Following a period of economic downturn in which we have seen opportunistic thieves increasingly target food products, supermarkets continue to face a risk of theft with the Global Retail Theft Barometer identifying meat and cheese among the most stolen items.
Security solutions have long been a source of frustration for retailers and brands, and the packaging industry plays a key role in working with them to overcome the obstacles they face. It is vital for stock to be secure, however it also crucial to avoid obstructing any product information, be it promotional or legal.
Source tagging, the process of applying a security label to a product’s packaging at the point of manufacture, can be easily integrated into an existing packaging line and is proven to reduce shrink, while delivering additional benefits throughout the supply chain. These include helping to increase sales, reduce out-of-stock incidents and importantly enables the brand’s packaging to remain exactly as it was originally designed. Packaging manufacturers can add more value to the service provided to retailers by implementing a source tagging programme.
A recent study into Electronic Article Surveillance (EAS) found that 107 retailers from 15 countries noted that increasing the number of vendors that source tag was moderate to very important to them. So how can you meet their needs while ensuring it’s adding value to your business? Here are four important steps to follow;
Data is king. It drives the majority of the business decisions. Before any verdict is made to implement a source tagging programme, a retailer’s loss prevention team need to analyse the data that is at their disposal. This will enable them to make informed choices on what products are most at risk and should be selected for a trial.
The role data plays shouldn’t stop there. Once products have been identified, it’s vital to collect more during a trial period undertaken with the product manufacturer. Working closely with the manufacturer, the solution providers’ source tagging team will deliver relevant data on the audits, enabling retailers to compare pre- and post-data on source tagged items, demonstrating a clear potential return on investment. The ability to present tangible results will aid you in your quest to secure contracts to implement a source tagging process in the product line. In my experience, it’s particularly important for manufacturers to engage with the financial and buying teams as well as those that traditionally speak to the suppliers and manufacturers more frequently than loss prevention departments do.
Following a successful trial, the real work begins. From the outset, the solution provider will work closely with the retailer and the manufacturer. From factory staff and pickers to product development teams and loss prevention managers, collaboration and communication is essential to ensure a successful project across the whole supply chain.
The solution providers’ source tagging team will visit the manufacturers’ factories to evaluate their operations. No two factories are the same and it is important that retailers understand how the procedure can fit in with each suppliers’ unique processes. It’s advantageous if the retailer’s account manager has technical, factory-level experience, and is able to fully understand the challenges of introducing a new labelling process while advising which solutions are best suited to each supplier. But if this is not possible, its mutually beneficial for the manufacturer to work closely with the source tagging supplier, educating them on the production process and discussing how best to integrate the source tagging programme.
Once the right solution has been identified, the solution provider should complete a test and run a trial, working in close collaboration with the manufacturers to ensure compliance along the production line. Once tagged, a sample of products will be taken to the solution provider’s ‘Source Tagging Laboratory’ to check whether the detection and deactivation is suitable for the stores in which they will be sold.
Testing deactivation ensures incidents of false EAS alarms are kept to a minimum and also ensures a quicker customer checkout, improving customer satisfaction levels. Of course, it is equally important to test detection to ensure that labels are placed in an optimal detection position during the semi-automated source tagging process.
Once testing is complete, the source tagging programme is ready to be rolled out. A successful project is not a short term solution that can be switched on and off, it should provide added value that can result in it becoming an invaluable addition to the manufacturing process and maintained throughout the products order cycle with new detection testing carried out as and when there are packaging alterations. Given that source tagging allows packaging manufacturers to provide a secure solution that doesn’t obscure branding or important product information, it shouldn’t be a surprise that retailers can significantly reduce pilferage and ultimately look to scale-up all future product lines.
Typically, it can take up to six months to implement a source tagging programme, but this can be reduced to just a month if the packaging industry works closely with a specialist to follow these aforementioned steps to help ensure the project is successful and delivers ROI in the quickest possible time for all parties involved.
Checkpoint Systems, a division of CCL Industries, addresses two critical issues for its customers: Improving Profitability and Improving Consumer experience. With consumer demands accelerating at an extraordinary rate driven by technology, Checkpoint recognizes the challenges faced by its customers in the rapidly evolving retail market. We deliver intelligent solutions – bringing clarity and efficiency into the retail environment anytime, anywhere. Through a unique offering of software, hardware, labels, tags and connected cloud based solutions, Checkpoint optimizes operational efficiencies through analysis of real time data captured throughout the Supply Chain and in store then translating this to clear concise actions and tasks.
We provide end-to-end solutions enabling retailers to achieve accurate real-time inventory, accelerate the replenishment cycle, prevent out-of-stocks and reduce theft, thus improving merchandise availability and the shopper’s experience. Checkpoint’s solutions are built upon 48 years of radio frequency technology expertise, innovative high-theft and loss-prevention solutions, market-leading RFID hardware, RFID software, and comprehensive labeling capabilities, to brand, secure and track merchandise from source to shelf. Checkpoint’s customers benefit from increased sales and profits by implementing merchandise availability solutions, to ensure the right merchandise is available at the right place and time when consumers are ready to buy. Checkpoint operates in every major geographic market and employs 4,500 people worldwide.