Leverage RFID for Loss Prevention

3 Reasons Why Apparel and Fashion Retailers Should Replace Their Security Hard Tags with Data

July 1 2021

The security hard tag has been a helpful ally to apparel and fashion retailers in deterring theft. The mere fact that a hard, plastic tag was attached to an item, made stealing merchandise not quite worth it. After all, even if you managed to get away with a stolen item through blaring security gates, the item was pretty much useless as you couldn’t detach the security tag without damaging the item.

But just as most of the items that the hard tag gets attached to, the hard tag is slowly going out of fashion as well.  

What has caused us to say goodbye to our little plastic ally? And what will protect your merchandise going forward instead?

Let’s dive into the three main reasons that are causing retailers to reconsider the need for hard tags.  

1. Offering seamless checkouts

Nowadays, shoppers expect more when it comes to visiting a physical store. Especially the people born between the late 90s and early 2000s (‘generation Z’), are looking for more physical ways to engage with people and brands. So far that is good news for retailers, but there’s one catch: having grown up in the era of ‘instant gratification, these shoppers are also the most impatient when it comes to the in-store experience. That means retailers not only need to have the right merchandise available, but also need to offer seamless ways to checkout.

This is why retailers are coming up with new ways to mirror their in-store experience with their digital one. Instead of losing customers when there’s a long queue, retailers introduce new forms of check-out, such as fixed self-checkout stations, mobile self-checkouts or store associates armed with mobile checkout devices.

Security hard tags are a physical barrier that potentially could ruin a seamless checkout. Having shoppers detach an EAS hard tag themselves at the checkout creates dangerous situations, as the sharp needle of the security tag is a high risk when it comes to injuries. That is a risk that retailers are not willing to take. But abandoning the security hard tag altogether in order to offer self-checkouts: that’s not a trade-off retailers want to make either, as they don’t know the impact this decision will have on their shrinkage.

2. Enhancing omnichannel processes

As more and more retailers embrace an omnichannel sales strategy, they realize that hard tags create quite some hiccups in their retail processes. Think about all the steps involved in an omnichannel operation: shipping items from store to customers, shipping items in between stores for curbside pick-ups or allowing items to be reserved for customers, just to name a few.

The attachment and detachment of a hard tag is a bottleneck in all these retail workflows. This goes against the whole principle of an omnichannel strategy: having a solid process in place to offer a seamless shopping experience across every channel.

3. The True Cost of Hard Tags

Without accurate inventory and shrinkage data, it’s hard to decide which items are popular amongst dishonest shoppers or which are just inventory management discrepancies.   

This leads to some retailers thinking ‘better safe, than sorry' and tagging the bulk of their inventory.

But the actual investment in the hard tags is just one piece of the true cost of hard tags. As we discussed before, hard tags need to be placed on an item, and the security tag also needs to be removed when an item is sold. These are manual processes, the costs of which can’t be underestimated. For a retailer that sells 100 million items a year and tags 80% of it, the time spent on attaching hard tags alone amounts up to more than 300,000 manhours a year!

Learn how To Replace Hard Tags with Data

In the back of their mind, many retailers know that they should proactively deal with the impact that the hard tag is having on their business. Besides the (hidden) cost of the security hard tag and the manual labor, it also prevents retailers from creating new and better shopping experiences.

But understandably, any conversation about decreasing the number of hard tags is met with hesitancy: retailers just don’t know what the impact will be on their shrinkage levels.

Of course, ruthlessly ditching hard tags is ill-advised. But there is a way to handle the hard tag dilemma.

The technological foundation of a seamless, omnichannel shopping experience is RFID technology. And luckily, that’s the same technology that allows for a data-driven loss prevention strategy. When retailers choose to implement RFID, it is common for them to tag their whole inventory with RFID labels. This means that your whole inventory is trackable, and thus protected. 

Retailers who know which items are leaving their stores unpaid  - thanks to RFID -  can find theft patterns and detect items that get stolen in a way that they would otherwise have never known.

This data leads to a smarter hard tag decision: protecting the items that need it the most. Retailers can even go so far as to decide that they abandon the hard tag completely; as the pros (seamless checkouts, more productive manhours) greatly compensate for the cons (risks of higher shrinkage).

How Nedap helps retailers progress toward data-driven loss prevention

As the business case around RFID progresses towards loss prevention, retailers are more and more able to make data-driven decisions in their loss prevention operations. Luckily, retailers are not alone when it comes to expanding their RFID usage to loss prevention. At Nedap, we’ve helped global retailers progress to make the most out of RFID for their loss prevention. Always taking into account their current investment, we combine current RF technologies with RFID in our EAS solutions and hard tags. This enables retailers to upgrade their estate towards RFID in a controllable way.

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