Retail industry’s strategy to reduce “comprehensive loss” and purchase EAS system
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The competition faced by China’s commercial retail enterprises (hereinafter referred to as the retail industry) has become increasingly fierce, and the level of competition has gradually entered from scale competition and price competition to management competition and strategic competition. As one of the key elements that seriously affect the competitiveness of retailers, cost control and loss control—that is, how to reasonably combine management and technical methods to reduce the management cost and “comprehensive loss” of the enterprise as much as possible The minimum has become an important issue facing the retail industry.
“Comprehensive loss” in the retail industry
For the retail industry, in addition to the natural loss of physical objects, the loss caused by malfeasance, theft, slack, and mistakes, there are also various intangible losses. What is concerned is that there is more or less a contradiction relationship between the various factors in these two types of losses. If this contradiction relationship is not recognized correctly, it will be In the actual loss control and management work, the effect of “the opposite of each other” is produced.
For example, when we have too high requirements to minimize the loss rate of goods, we “prefer to kill mistakes rather than let go” for every customer and internal staff, and subconsciously regard every customer as a potential “thief” “, strict requirements on every employee, and even body search at any time, then on the surface it can indeed quickly reduce the loss of goods caused by various factors such as theft, malfeasance, etc., but the accompanying side effects may bring more to the company. Serious and huge losses. These side effects mainly include: litigation financial compensation, a large number of negative media reports, loss of goodwill, loss of customers, and malicious retaliation by employees.
For another example, in order to improve the work efficiency of employees and reduce the loss of working time, the strict management of employees seems to increase the effective working time of employees, but in fact, the extent of the reduction of employee work efficiency in this state is large. The strength of revenge is unimaginable! In order to retaliate against its harsh management system, a well-known computer company in the United States put all kinds of trash into the computer box. A customer who bought the computer of this brand found that there was a boot in the box after opening the box. !
From these two examples, you should be able to see clearly that it is not possible to correctly recognize the internal connection between various losses, and how much the cost may be incurred by blindly reducing one or several losses! Therefore, the retail industry should strive to minimize the “comprehensive loss”-the combination of explicit and implicit losses and risks caused by various non-promotional subjective and objective factors.
How to effectively reduce “comprehensive loss”
As shown in Figure 1 and Figure 2, we selected six important indicators for loss prevention in the retail industry: goodwill, performance, customers, management costs, product losses, and management losses, and performed changes to them under certain assumptions. Description, as a standard to measure and determine the overall loss. Figure 1 describes the relationship between the change in commodity loss/management loss and the other four indicators; Figure 2 describes the changes in the other five standards with the reduction of commodity loss as the reference amount.
In order to determine the range of “comprehensive losses” that an enterprise can accept, at least one indicator for each direction of change should be selected from the six indicators, and these two indicators are the most important for the current situation of the enterprise. For example: For a retail industry, the loss of goods should be reduced as much as possible, and he is also most concerned about the impact on performance, then he can choose the two indicators of “commodity loss” and “performance” that change in opposite directions. Determine the range of “comprehensive losses” he can accept (refer to Figure 3).
The relationship between choosing EAS and reducing the company’s “comprehensive loss”
In order to reduce its own “comprehensive loss” and enhance its competitiveness and ability to withstand risks, the retail industry must combine advanced and applicable management methods with technical methods for comprehensive application. Among the technical means, one of the most important technical means for the retail industry is the EAS commodity loss prevention system (hereinafter referred to as EAS).
Regardless of whether it is a commodity retailer or an EAS supplier, EAS is generally regarded as merely a product loss prevention system consisting of an antenna system, a decoding/unlocking system and various tags. But in fact, the means of preventing damage to goods can be divided into two types: technical defense and civil defense, and technical defense includes EAS, video surveillance, anti-theft alarm and other methods. From a management point of view, various air defense and technical defense methods should be combined to achieve the best effect of product damage prevention.
When applying EAS, it is necessary to pay more attention to the application method, so that it can not only integrate with other civil air defense and technical defense methods, reduce the loss of goods to a reasonable range, but also help reduce the “comprehensive loss” of the enterprise.
How to choose EAS commodity loss prevention system
The retail industry should pay attention to the following five aspects when choosing an EAS product loss prevention system:
1. What kind of EAS technology to choose
At present, there are three mainstream EAS technologies on the market, namely electromagnetic (EM) technology, acousto-magnetic (AM) technology and radio frequency (RF) technology.
It can be seen from Table 1 that for supermarkets, brand stores and other stores with more interference sources, it is not suitable to apply electromagnetic (EM) technology to EAS. Whether to choose AM technology or EAS with radio frequency (RF) technology requires specific treatment. However, based on the analysis of the commercial retail industry, the author believes that the best choice should be the EAS of radio frequency (RF) technology. The tyrants will be making great efforts in China. The local retail industry in China needs to compete with them mainly in management and cost control. And the super-large retail group led by Wal-Mart has already launched the “Source Labeling Program” in the United States and other places. At present, several major American suppliers of Wal-Mart have begun to implement the source label strategy for Wal-Mart’s products—sticking on the products. A radio frequency (RF) tag with both wireless product identification and anti-theft functions. This can save a lot of costs for Wal-Mart’s procurement and logistics links, and its competitive cost advantage has become more prominent.
Based on this, we can clearly estimate the market situation in 3 to 5 years. At that time, China’s local retail industry will have to require its suppliers to provide comprehensive “source label” products to reduce their procurement and logistics costs. If today we cannot fully realize the importance of “source tags”, and cannot purchase and apply the radio frequency (RF) technology EAS system with smooth transition conditions as early as possible, then it will leave serious hidden dangers to future competition .
2. Which form of EAS to choose
At present, the EAS provided by EAS suppliers in China (including foreign brands) are basically only antenna systems, and what the suppliers emphasize is just how sensitive their EAS identification tags are. However, as far as the author knows, this situation is undergoing a gratifying change. Some internationally renowned brands have begun to promote brand-new product loss prevention concepts and systems in China.
At the two brand EAS system conferences, the author has learned the powerful functions of these two systems, including: online real-time monitoring of information and video monitoring linkage alarm function, various related data collection and storage functions, and various data collection and storage functions. Correlation function, data report function, data analysis function and so on. In other words, the system not only collects various alarm events, decoding events, hard tag usage, customer traffic, POS transactions, metal detection and other data, but also provides managers with various data related reports, and even intelligent Analysis function!
3. Which brand of EAS to choose
At present, there are many product brands on the Chinese EAS market, but they are mainly divided into four categories. One is internationally renowned brands, such as Checkpoint, Sensormatic, ARTSYS, NEDAP, etc. ; One category is local well-known brands, such as Promatic and E-Guard; the other category is domestic assembly brands under the banner of import; the last category is unlicensed, fake, and counterfeit low-end brands Brand (to be precise, there is no brand).
The author believes that, from a macro point of view, commercial retail enterprises with a little ability should at least choose the first two types of brands, although many fourth type “brands” are used in the retail industry under the banner of good performance and low prices. Talk, but are retailers really willing to take the risk that the quality is not guaranteed, and there may be no service at all to buy such EAS?
4. Technology improvement and service capabilities
Whether an EAS brand can achieve continuous technological improvement and excellent pre-sales, in-sales and after-sales services should be the key to the retail industry’s decision to purchase behavior. No matter how well-known a brand is and how advanced the system it currently provides, as a purchaser, it should spend considerable energy to examine its ability to improve its technology and the quality of service provision.
Although this investigation is highly subjective, we can still put forward seven elements that need to be paid attention to for reference:
1. Whether the supplier of the brand has a long history;
2. Whether the supplier of the brand has a branch, office or technical service center in the user’s location or area;
3. Does the supplier of the brand possess professional technical R&D conditions, R&D teams and R&D institutions? For suppliers of imported brands, it is necessary to investigate whether it has a technical support center in China and whether it can quickly and effectively respond to market demand;
4. Whether the supplier of the brand has a complete pre-sale, in-sale and after-sales service team and system in its sales area;
5. Whether the supplier of the brand can respond objectively, effectively and quickly to the various requirements put forward by users;
6. Whether the supplier of the brand can provide various certifications and qualifications suitable for sales in this area;
7. Whether the supplier of this brand can provide a complete technical manual, installation manual, usage guide and training manual for its system.
Five, the cost-effectiveness of the selected reference material
After all the above questions have been answered positively, the retailer as the purchaser needs to make a strict comparison of its cost performance. The difficulty of this comparison is how to find an effective reference, that is, to compare with which brand and which model system.
The method of comparison is to adopt the “three-dimensional evaluation method”, and there should be at least three alternative systems participating in the evaluation. The basic methods are as follows:
1. Record the price of each alternative model in the table below;
2. For each alternative model, select a slightly lower performance system closest to the model within its brand, and a slightly higher performance system closest to the model, and record the prices of these three models In Table 2;
3. Calculate and fill in each item according to the requirements of the form, and finally draw a conclusion.
Using the above method, you can basically determine whether the cost performance of a certain brand and model system is the best among comparable objects, but there are two points worth noting in the comparison: First, how to choose the performance closest to the model of the same brand? The lower system and the slightly higher performance system closest to the model are a very critical step. This step requires that the two selected systems must be comparable and the performance closest to the alternative system; second, in the table Every calculation is signed, don’t make a mistake, otherwise the result will be wrong.
After the above five steps of selection and screening, it is believed that retailers will be able to select the EAS loss prevention antenna system that best meets their needs, and use it in combination with other management and technical methods to minimize the company’s “comprehensive” antenna system. loss”.
(The author of this article is currently a consultant of the Guangdong Branch of the Dutch Chamber of Commerce)
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