Anti Theft Source Protection Roadmap
ECR Workgroup
Jos Joos, Practice Leader
Consumer Industrial & Technology Markets
Jan Somers
ECR Belgium
Summary
Start WG
Aim/ Deliverable WG
Who is involved?
Different phases to work on …
Next Steps
Questions
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Start WG & Deliverable

The trigger was FEDIS (Federation of Distributors)

Within the ECR Belgium WG was then decided to start a sub WG in anti-theft


Kick-off meeting on the 28th of April 2006 of the ANTI-THEFT SOURCE
PROTECTION PROJECT
Aim/deliverable of the WG : an Anti-Theft Roadmap/Protocol
(recommendation at least on national level, if possible on European level)
© 2005 BearingPoint, Inc.
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Who is involved?

Retailers : security and lost prevention managers/risk management
CARREFOUR Belgium – Colruyt – Cora - Delhaize Group – Makro - HUBO Belgium
(DO-IT-YOURSELF) - FEDIS

Manufacturers : security/logistics managers
DHL – Henkel - L’Oreal - P&G/Gillette

Solution Providers : solution managers/ technical advisors
Checkpoint Benelux – TYCO ADT Sensormatic – BearingPoint (management
& technology consulting)
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Different phases to work on ...

PHASE 1 : Clarify business needs & requirements of all nodes in the Supply Chain
 Define scope incl. product categories (f.e CD, alcohol, textile, razors, ...)
 Size the business opportunity (gathered data, quantified losses, ...)
 Current Situation (measures taken and efficiency, pain points, ...)
 Brainstorming about TO-BE situation (what has to change?, info needs, ...)

PHASE 2 : Evaluate technical solutions
 Define services/functionalities around required information per node in the SC
 Overview/evaluation of potential technologies
 Benchmark existing SW solutions
 Evaluation of implications for implementation (technical issues, process changes,
integration of captured information, public issues, cost & benefits sharing, ...)
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Different phases to work on ...

PHASE 3 : Pilot
 Proof of concept
 Test on a selected number of products with the selected technologies, evaluate SW
 Evaluate the results before and after

PHASE 4 : Deployment
 Validate rules for deployment
 Agree on scope for deployment
 Apply learnings from pilots
 Propose Roadmap

PHASE 5 : Extension towards traceability beyond theft
 Evaluate applicability to track and tracing in general
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PHASE 1 : Clarify business needs & requirements
of all nodes in the Supply Chain
I. Definition Anti-theft
 according to ECR Europe Shrinkage Report
 definitions in Charter DIY/Protocol FEDIS
II. Gathering data anti-theft, quantify losses, ...
III. Define product categories
IV. Current situation (current protocols, ...)
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PHASE 1 : definition ant-theft/ gathering data antitheft / product categories/ current situation
Taking the definition for Shrinkage as a starting point…
Process Failures
Internal Theft
Out-of-date products
Staff theft
Incorrect pricing
Collusion staff/customers
Product identification errors
Employees eating stock
Scanning errors
Deliberate manipulation of prices
...
...
External Theft
Inter-company fraud
Delivering/returning fewer goods than agreed
Incidents of shoplifting
Vendor and contractor fraud
Fraudulent return of goods
...
Till snatches
Burglary
...
Source: ECR Europe Shrinkage Report
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PHASE 1 : definition ant-theft/ gathering data antitheft / product categories/ current situation
Costs for Stock Loss are tremendous
The costs are tremendous
€ 465 million per week in FMCG Europe
or € 2.8 million per hour in FMCG Europe
Taking into account the razor-thin margins in the sector, it is clear
that the pressure to reduce stock loss is high
DANTE Consulting
© 2005 BearingPoint, Inc.
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PHASE 1 : definition ant-theft/ gathering data antitheft / product categories/ current situation
Shrinkage – Best Estimates on Causes of Loss
Primary Causes
External theft
Process failures
Inter-company fraud
Internal theft
ECR Europe 2004
38%
27%
7%
28%
Checkpoint Theft Barometer
48%
16%
7%
29%
University of Florida 2003
32%
15%
5%
48%
ECR Australia 2002
35%
29%
11%
25%
Note: Surveys all asked loss prevention professionals to estimate the
Contribution of each root cause to the total loss within their organisation
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PHASE 1 : definition ant-theft/ gathering data antitheft / product categories/ current situation
Retailer’s Missed Profit Opportunity
Average Retailer Margin
5%
4%
1.8%
3%
Average
Retailer
Shrink
Margin
4.8%
2%
Average
Retailer
Net Profit
3%
1%
0%
Current
Potential
Source: Cranfield University
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PHASE 1 : definition ant-theft/ gathering data antitheft / product categories/ current situation
Unizo Top List of Theft Sensitive Product Categories
Perfumery
62.7%
Drinks
47.8%
Clothing
36.4%
Digital cameras
34.0%
GSM
33.0%
Dry Grocery
31.3%
Cigarettes, ...
17.9%
Cosmetics
16.7%
DANTE Consulting
© 2005 BearingPoint, Inc.
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PHASE 1 : definition ant-theft/ gathering data antitheft / product categories/ current situation
The same exercise has been done in the Belgian WG anti-theft.
Hot product categories to be focused on have been agreed upon and figures collected.




Grocery
(wine & spirits, chatka/salmon/truffles, confectionary, tobacco, drinks, meat, …)
Health & Beauty Care
(razor blades, cosmetics, sun protection, body care/face care/make –up, haircare/
colouring, perfumes & aftershave, …)
Home Entertainment
(CD/DVD/Film/books, digital cameras, GSM accessories, PC accessories, PC
software, batteries, play station, MP3, toys, ink cartridges & supplies, pet
accessories, photo paper, auto accessories, sport articles, kitchen accessories, …)
Clothing
(woman's underwear, sunglasses, jewellery, wallet/leader, woman's clothing,
sportswear, …)
© 2005 BearingPoint, Inc.
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PHASE 1 : definition ant-theft/ gathering data antitheft / current situation
What consensus and/or
proposals have already been
made?
DIY sector in Belgium and
France opted for the E.M.
technology as a standard for
anti-theft source protection
BDA has published a charter
for the sector
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PHASE 1 : definition ant-theft/ gathering data antitheft / current situation
FEDIS has drafted a proposal… pure Belgian proposal still to be
completed and approved.
PROTOCOLE PROTECTION A LA SOURCE
CONTENU
I. GENERAL
II. OBJECTIF
III. DEFINITIONS
IV. CHOIX DE LA TECHNOLOGIE
V. POLITIQUE PROTECTION A LA SOURCE
VI. EXIGENCES
VII. ECHANGE DE DONNEES
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PHASE 1 : definition ant-theft/ gathering data antitheft / current situation
Vol à l’étalage : impact financier annuel le plus important.
Proposition d’usage d’un système EAS. De préférence des éléments de protection
invisibles
Objectif :
 communiquer à tous les acteurs la position des parties signataires concernant la
politique de la protection à la source + choix des technologies
 arrêter les règles lors de l’utilisation de cette solution
(responsabilité partagée entre distributeurs et fournisseurs)
Définitions :
 Application d’un élément de protection de manière intégrée et invisible sur ou dans l’article ou sur ou dans
l’emballage par le producteur ou l’emballeur avant que l’article ne parvienne dans le centre de distribution des
points de vente
 Technologie RF : élément de protection RF qui réagit à un signal à radiofréquence, émis et reçu par une
antenne, à moins qu’il ne soit désactivé
 Autres technologies:
•
•
EM (électromagnétique)
AM (acoustique magnétique)
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PHASE 1 : definition ant-theft/ gathering data antitheft / current situation
Choix de la technologie :
 La technologie de protection à fréquence radio de 8.2 Mhz choisie en raison de
•
•
•
bon rapport coût-efficacité
application simple dans différentes chaînes de production
la radiofréquence s’impose comme la technologie majoritaire dans les magasins en Belgique
Exigences
 Eléments de protection utilisées doivent pourvoir être désactivés et ne pourront être réactivés
 Fournisseur devra fournir une fiche de renseignements (localisation)
 Éléments de protection à signal RF de 8.2 Mhr +/-5%
 Fournisseurs/producteurs ont le choix du fournisseur des éléments de protection
 Magasins équipés d’antennes de détection doivent être simultanément équipés de systèmes de désactivation
…
DANTE Consulting
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PHASE 2 : Evaluate technical solutions
I. Comparing different anti-theft solutions
Expectations of consumers (study CARREFOUR GROUP – GFK)
II. Source Tagging : different technologies on the market :

EM

AM

RF

(RFID/EPC with EAS functionality in the future)
IIV. Functionalities / SW analysis of each technology
IV. Usage of EAS technologies in the market (national/European/international level)
V. Evaluation of implications for implementation (technical issues, process
changes, integration of captured information, public issues, cost & benefits
sharing, ...)
© 2005 BearingPoint, Inc.
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PHASE 2 : Evaluation technical solutions
I. comparing anti-theft solutions
Example of Anti-Theft Measures and Solutions in Use
Cash protection equipment, safes, caches (84%)
Intruder alarm systems (84%)
Live closed circuit televistion (77%)
Mystery shoppers (74%)
Electronic Article Surveillance equipment (EAS) (71%)
Employee integrity checks (71%)
Plain clothes store detectives (71%)
Safer cases or protector boxes (71%)
Automated store stock ordering system (68%)
Random till checks (68%)
Checking stock deliveries at the store (at SKU level) (65%)
Regular counts on vulnerable lines (65%)
Staff searches (65%)
Analysis of EPOS data/ data mining (61%)
Stock loss database (61%)
Uniformed security goards (61%)
External security measures shutters, bollards, fences (58%)
Unique PIN numbers for till operators (58%)
Dummy closed circuit television (55%)
Process review team (55%)
Specialist display equipment (fixed) (48%)
EPOS/CCTV linkage software (45%)
Dummy cards/Empty boxes on display (39%)
GPS on delivery lorries (32%)
Full time stock loss analysis (26%)
© 2005 BearingPoint, Inc.
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PHASE 2 : Evaluation technical solutions
I. comparing anti-theft solutions
European consumers expectations on anti-theft solutions
(study CARREFOUR GROUP – GFK)
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PHASE 2 : Evaluate technical solutions
I. comparing anti-theft solutions
The ideal anti-theft solution ‘Musts’ for European Consumers
Accessibility
& Non
Damaging
System are
equally
important
for Clothes &
Sport Shoes
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PHASE 2 : Evaluate technical solutions
I. comparing anti-theft solutions
Anti-theft solutions do prevent purchase in some cases
Base : All countries
When being asked about protection systems if they ever prevent them from buying a
product, Europeans gave us positive answers regarding:
• 72% for Cosmetics in Closed-Window Shelf
• 61% for Spirits in Closed-Window Shelf
• 48% for Mobile Phones, in Closed-Window Shelf
• 41% for Cosmetics with Plastic Safer
• 15% for Clothes with Hard Tag
• 12% for Spirits with Locker
As a matter of fact, Germans, French and English are particularly intolerant to closed
window shelves.
* Could this protection system prevent you from buying the product…? (On 5 pts scale  Top 2
Boxes Scores (total of respondents answering ‘all the time’ and ‘most of the time’’)
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PHASE 2 : Evaluate technical solutions
I. comparing anti-theft solutions
Conclusions
• Consumers do have expectations on Protection Systems, these expectations
being, in some cases, fundamental and acting as purchase facilitators or barriers.
• The most important dimensions an Anti-Theft Solution must deliver against are:
• ACCESSIBILITY: Key dimension for all category of goods
• NOT DAMAGING: Particularly determining on Textile and Shoes
• NOT TIME WASTING: Especially true for Clothes, Cosmetics & Spirits
purchases
• From a consumer point of view, the protection system is integrated in the mix, as an
extension of the packaging. Just like any other part of the pack, it impacts consumers
perception of the product.
=> For all these reasons, Invisible Protection Systems, such as Source Tagging,
should definitely be prioritized, being only perceived positively by consumers.
© 2005 BearingPoint, Inc.
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PHASE 2 : Evaluate technical solutions
II. Source tagging : different technologies on the
market
The EAS technologies on the market today are the following

RF works at 8,2 MHz Radiofrequency signal
 Frequency variation is between 7,2 – 9,0 MHz
 Other frequencies exist but disappear
 8,2 MHz is the worldwide standard for source tagging in RF

EM works with a low frequency electromagnetic field signal
 Frequency variation between 5 – 12,5 KHz
 Different types of EM technology co - exist which are not fully compatible

AM works with an electromagnetic field signal at 58 KHz .
 Based on principle of causing vibration of two metal plates inside the target (called magneto strictive
effect and which is picked up ‘ acoustically’ )
 Frequency variation is very small
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PHASE 2 : Evaluate technical solutions
II. Functionalities/ SW analysis of each technology
Performance of main EAS technologies per key criteria
Technologies
Labels
Aisle Width
Detection Integrity Deactivation Total
AM
3
5
4
3
15
EM (Harmonic)
EM (Barkhausen)
EM (Intermodulation)
2
3
5
2
2
3
2
3
4
1
1
2
7
9
14
RF (Swept)
RF (P/L)
4
4
3
4
3
4
4
5
14
17
=> Source tagging: fast & reliable deactivation is key
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PHASE 2 : Evaluate technical solutions
IV. Usage of EAS technologies in the market
Major market shifts in EAS technology since 2005. Who has recently
chosen for NDRF and why?

Carrefour: all hypermarkets go NDRF (globally)
 Source tagging program

Metro Group global (C&C, Real , Media Markt): decision taken to go NDRF
 Source tagging & migration path to RFID

AHOLD: (Albert Heyn, HyperNova, AHOLD USA etc) NDRF
 Deactivation reliability & source tagging

Tesco in Asia goes NDRF
 Deactivation reliability & source tagging

Auchan, CORA: go bitechnology RF – EM due to:
 Alignment with source tagging in RF + small items tagging at store level in EM

Delhaize Group has also chosen RF
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PHASE 2 : Evaluate technical solutions
IV. Usage of EAS technologies in the market
Survey in Belgium by Fedis in Sept 2006
In total, 34 respondants (cross sector)

6 companies with source tagging in use already
• Sport, Brico, Electro, Food (C4, DLL, Metro)

23 companies with source tagging in the future
• 4 companies foresee source tagging on all products
(Brico, Electro, Textile, Computer)
• 8 companies do not foresee explicitly source tagging in the future
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PHASE 2 : Evaluate technical solutions
IV. Usage of EAS technologies in the market
Survey in Belgium by Fedis in Sept 2006
Technology long term

RFID : electro, computer, food
Current technology choice = 23

RF : shoes, textile, food (C4, DLL, Metro, Match) > 10

EM : brico, sport, books, textile, computer > 8

AM : electro, garden, textile, perfume > 5
Future technology choice = 23

RF : shoes, textile, perfume, electro, food (C4, DLL, Metro, Match) > 14

EM : brico, sport, books, textile, computer > 6 (2 to RF)

AM : electro, garden, textile > 3 (2 to RF)
© 2005 BearingPoint, Inc.
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PHASE 2 : Evaluate technical solutions
V. Evaluation of implications for implementation

EAS does not solve everything:
Like all good technology it depends on:
 Reliability of the equipment
 Consistency in your processes and the 20 / 80 rule (ECR: sell more, lose less)
 A balanced combination between
• automated processes ( like source tagging )
• human interaction (understanding how it works, alertness, deterrence) and
enforcement (compliance and vigilance when alarming)
 Labour cost management
• Low operation costs
• Maximizing people’s efficiency

EAS is not a stand alone solution, implementation procedures need to be taken
into account to make it a real success.
But using EAS in a right way can make a big € difference !
© 2005 BearingPoint, Inc.
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PHASE 2 : Evaluate technical solutions
VI. Cost Benefits Analysis/Benefits Sharing
• Costs
• 15 to 45 € per 1.000 tags
• 30.000 € for an applicator (20.000 labels/min) if no use yet for promotions
• Blisters or adaptations of packaging but depending on technology, information needs,
marketing
• Benefits WIN-WIN-WIN
• Retailer: no manual handling, less theft
• Supplier: less out of stocks, better (open) merchandising and visibility
• Consumer: less out of stocks, better merchandising and visibility, better availability
(less waiting)
• General: open merchandising = 30% sales increase (pilots USA)
• Cost sharing on the basis of 50/50 between retailer and supplier since both win
or invoicing of additional cost (cfr Scandinavian model)
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Next Steps
PHASE 3: Pilot and measure
• Share information (Fedis, ECR database?) at a detailed level and focus on a very limited
number of hot items per Product Category that really cause the problem
•Alcohol:
•Johnny Walker 75cl red label, J&B 75cl, Gordon Gin 75cl, Smirnoff 75cl
white, Bacardi 75cl white, Laurent Perrier 75cl brut
•L’Oreal:
• top 5 products
•Gillette:
• top 5 products
•Duracell and Energizer:
• AA batteries
•DIM
•Cartridges HP
•DVDs:
• top 10 sellers for the moment and their loss percentages
• Set up a pilot between 1 retailer - 1 supplier for an item that is in closed merchandising
• Set up a pilot between 1 retailer - 1 supplier for an item that is not source tagged but in
open merchandising
• Measure results and describe procedures, Best Practices
© 2005 BearingPoint, Inc.
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Next Steps
PHASE 4: Deployment
• Design the Roadmap:
• technology,
• list products,
• timeframe,
• cost/benefits,
• procedures,
• international standards
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Questions & Answers
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