Mythbuster: overcoming the top five security labelling myths
Dave Dalton, Director Source Tagging, Checkpoint Systems UK
The security labels segment is projected to be the fastest-growing industrial labels type in this market in the next five years. It is being driven by increased recognition among retailers and manufacturers of the added value visible security labels now provide.
Security is a key factor and as the Christmas period fast approaches, the risks faced by retailers will inevitably increase. The 2016 Global Retail Forecast recently revealed that alcohol, food and electrical goods will be among the top shoplifting targets, so loss prevention measures will play a crucial role in stores across the country – especially with ever shrinking margins needing to be protected.
Despite the obvious advantages to protecting merchandise through security labelling, there are still myths deterring retailers from investing. Here we look to address these misconceptions and highlight the benefits that are often overlooked as a result.
- Labelling is too labour-intensive
By investing in an @source programme, retailers can move the non-value added labour required to secure merchandise outside the store to the most efficient location in the supply chain – the point of manufacture or in a distribution centre. This ensures chain-wide consistency, while enabling staff to concentrate on replenishing shelves and selling products, rather than spending time applying security labels. Reputable label providers will offer full consultancy support and manage vendor relations throughout the trial and tagging period.
Labels can be integrated into existing packaging lines and proven to reduce shrink, while delivering additional benefits throughout the supply chain. These include helping to increase sales and reducing out-of-stock incidents. By streamlining operations and accelerating speed-to-shelf, retailers can reduce handling costs and aid self-service formats.
- Security labels only purpose is for loss prevention
According to the ECR Group, a 1% improvement in on shelf availability can lead to a sales increase of 0.5%. Loss prevention professionals can move beyond thinking that security labels are solely about theft and turn to all-purpose solutions that add value to operations. By diverting would be thieves, more products will be available on shelves for the honest shopper to purchase, by default – increasing sales.
What’s more with the vast array of RFID labels now on offer, retailers have the tools they need to enhance customer experience. RFID-based asset tracking provides the real-time status of merchandise within a business’ supply chain, allowing a retailer to identify exactly where an item is located. This solution can establish what is in the distribution centre, whether it has been placed in the store warehouse, or using a handheld reader can even inform a shop assistant where on the shop floor a particular item is, which is vital for the replenishment of goods.
- Labels detract from the customer experience
Shrink due to theft represents a double-edged sword for retailers. It’s important to maintain a balance between enticing customers through good, clear branding while at the same time putting off potential shoplifters. Displaying merchandise openly is proven to increase sales, but it also makes it easier for dishonest customers to steal.
Label solutions are now smaller, more accurate and more versatile than ever. By connecting product branding and security solutions, retailers can manage artwork and branding around the placement of labels. This guarantees branding messages remain prominent for the customer, with visible security messaging incorporated into the package design and the security label being placed in an optimal detection position to ensure quicker customer checkout, improving POS deactivation while maintaining customer satisfaction levels.
- Labels cost more than they’re worth
It’s key to map out an accurate forecast of where a security label programme will deliver strong ROI, starting with understanding exactly how much you are losing today. This includes inaccurate inventory, time spent by employees trying to sort out an out-of-stock situations and lost sales when an item is not available for the shopper who was ready to buy. The key is understanding the big picture before starting the pilot phase, and focusing on key SKU’s.
When it comes to costs, a fully managed @source programme demonstrates its value quickly. Source tagging is proven to reduce external shrinkage by as much as 50%, at the same time ensuring merchandise is always available and on full open display to potential customers who can interact with it while they consider their purchase.
It is also worth reviewing the challenges of store staff not correctly applying anti-theft devices. Compliance issues and time spent training staff to hand apply in store are some of the pain points most associated with security labelling products in-store. However if key lines are delivered to stores already security protected, retailers can streamline in store processes, eliminate errors, improve staff efficiency – delivering a strong ROI across numerous areas of the business.
Moving beyond a temporary solution
A successful security labelling 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 new products or packaging alterations. This is a sector that has rapidly advanced and with the technology now available, retailers no longer need to be deterred by myths and can confidently start working with a solution provider who can solve several specific challenges.