Now is the time to embrace new EAS technologies - 24/02/2017

With retail markets shifting and technology advancing, demand for Electronic Article Surveillance, or EAS, systems is growing. At Century Europe we’re excited to be operating at the forefront of this market, especially in Europe’s number one EAS country, Germany. In this blog post I’d like to discuss some of the key challenges and opportunities for EAS systems in retail – and their potential for reducing labour, cost and shrinkage at your company, while improving stock management and boosting sales.

There is no doubt that the Electronic Article Surveillance (EAS) market is growing and will continue to grow in the years ahead. Many market watchers even forecast significant growth. Hexa Research, for example, projects a compound annual growth rate of around 3%, or over, between 2016 and 2024.

Shrinkage is a key driver

The key driver of this growth is shrinkage, or the loss of inventory – and revenues. This is due to factors such as employee theft, shoplifting, administrative errors – think of poor inventory management or pricing mistakes – and vendor fraud. Retail shrinkage is growing all over the world. In a study of 2015 figures, the Global Retail Theft Barometer published the following key findings:

• Cost of global retail shrinkage: almost €125 billion every year (1.23% of retail sales);
• Main sources: dishonest employee theft (39%), shoplifting (38%) – which means effective anti-theft measures could reduce shrinkage by over 75% – administrative losses (16%), supplier fraud (7%);
• Most stolen merchandise: footwear, batteries, mobile device accessories, wines and spirits, razor blades;
• Five key loss prevention practices: improved data management; loss preventions solutions, such as EAS; awareness programmes, such as store signage; source tagging (which reduces store labour and ensures tagging compliance); pre-employment background screening.

“Effective anti-theft measures, such as EAS, have the potential to reduce retail shrinkage by over 75%, saving the global retail market over €93 billion every year”

Loss prevention is a money saver

Among European retailers, loss prevention is gaining attention as an important business issue. With margins under pressure, a growing number of retailers, especially larger ones with hundreds of outlets, are recognizing EAS as a money saver. However, our figures at Century Europe tell us that no more than 20% of European fashion retailers – fashion being the lead market for EAS at present – have implemented EAS so far. The other 80% are waiting. But for what? The main argument we hear against EAS implementation is that it involves heavy investments. Which, granted, is true. For a mid-sized retailer with, say, 200 stores, the investment needed for creating labels, installing software, equipping fitting rooms and exits, and training staff can easily run into tens of millions of euros. Enough to make any entrepreneur think twice. What many of the retailers using this argument fail to realize, however, is that the payback period for EAS is extremely short. This is because EAS systems save money in several ways at once:

• Reduced shrinkage (both employee theft and shoplifting);
• Reduced labour, as RFID tags can be scanned en masse without each product having to be manually unpacked;
• Improved and automated stock management, resulting in fewer errors, greater sales flexibility, more time spent on customer service and higher sales.

“With an advanced EAS programme, such as our RFID system, you can count on reduced shrinkage, reduce labour costs and higher sales due to more streamlined and flexible stock management”

Now is the time to embrace new technologies like RFID

Another exciting aspect holding out huge potential for EAS users is the rapid advancement of technology. A prime example is our state-of-the-art Century RFID (Radio Frequency Identification) system. This technology allows us to identify products by applying an RFID label. For example, you can use RFID:

• to track individual products during production;
• to track pallets up and down your supply chain;
• to track and control your inventory with greater accuracy and efficiency.

The Century RFID system, which is ISO 9000- and ISO 14001-certified, offers many valuable benefits. It can be coupled to your company’s Enterprise Resource Planning (ERP) system, or can include so-called source tagging. Source tagging is the process of applying EAS labels or hard tags directly in or onto the product during the manufacturing or packaging process. It means that as a retailer you don´t have to do any anti-theft labelling, tagging or subsequent repackaging yourself, but that your deliveries arrive floor-ready – another welcome time and money saver. Source tagging thus improves product (and staff) availability, while decreasing the amount of damaged stock. Not only does source tagging allow you to track individual products all the way from factory to store, the tags can also carry – and collect – other data that may help you improve your business, such as product specs, transportation times and more. From a stock management point of view, these are really exciting solutions, especially for mid-sized to large monobrands with high volumes, short turnover times – think fast fashion – and just one or a few sourcing locations.

Organic growth across Europe, with the German market as a touchstone

Century Europe is one of the world’s leading players in these new anti-theft and stock management technologies. We’re present in practically every country in Europe, with an especially strong presence in Germany. The German market is important to us. Not only is it home to a lot of major apparel brands – from Puma and Adidas to Tom Tailor, Bruno Banani, Esprit and Marc O’Polo – but it is also the most demanding and technologically advanced market. If it works in Germany, it will work almost anywhere else. With leading German retailers as our touchstone, we are putting a lot of effort into developing our position through solid, organic growth, as a knowledgeable, trustworthy European solutions provider with our own production in China and a drive to invest in long-term customer intimacy. And the feedback we’re getting from customers is really positive. Our sales team members are becoming familiar faces and customers appreciate the fact that we speak their language – both literally and figuratively. We know where the market is going. We know, for example, why fast fashion players might benefit more from a low-cost anti-theft tagging system, whereas a high-end monobrand may require a more advanced solution.

See you at the Euroshop trade fair in March!

If you’re interested in EAS in general and in the Century RFID system in particular – or you simply want to find out more about what is happening in this market – be sure to visit our stand at the upcoming Euroshop trade fair from March 5 to 9 in Düsseldorf, Germany. Euroshop is Europe’s leading retail trade fair and we will be taking the occasion to showcase the newest and most exciting solutions in RFID, Electronic Shelf Labelling (ESL) and source tagging.

Can’t wait until March? Contact us today. We look forward to hearing from you.