Whether we like it or not, development and advances in technology are impacting on more and more aspects of our lives, both business and personal. Greater sophistication and speed, broader access to information, simpler means of interaction, and reducing costs are all by-products of the technology revolution. Within the retail environment, these trends are similarly changing the face of how security issues are approached and dealt with.
Electronic Article Surveillance (EAS) systems
EAS systems have traditionally provided the backbone of retailers' loss-prevention systems. In the 30 or so years that EAS systems have been in operation, their presence within retail stores has become increasingly widespread as the systems' effectiveness have been enhanced, and their aesthetics have been improved. The efficacy of EAS systems in controlling shrinkage is well demonstrated by the extent to which they have been adopted. In more developed countries such as the United States, two out of every five retail outlets employs an EAS system, with almost blanket coverage within sectors such as video rental, pharmacy and music. Whereas the South African market is less well developed than that of the US, similar trends are nevertheless apparent.
Recent advances within EAS have seen the incorporation of digital controllers into systems, enabling even greater improvements in consistent and effective detection of electronic tags, as well as the automation of system configuration and adjustment, resulting in fewer false alarms caused by environmental interference. The technology also now offers cost-effective coverage of wide entrances and exits without the impediment of any visible pedestals.
The size of EAS tags is diminishing while the power and utility of them is increasing. Smaller, more powerful tags mean more assets (disks, documents, OTC remedies) can be protected in more environments. EAS tags can now be placed in the product, in the packaging, in price tags and on the product or packaging.
As a result, source tagging (the process whereby tags are placed on the product or in its packaging at the point of manufacture or distribution) is rapidly gaining momentum, internationally as well as in South Africa. For example, in the US, all major music manufacturers are now source tagging CDs, and 100% of all new DVDs coming out of movie studios now carry an acousto magnetic tag.
Radio Frequency Identification (RFID)
The future application of EAS is even more exciting with the proven ability to connect the radio frequency transmission and/or receiving capability of systems with computer chips. The promise is of very small but very smart EAS chip systems, providing a multitude of benefits.
EAS systems will then provide users with inventory control information, marketing data and loss control protection - all at the same time. Every business needs their assets and products to make it to the right place at the right time and in the right quantity and in the right condition. RFID systems allow a company to monitor items during manufacture, while in transport, in distribution facilities and in stores. Retail items can be tracked and compared with customer data to fine tune marketing, repair and inventory efforts.
Critics will say that the strength of this promise has been slow to come to fruition, a comment applied to the development of automated identification of assets in virtually every business sphere. However, recent developments indicate that the widespread application of RFID systems within retail is actually far closer than many sceptics postulate. Having conducted a series of extensive trials, UK-based Marks & Spencer recently announced that it was replacing bar codes with an RFID-based electronic tagging system to track and manage its refrigerated food products throughout the chain. This system will track reusable trays, dollies and roll cages throughout the firm's refrigerated food supply chain.
In addition, Sensormatic Electronics Corporation (now a division of the security giant Tyco) are rapidly escalating the application of its combined EAS/RFID systems within US and European markets, particularly within the apparel and video rental sectors. To date, the major constraint on the integration of RFID with EAS systems has been cost. However, trials conducted at firms such as Movie Gallery and Block Buster (within video), and J. Crew and the Spanish chain Zara (apparel) are now leading to chain-wide implementation of the technology to improve productivity on tracking inventory within the retail supply chain right through to the shop floor. Similar systems are currently being introduced to the South African market.
Digital video
Digital video recorders have rapidly become commodity items. End-users have quickly embraced the advantages that digital offers, and the technology has matured to the extent that it has been shown to work and to add value. Now faced with a multiplicity of suppliers, retailers are quickly recognising that the full value of digital systems will only be realised through their intelligent application to real business issues, and through successful integration with other technology systems and internal processes and procedures. Two areas in particular deserve commentary as offering these additional benefits.
* Data mining
Retailers have long recognised that internal or staff theft represents the most significant source of shrinkage. And yet detecting and deterring theft amongst employees is often far more difficult than finding dishonest customers. Employees have the advantage of knowing the weaknesses of internal administration systems, and recognise (and may even be friendly with) management or staff whose role it is to protect the company's assets.
Whereas the management of point-of-sale activities using video recording triggered by exceptions is not new, these systems tend to be reactive, with the result that their effectiveness is constrained. Once a particularly suspect activity at a till has been carried out, such a system typically allows for the transaction along with the associated video footage to be reviewed to determine whether fraud took place. This, however, occurs in isolation and after the event, with little application of system intelligence to identify further breaches in security.
A further constraint on existing point-of-sale monitoring systems is that the management and review procedures must typically take place within the store in isolation of other stores within a chain. Bandwidth limitations and the hungry nature of video data generally restrict the transmission of multiple files to a central monitoring resource.
The significant development within this field has been the integration of digital video systems with data mining, being pioneered by DNA Sensormatic. The principles of the system are that the point-of-sale transaction data from every store within a chain is dumped on a daily basis to a regional or central control point. Sophisticated data mining software is then able to interrogate the data to establish trends, benchmarks and control points through analysis of multiple cashier activity across every store within a chain. This way, exceptions and suspect activity (such as refund fraud, false markdowns, sweethearting and other illegitimate use of discount entitlements) may be highlighted with far greater accuracy and flexibility. Multiple computations in report writing provide precise statistical indications of where problems may lie.
Through the linking of such a data mining capability with a sophisticated networked video system, video evidence may then be retrieved by the central control point on an as-needed or on-request basis, greatly reducing the demands and impact of the transmission of video over existing wide area networks.
* Receiving bay management systems
The second effective application area of digital video systems, similarly pioneered by DNA Sensormatic within South Africa, is in the management of receiving bay operations. The system requirements are to both reduce or eliminate internal shrinkage within receiving bays, as well as provide documentary evidence of receiving activities should there be a need to institute a claim against a supplier for short supply or incorrect invoicing.
The sophisticated system employs an integration of voice and digital video recording, triggered by the activation of magnetic door locks on receiving bay cages. Linking this within a store's local network (as well as potentially to a chain's wider area network) facilitates broad accessibility to review all receiving bay activities, and provides documentary evidence that can be simply and easily transmitted to suppliers as and when it is needed.
About the author:
Dave Pople is marketing manager of DNA Sensormatic, a leading local provider of digital security and control solutions to the retail, commercial and industrial marketplace, helping customers reduce their wastage, loss and inefficiencies throughout their supply chains. For further details contact 0860 60 40 60, or e-mail [email protected]
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