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Family Dollar Seeks Shrink Reduction With Checkpoint EAS

Comprehensive loss prevention strategies can help U.S. retailers combat the $54 billion they lose to shrink each year.

Family Dollar Stores, a discount chain with 8,000 locations throughout the U.S., is tackling shrink with the EVOLVE P10 ECO electronic article surveillance (EAS) solution from Checkpoint Systems. In addition to shrink reduction, the initiative is intended to improve in-stock positions and will pave the way for upstream RFID source tagging, according to Chris Nielsen, VP of Loss Prevention for Family Dollar.

“Shrink has always been a retail challenge, but today there are more organized retail crime groups than ever before,” said Nielsen in an interview with Retail TouchPoints. “We needed to give store managers a better solution for reducing shrink, driving sales and improving the customer experience. Down the road, the rollout also will allow Family Dollar to implement source tagging — specifically at the supplier and D.C. level ― further impacting our store team members. We are working with vendors and our buying department to facilitate this goal.”

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The Checkpoint EVOLVE shrink management system rollout is now underway at Family Dollar and targeted for completion by December 2014. “Company expectations are a significant reduction in shrink,” said Nielsen. The solution features data analytics, smart alarm management, reduced energy consumption and an upgrade path to RFID for improved on-shelf availability.

More merchants are recognizing the ease and value of deploying RFID for loss prevention: According to ABI Research, the market for RFID transponders, readers, software and services is predicted to generate $70.5 billion by the end of 2017.

When completed, the Checkpoint system will replace an acoustic magnetic EAS technology — now in place in 3,600 Family Dollar stores — with radio frequency technology throughout the chain. “There are a few aspects of RF we really like,” said Nielsen. “One is the ability to move tagging upstream, which will free our store-level staff to spend more time servicing customers. We can tag more items, reduce in-store shrink, and gain a better in-stock position, which improves the experience for customers as well as our employees. This is not just a loss prevention strategy but a sales generator tool that will impact the bottom-line and Family Dollar comp sales.”

In addition, Family Dollar brand information can be incorporated into each tag, Nielsen explained. “This allows the law enforcement community to pinpoint Family Dollar merchandise when recovered, which can’t be done with an acoustic magnetic system. In addition, with RF, we can transition our loss prevention strategy to RFID, if that’s the route we choose.”

Encouraged by the early success already experienced in Family Dollar test stores, said Nielsen, “I am confident that installing Checkpoint’s system in all of our locations will deliver an immediate impact on our profitability by reducing our shrink and increasing sales.”

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