and repackaging stolen product was one of the action items from the 2015 symposium. As Rite Aid’s Oberosler said, “Two things that ORC groups hate is they don’t want to get caught with product identified to a retailer, and they don’t want damaged packaging that they can’t resell.”
Paul Nowak, general manager of Quad Packaging, who listened to retailers discuss the issue of ORC groups removing tags without damaging the packaging at the 2015 meeting, presented his company’s research into ways to ensure that packaging is damaged when tags are removed. Using a micro-perforation where tags are placed, attempts to remove the tags results in the top layer of the paper tearing. Retailers in the audience were very excited by the simple solution; one calling it a “game changer.”
Shawn Evans, shave on-shelf availability leader for North America for Procter & Gamble, reported on his company’s collaboration efforts with retailers following last year’s symposium. P&G hosted a summit with retailers in August 2015 to discuss how the large consumer products manufacturer could take the lead in developing solutions for high-theft products. He provided numerous specific steps taken, including announcing a Gillette global OSA lab that will be based in Boston to continue collaborative research with retailers around the world. A second retailer summit was hosted by P&G in their Boston office the day following the symposium.
The day closed with additional presentations by Checkpoint executives on new tagging and product protection solutions in the works. The last hour of the day was spent in open discussion between the retailers and manufacturers. For more information about the National Source Tagging Symposium, contact Keith McUmber, director of source tagging for Checkpoint at keith (dot) mcumber (at) checkpt (dot) com.
Image Caption, top right: Colin Peacock opening the Source Tagging Symposium, asking for expectations from the attendees.