New market opportunities for electronic article surveillance

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As the 2008 Beijing Olympics rapidly approach, retailers in China are considering many different factors to keep up with growing consumer demand.

The Chinese retail market grew to an unprecedented $1.18 trillion in 2007, as over 15,000 new stores opened in order to accommodate the high level of consumers anticipated during the 2008 Olympic Games as well as the 2010 Shanghai Expo.

Recently, Frost & Sullivan completed a major market study for Sensormatic that identified the need for electronic article surveillance (EAS) solutions in China.  In order to gain further insight into the Chinese retail and EAS markets, the study explored retailers pain points, along with their loss prevention and operational needs in various retail segments.

Currently, the retail industry in China is thriving and it expects to have growth rates well over 11.0 percent from 2008 to 2012. Because of this rapidly growing market, retailers are looking for effective and innovative loss prevention methods. This study found that employee theft caused 42.2 percent of the loss in the Chinese retail market and another 29.4 percent was from shoplifters, which remains the second largest source of inventory loss.

The high percentage of losses from employee theft and shoplifters drives the increased usage of EAS systems in the market, notes Frost & Sullivan Industry Analyst David Ren. Because the domestic market is just in the infancy stage of its life cycle, the potential for growth is great and the opportunity exists for Sensormatic to educate the market and build brand loyalty.

In addition, the study found that at 72.0 percent, EAS ranks as the second most deployed loss prevention technology and is gradually increasing as companies begin to use both CCTV and EAS to improve their profitability. Despite these positive trends, the low labor cost to hire more employees for LP, traditional counter-sales model and retailers limited budgets for LP are some of the factors affecting the growth of the EAS market, states Ren.

Sensormatic Offers Innovative EAS Solutions in China

Sensormatic, part of Tyco International, is the industry leading provider of vital retail loss prevention solutions. Backed by more than 1,500 patents, Sensormatic anti-theft systems are engineered for superior detection and deactivation performance, durability and ease-of-use. To accommodate all retail footprints, Sensormatic EAS systems are designed to help retailers boost sales and protect profits by increasing open merchandising opportunities while reducing shoplifting and internal theft.

In a growing retail market like China where the technology to protect revenue and enhance profitability is essential, Sensormatics integrated solutions help retailers safeguard their inventories  and  deliver  actionable  information  to   better manage  daily  operations, simplify  decision  making,  enhance  customer  experience  and ultimately  improve  retail performance. Sensormatics solutions portfolio is sold through ADT and Tyco partners around the world.  Today,  80.0  percent  of  the  world's  top  200  retailers  that  use  EAS  rely  on Sensormatic  EAS,  Source  Tagging  and  Data  Analytics  to  keep  their  losses  lower    and profits  higher.  For more information or to download a summary of the Frost & Sullivan study please visit www.sensormatic.com.

According to Stanley Kong, vice president of Retail Sales and Services for ADT Asia, Retailers worldwide, and particularly in China, are recognizing that as their businesses expand so does shrink.  To combat this growing trend, many retailers are relying on the superior performance and value of Sensormatic EAS solutions to improve their operations. In addition to protecting retailers bottom lines, Sensormatic solutions provide an enhanced shopping environment with greater access to more openly displayed merchandise.  Kong adds, With its global market leadership position, Sensormatic EAS solutions offer best in class technology that helps retailers reduce shrink and improve profits to deliver a solid return on investment.

Frost & Sullivan Chairman David Frigstad believes that as more and more companies look abroad for growth opportunities, the business intelligence that Frost & Sullivan offers can help Sensormatic further understand the Chinese retail and EAS markets current and emerging trends and will serve as a basis for future product development and marketing efforts, targeted specifically for the Chinese EAS market.

Frost & Sullivan, the Global Growth Consulting Company, partners with clients to accelerate their growth. The company's Growth Partnership Services, Growth Consulting and Career Best Practices empower clients to create a growth focused culture that generates, evaluates and implements effective growth strategies. Frost & Sullivan employs over 45 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from more than 30 offices on six continents. For more information about Frost & Sullivans Growth Partnerships, visit www.frost.com.