INNOVATION REDUCES THEFT OF HIGH VALUE ITEMS IN STORES
TWO Cape Town born and bred entrepreneurs are piloting a new way of shopping in Joburg – that could soon be used to stop baby powder being stolen from Australian supermarkets and illegally exported to China.
The Auto-Aisle, the brain child of Vincent Lanz is currently under trial at a SuperSpar in Boksburg, east of Johannesburg, after the first version was successfully piloted at the Pick n Pay in Woodmead north of Johannesburg. It has already been integrated and approved for roll out across Pick n Pay stores.
The Auto Aisle is a bid, says Lanz, to help both the shopper and the storeowner, by taking away the risk associated with stocking high risk, high value items. Traditionally items such as razor blades, women’s creams and condoms have been ghettoised at cigarette kiosks away from the tills, to prevent stock loss and shoplifting. The downside, apart from the inconvenience of having to queue a second time to buy them and the embarrassment for some people to ask for specific types of condoms, has been a drop in sales followed by the shopkeepers further slashing the variety of stock they hold.
With this innovation, the kiosk returns to the middle of the store in one of the aisles in fact. Shoppers choose the items they want, print out a voucher, which they then pay for at the till. As they leave the shop, they pass by a special dispenser where their high value items are directly dispatched to them. The results since the pilot scheme went live at the end of last year have been dramatic, says Jansen van Rensburg.
“This store should stock 40 different kinds of razor blades. When we started, they had nine. Gillette as the market leader should have 20 of the 40, but they only had two. Now remember this is a company that made the billion-dollar blade; spending US $750-million to develop it and US $ 250-million to market it. Between their staff in this country, the whole of Spar and Proctor & Gamble, which distribute them, they could only manage to stock two different kinds of blades in this store.”
Since the beginning of the pilot project, the store’s turnover on razor blades had increased by 45% – with zero shrinkage. It now stocks the correct range of items too. The problem, says Lanz, is not just stock theft but the total dearth of technology in retail.
“Only using loss prevention measures to increase sales is like rinse and repeat – and it fails every time.”
Agriculture, he says, is light years ahead of retail when it comes to the use of technology.
“You have fields with probes which tell you exactly how much moisture there is and show you where to water and when, or to fertilize. In retail, you’re working off merchandiser’s reports which are still done by hand, the shelves are packed by hand and the merchandising staff don’t even work for you – plus there’s a lag in the information you receive, so running out of stock is very real possibility.”
With this technology, the stock control is real time allowing for stock to be replenished dynamically and immediately, something that has already slashed the average Brand’s Stock Out by 60%.
The problem with high value stock for supermarket owners, especially smaller operators in outlying areas, is weighing up the risk of having the stock and it either not being sold or being stolen versus not having the stock and then forcing customers to shop elsewhere. The anti-theft tags that are on so many items today, are only on the items in the front of the shop, not in Receiving or in the Stock Holding Area. In fact, says Lanz, they’re just window dressing because the real theft is happening elsewhere either in the back or en-route
“The shopkeepers are having their lunch eaten by Clicks and Dischem who only focus on healthcare, beauty products, hygiene, medicine, sexual health and some associated brands,” says Lanz. “A shop like this one carries 25 000 different stock items from food to healthcare, but if it doesn’t hold a particular brand of baby formula, that young mother will not just go elsewhere for her formula, she won’t come to this shop at all. That’s the problem all the retailers face – made all the worse when the net profit on a R300 1.8Kg tin of formula is only R18 for the shopkeeper.”
The development of the Auto Aisle traces its genesis to the tobacco industry, and the need not just for stand alone, remote sales kiosks in pubs and clubs, but – thanks to their experience in New Zealand – having to be able to remotely control the pricing – from South Africa – to each of the units in North and South Island each time the government increased the excise duties on tobacco, otherwise the landlords where these kiosks were placed would be fined if they weren’t selling at the correct price.
South African developed and designed, from the hardware to the software, Auto Aisle has now caught the attention of Australian retailers, with one of the supermarket groups in the country approaching Lanz and Jansen van Rensburg to discuss the solution to curb the epidemic they face of having milk formula stolen only to be shipped, illegally, to China and resold.
South Africa faces exactly the same problem, especially with razor blades.
“Go down to a flea market at the weekend,” says Lanz, “if you find a packet of razor blades still in the original condition, without smoke or water damage, that would normally sell in-store for R300 but you can buy them for R100, you have to know they’ve been stolen somewhere and are now being resold.
“It’s so bad, one of the retailers came up to me and asked if he shouldn’t actually buy from the flea markets and resell them in his shop – and he wasn’t joking,” says Lanz.
The new technology removes that threat and lets the shopper buy items that are always in full view and always in stock.
“We’re like the AMG of Mercedes Benz,” quips Jansen van Rensburg, “we’re taking what already exists and just making it so much better so that ultimately it doesn’t matter whether you’re shopping in Cape Town or Calvinia, you’ll be able to buy the same items when you walk into the store.”
(bold dot) To find out more, go to www.quattromanagementsystems.com