Independent Study Finds Sensormatic EAS Delivers ROI in Less than a Year

Grocery shoppers 

According to IDC Retail Insights, food retailers on average report 2% of sales lost due to shrink from shoplifting, check and gift card fraud, employee theft, vendor fraud and organized crime. While percentages vary by product category and company size, the most substantial losses are from general merchandise such as razors and batteries, health and beauty care, and baby related products such as infant formula.

A leading US grocery retailer has significantly reduced shrink through using Sensormatic acousto-magnetic (AM) Electronic Article Surveillance (EAS) technology. Based on a recent study conducted by a leading retail industry analyst firm IDC Retail Insights, the findings note the implementation of EAS technology not only serves as a theft deterrent to minimize loss, but also helps to improve inventory management and maximize labor usage.

The study evaluated the shrink performance of four stores over a six month period by using Tyco’s Sensormatic brand AM EAS anti-shoplifting technology and compared the results to stores without EAS. During the test, theft prone general merchandise and drug items were tagged at the source by product manufacturers, or tagged at the retailer’s distribution center. Most items had EAS tags placed inside products or their packaging, ensuring tagging consistency, and increasing the level of security.

At the completion of the study, the grocery retailer found:

  • Shrink in general merchandise and drug departments was reduced by 79 basis points, which is a significant percentage of overall shrink, in stores with AM EAS as compared to stores without;
  • Tagged items resulted in better inventory management, inventory reductions, and improved in stock position;
  • Minimizing in-store tagging by store associates enabled them to carve out more time to focus on customer service while simultaneously increased employee awareness towards controlling shrink;
  • The combination of Sensormatic AM EAS technology and source tagging can drive a “halo” effect onto other items in the same department preventing further theft.

IDC Retail Insights 

“For the purposes of this study we focused on the potential to reduce loss through EAS technology; however, the business benefits extend beyond that. The ability to reduce out of stocks also improves the customer experience enabling them to find the products they want to buy. This is critical as customer satisfaction, in stock performance and customer loyalty go hand–in—hand in today’s competitive market where there are simply too many other places a shopper can go to find the products they want,” noted report author Leslie Hand of IDC Retail Insights.

Grocery retailers face unique challenges when it comes to protecting high theft products in difficult categories. By combining our proven Sensormatic AM EAS technology with vendor source tagging, our customers can not only leverage a powerful theft deterrent, but also drive operational improvements. This study reconfirmed the value of the customer’s EAS investment and reinforced that, with proper execution, greater results can be derived.

Click here to read the IDC Retail Insights study.

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Filed under Acousto-Magnetic; Loss PreventionKeywords acousto-magnetic; EAS; electronic article surveillance; grocery; loss prevention; shoplifting; shrink; tags

Published on 10/25/2013 Permalink

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