LP Magazine

MAY-JUN 2018

LP magazine publishes articles for loss prevention, asset protection, and retail professionals covering shrinkage, investigations, shoplifting, internal theft, fraud, technology, best practices, and career development.

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SECURITY AT THE SOURCE 46 MAY–JUNE 2018 | LOSSPREVENTIONMEDIA.COM component of effective collaboration between manufacturers and LP organizations, mechanisms to encourage it could improve. Widup, for example, is a passionate advocate for current avenues of partnership but also wishes it were easier to share alert-type information between the two groups, to provide a heads-up on emerging theft issues and problems, for example. "I do wish we had more tools available for that kind of thing. What we have now is not really fast enough to keep pace with the accelerating timeline of threats," he said. There is an idea, too, that while current deliberate processes are effective, LP and manufacturer partners might benefit from faster, more experimental approaches. "We've got to improve our comfort level with working with more leading-edge, start-up like service providers, and provide them the opportunity to test their products in a live environment and to be willing to create partnerships with them," said Inzeo. "It is critical because the environment is changing so quickly that we don't always have the time to go through the traditional phases of test, deploy, and roll out and to wait for scalable solutions. I think we have to identify and implement solutions much more rapidly." As an efficient, cost-saving process, one that provides benefits to both retailers and product manufacturers, source tagging remains a dominant force in product protection. But even in the tried-and-true, there is change. Keith McUmber, director of source tagging at Checkpoint Systems, said a developing trend is to move source tags from inside product boxes to outside, where they are visible to potential thieves, as belief is waning in the "halo effect," the idea that hidden tags on some products make thieves fear tags on all products and thus prevent theft more generally. Tests of visible source tagging "has showed some dramatic shrink results and lift in sales for chain drug stores," said McUmber. Renee Micek, a sales specialist at Avery Dennison, said she's seen manufacturers increasingly sourcing UHF RFID because more retailers are mandating it to be put onto their products to help with traceability throughout their supply chains. DeHoratius also sees opportunity in going after mistakes, rather than crooks. "A reason why we see a lot of discrepancies is because there are not sufficient visual cues on packaging, cues that simplify and make it easy to distinguish, easy to count, track, and reorder." A solution, then, is getting vendors to think about imposing visual cues to prevent problems. For example, Columbia Sportswear ships shirts in a colored container to match the color of the shirts inside it. Or perhaps a maker of deodorant can make a different color cap for each different fragrance. These are simple ideas that can help to reduce costly errors. More broadly, DeHoratius said her research points to a few keys to reducing shrink: reduce product variety; reduce inventory density; increase the frequency of audits, particularly smart audits, to utilize an inventory record that is not simply a point estimate but rather a distribution that can shift and adjust based on transactions over time. Inzeo, like many LP leaders, is anxiously awaiting solutions providers to embrace the "huge opportunity" that exists to deliver the next breakthrough solution—the one that carries manufacturers and LP forward. He suggested that hard solutions, such as boxes around products, aren't really a great fit for how retail is rapidly transforming generally, that benefit denial is a terrific concept but that it can't be applied to a tube of lipstick, and that there is less sense today in the industry that tags are the answer. "I don't really see the EAS pedestal as being the solution that carries us all into the future," Inzeo said. The extent to which tags are relied upon in the future could depend on retail's perception of organized retail crime. In a 2016 survey by Colin Peacock of 107 global retailers, 72 percent of respondents said hard tags are "very/extremely effective" against opportunistic thieves, but only 16 percent felt that way about the technology's effectiveness with respect to organized thieves. While Inzeo isn't sure what the answer is, he knows what he needs: a solution that improves on-shelf availability, can scale to 20,000 items, and doesn't demand additional work from the store team, or better yet, removes some. As a priority for Walgreens AP, product availability No one seems to believe truly universal product protection solutions are viable today, but there is yearning on both the manufacturer and retailer side for additional uniformity, answers that can be applied more widely across retail channels. Keith McUmber continued from page 44

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