Expert Column: Electronic Article Surveillance: Myths and Realities

As other retail categories provide a wider selection of grocery items, consumers have more choices in where to do their weekly shopping. Supermarkets are shifting business and technology strategies to engage customers and keep them coming back. Electronic article surveillance (EAS) technology can play a key part in increasing sales, profits and customer loyalty, but myths about EAS abound. For example:

Myth #1: EAS technology hasn’t kept pace with the supermarket industry

Reality: The supermarket industry has changed dramatically in the past decade, with renewed competition from dollar stores, superstores, pharmacies and small-format grocery stores. To keep customers engaged and to increase the transaction value of each visit, supermarkets have broadened merchandise assortments to favor more profitable categories such as fresh meat, health and beauty care, and pharmacy. In line with improving customer loyalty, supermarkets have invested heavily in store remodels and in green initiatives. EAS technology is well aligned with these new objectives.

Myth #2: EAS is just for loss prevention

Reality: EAS technology is often equated with loss prevention, but shrink reduction isn't an end in itself. Most supermarkets invest in EAS to improve the customer experience, and ultimately to increase sales and profits. Supermarkets have found that when EAS is visible within a store -- systems are operational, security labels show a product is authentic and not tampered with -- shrink goes down, products stay in stock and sales of high-profit items go up.

Recent studies at supercenters and pharmacies show that customers feel much safer and are more likely to frequent stores with visible loss prevention measures in place. More than any other store format, supermarkets serve the local community. Therefore, the more comfortable customers are, the more they'll make their weekly shopping trip at the local supermarket, instead of the growing number of outlets that are expanding their grocery aisles.

Myth #3: EAS detracts from the customer experience

Reality: A common myth about EAS technology is that it gets in the way of the sale, from a false alarm at the exit door to cumbersome deactivation at checkout. EAS technology has evolved over the past decade to enhance the customer experience, rather than detract from it. For example, today's clear labels and tamperproof seals in a wide variety of sizes enable open merchandising and allow customers to browse and purchase items, while protecting against theft. EAS systems offer automatic deactivation with bioptic scanners that integrate with any POS process, including traditional checkout, self-checkout, self-scanning or mobile checkout. There's a wide array of designs to match store format, layout and color scheme. False alarms have been virtually eliminated, and specially designed tags withstand high-speed application-at-source manufacturing and provide higher detection rates in-store.

Myth #4: EAS is too labor-intensive for store associates

Reality: Today's EAS systems can assist store associates in providing a better customer experience. By streamlining product tagging (or tagging product at source), providing integrated deactivation at checkout and preventing false alarms, EAS systems keep merchandise protected without overburdening store personnel.

Myth #5 EAS ROI is hard to quantify

Reality: EAS ROI can be quantified in reduced shrink, decreased out-of-stocks and increased sales. In benchmark tests run by IDC Research, PricewaterhouseCoopers and independent auditors, retailers selling grocery and nonfood items have experienced the following hard benefits from EAS systems:

• Decreases in shrink from 55 percent to 79 percent
• Increases in sales from 2.5 percent to 9.2 percent
• Payback from six months to 18 months

Every supermarket chain, as well as each retail location, experiences shrink and inventory availability at different levels. EAS pilots that measure "control stores" against "EAS test stores" -- selecting stores that are characteristic of an entire chain and focusing on high-risk SKUs -- can determine the specific value of EAS in a retailer's environment. ROI calculators based on composite data from supermarkets, dollar stores, club stores and superstores can provide metrics for initial pilots and ongoing chain-wide rollouts.

EAS has been protecting stores against retail shrink for more than 40 years, so you may not have noticed more recent trends. But changes in EAS technology over the past 10 years have significantly reduced its limitations and increased its benefits, so that some myths that were true several years ago now no longer represent reality.

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