What lies beneath

However, unless retailers and manufacturers accept that it needs to feature higher on their agendas, and be integrated further up the supply chain, the potential offered by the future of EAS could remain untapped in the UK.

According to the recent European Retail Theft Barometer – the first crime survey involving retailers from across western Europe, and conducted by the Centre for Retail Research – the UK topped the league for retail shrinkage in 2001. Worryingly, the survey – commissioned by Checkpoint Systems – suggests that matters could well become worse before they show any signs of improvement.

A massive 86% of retailers questioned predicted that the upward trend would continue, and that 2002 would see a further deterioration in reported shrinkage figures.

The development of EAS
One of the most important ways of helping to reduce shrinkage is the use of EAS. In the 30 years since it was introduced, EAS has become a permanent fixture on most shop floors, and is now used across a huge variety of merchandise – from clothing to drinks and cosmetics.

Driven by the ongoing problem of theft, the retail industry is constantly seeking to limit its losses and improve security and, as such, is instrumental in developing EAS technology in this country. However, the battle against theft is a constant struggle. Technological advance – and the increasing pace at which the retail industry operates – continues to fuel a need for the future development of EAS.

Increased shrinkage and technological progress mean that EAS in the future will produce more sophisticated and more advanced methods of protection as the pace gathers within the retail sector. In addition, as retailers strive to limit shrinkage not only at point-of-sale but at every stage throughout the retail supply chain, those means of protection will need to be introduced at the point of manufacture. This will minimise the loss that occurs even before merchandise hits the shop floor. In this way, from point of production right up to the point of purchase, EAS and its future incarnations will allow for total traceability.

In truth, the development of smart source tagging such as Radio Frequency Identification (RFID) technologies will provide the answer. Offering total asset visibility, retailers will be able to access a product's history at any point along the distribution network. Information such as date, time and place of origin of the product will be available, along with details of how, when, where and to whom it was sold.

Such developments form the basis of the future but, while most certainly exciting, the more immediate concern for EAS remains the widespread availability and acceptance of source tagging. Only when this is achieved will the future potential of EAS really be unveiled.

An alternative to the traditional
Source tagging will offer the retailer an alternative to traditional EAS tagging in store while still providing all the protection benefits associated with EAS.

The opportunity to integrate the device 'invisibly' into a product or its packaging allows the retailer to focus staff resources on its customer base. Also, the 'invisibility' of the system will leave potential thieves unsure what is and what isn't actually tagged. This so-called 'halo effect' is a powerful deterrent in itself.

The most immediate concern for the future development of Electronic Article Surveillance (EAS) remains the widespread availability and acceptance of source tagging. Only when this is achieved will the true potential of EAS really be unveiled. Once attaine

Studies prove that a retailer's ability to display goods openly significantly increases both brand awareness and impulse buying, with approximately 74% of all purchasing decisions made spontaneously in store. However, the threat of theft forces many retailers to fasten down or lock away high value goods in order to protect them. Inevitably, this reduces the likelihood of any impulse buying.

As a company, we're constantly working alongside in-house security managers with a view to maximising the retail experience for their customers. That's the main reason why we organised the European Source Tagging Forum as a way of raising awareness of the huge benefits to be realised with RF-EAS. European retailers acknowledged the huge financial problem that shrinkage causes, at the same time identifying source tagging as the most effective way to reduce it.

Covering the cost
It's widely acknowledged that source tagging not only alleviates shrinkage, it also helps in increasing supply chain efficiencies, lowers labour costs, improves display opportunities, increases sales and enhances the retail experience in all sectors.

That aside, there is still an unwillingness among most manufacturers and packagers to cover the cost of source tagging on behalf of the retailer. As a result, the conversion rate has been slow (in spite of the long-term savings far outweighing the initial outlay). At the Forum, it was suggested that a new global standardisation and implementation of source tagging with the security technology of the future – namely New Digital Radio Frequency (New Digital RF) – is needed to reach the goal of reduced losses and increased profitability.

New Digital RF offers increased reliability and very high detection rates at entry or exit systems. RF Tags are paper thin, flexible and virtually invisible so they resist tampering. With New Digital RF, there is a greater flexibility in providing tags suitable to the environment in which they are to be used.

In the United States, source tagging has become a prerequisite for most major retailers and, through the adoption of a fairly aggressive approach, mandatory supplier source tagging has been relatively quick to take effect. Including a clause in the vendor's manual is one way that US retailers have ensured source tagging compliance. That said, in the UK we are still some way behind our cousins across the pond when it comes to adopting source tagging as the norm.

Five years ago, packagers and manufacturers in this country wouldn't even entertain the possibility of covering the cost of source tagging, but over the past two-to-three years we've worked to re-educate and persuade them that source tagging is where the future of product protection lies.

Bespoke solutions are the best
Gradually, we have been able to cultivate an understanding of the issues and the reasons why manufacturers need to embrace EAS technology now rather than get left behind. Slowly but surely, these same packaging and manufacturing concerns have started to ask us for advice on how best to gear their businesses to survive in the future retail climate. We have also approached retailers in a similar way, working with many to look at how they might incentivise suppliers to adopt source tagging and assess the best value and most cost-effective solution for their operation.

Progress continues to be made, but if we are to be successful we must ensure that not only are those directly involved educated about the benefits of EAS, but that – internally – companies are committed to bringing the issue to the fore.

It's vital that we bridge the gap that exists between buyers, merchandisers and security departments. It's also vital for retailers and manufacturers to work together to minimise the stock 'disappearance' that occurs right along the supply chain. Source tagging offers the most practical solution for doing so.