Loss Prevention Technology Enhances Customer Service, Operational Efficiencies

Leading retailer of automotive and cycling products and leading operator in car servicing and repairs

Loss prevention technology solutions

With a high number of stores and garages spread across the United Kingdom and Ireland, implementing loss prevention technology solutions achieved one retailer’s customer experience and operational efficiency goals:

  • Inspiring their customers through a differentiated, super-specialist shopper experience, including a modern and exciting store environment where customers can experience and test the products firsthand.
  • Developing modern technologies and infrastructure to realize operational efficiencies, while at the same time managing a wide range of risks in-store, online, and within its different business units.

With an estate of several hundred stores, tagging systems had been installed over the last 20 years from several different manufacturers, using a combination of AM and RF technologies, with RF pedestals being dominant throughout the estate. As none of the tagging pedestals were remotely monitored, the company relied upon store colleagues testing the systems each week and reporting faults.

Significant costs were incurred through the manual application of labels at store level, fixing outdated pedestals, and stock losses. Only the highest-theft risk products were protected, around 17 percent of the entire range.

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The company said, “We completed a survey of all stores to review the performance of our tagging pedestals and discovered that only 20 percent of stores had systems that operated at optimum levels, with the biggest issue being older pedestals that had developed a ‘gap’ over time in the center where a tag could pass through without activating the gates. We also found that 10 percent of stores had pedestals that did not work at all, but store colleagues were unaware.

“With this insight it was decided we needed networked tagging pedestals, that could be remotely monitored so we would know instantly when they were not operating correctly.

“From completing our review, it was evident that if we wanted our tagging pedestals to activate every time a tagged product passed through—or as close to 100 percent as we could get—then AM technology labels best suited our difficult to tag product range, with the Sensormatic APX labels being our preferred choice.”

Going on the Offensive Against Stock Losses

Over the previous years, losses connected to these challenges added up to ca. £1million a year, which put pressure on the profit protection team to prevent shrink and help drive the profitability of the business.

According to the company, “After reviewing our stock-loss numbers for all of our products, a list of over 1,000 products were selected to be tagged at source, which is significantly more than can be tagged in store by store colleagues. With such a diverse range of products that the company sells, there were several products that we wanted to protect but would struggle to activate most tagging pedestals due to challenges with either the product itself or the packaging. Many of our products contain fluids, have high metallic content or both, all of which are known to impair the performance of label tags.”

The Loss Prevention Technology Solution

The company said, “To establish which loss prevention technology would give us the best activation rates, we tested several easy products (no metal or fluid), together with some of our more challenging items. We tagged each product with a variety of different manufacturers AM and RF label tags and tested them using their recommended tagging pedestals.

“As an average across all the products tested, the activation results ranged from 43 to 72 percent of the time with RF systems, but 90 to 98 percent of the time with AM systems. The biggest driver in the range of results was our difficulty to tag products. Most RF labels tested did not work at all on these products, and even the very best labels did not achieve high activation rates. AM labels overcame these issues performing significantly better. The system label-tag combination with the highest activation rates tested was the Sensormatic Synergy system using APX AM labels.”

Recognizing the strategic importance of advanced loss prevention technology for its business, the company decided to invest in a best-of class loss prevention program and focused on three project pillars.

In the first phase of the project, the company and Sensormatic Solutions partnered to concentrate on immediate improvement opportunities, namely:

• Harmonize its estate, as a first step in re-specification of all new store openings with AM EAS systems and increasing benefits of higher detection rates, especially on metal–containing parts.

• Invest in the Source Tagging as a Service (STaaS) program on their top 400 product lines to help increase merchandise protection without compromising open merchandising and customer experience.

• Connect all new 25 stores to the Sensormatic Shrink Management as a Service (SMaaS) platform to gather insights into the general usability of its EAS systems, as well as shrink patterns and advanced loss prevention analytics in these estates.

The Results from Adding the Loss Prevention Technology Solution

During the initial 25-store roll-out, the company’s profit protection team proved that an integrated loss prevention technology system enabled them to substantially lower operating costs, while increasing the level of product protection across the tested estates. By connecting their test stores to SMaaS, they gathered invaluable insights into how the EAS systems were being used, as well as initial shrink trends, causes and patterns.

The company added, “We now have multiple stores with Sensormatic Synergy pedestals installed and networked, and all using the SMaaS platform. In the three months since these have been installed, shrinkage rates in these stores have been 36 percent lower than in the rest of our estate, and we have known every time an issue has affected our tagging pedestals (such as electrical interference), with the majority of issues resolved remotely without the need for an engineer to visit the store.

“Through using the SMaaS dashboard, we can now more easily distinguish shops that are heavily affected by external theft and have been able to take action to address this. Theft patterns are now much more visible with data to support, so if for example, a store sees consistently high alarm counts every Tuesday evening between 6:00 and 7:00 pm, then more colleagues can be deployed to the sales floor during these times to provide a deterrent.”

This content is sponsored by Sensormatic Solutions. 

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