Retail Security Camelot music stores at top of retail charts for security measures

Nov 1, 1998 12:00 PM, WILL POLLOCK

To prevent shrinkage, the $600 million retailer uses EAS, keeper boxes and point-of-sale exception reporting software. Today's retailers use security practices and systems as sophisticated as the selling environment they protect. At Camelot Music stores, for example, point-of-sale accounting software, electronic article surveillance, compact disc (CD) and cassette keeper boxes, and advanced door lock systems have established the company near the top of the music retail security charts, despite the challenge of protecting $600 million in annual sales from 496 stores spread over 37 states and Puerto Rico.

Where shrinkage is an exception According to Jerry Dolan, Camelot loss prevention manager, a key security issue is internal loss prevention. Employee theft accounts for nearly 60 percent of inventory shrinkage in a given year. To combat the problem, the company uses ICL POS Exception Reporting software from Dallas-based ICL Retail Systems. "There is access to cash at our registers, and register fraud can really hurt us," he says. "Exception reporting technology helps us combat register fraud because it gives us information on what is going on at our registers." Camelot Music's corporate-level and regional loss prevention representatives use exception reporting software to review register transactions from a remote PC. The software allows the company to poll and rank store cashiers by company, region and district on refund, void, post-void and no-sale transactions. One internal-theft concern is associates who allow individuals to walk out of the store with products. To prevent this, the company clearly explains its exception reporting software technology when training associates. "If we do not advertise the fact that we have exception reporting in place, all we will do is catch people in the act. If our employees do not know it's there, it's not going to provide the best possible deterrent," says Dolan.

Establishing regular product cycle counts While point-of-sale software tracks company-wide sales transactions, Camelot Music also can use the technology to keep track of inventory. On average, a Camelot Music store has in its library nearly 30,000 compact discs and 15, 000 cassettes for its customers to choose from. Protecting the product pool is of utmost concern. According to Dolan, regular product cycle counts allow the company, from management to sales associates, to keep sharp tabs on product needs. "We count different areas of the store to determine if all the needed quantities are in the store," he says. "While cycle counts help us replenish product correctly, it also helps us flag unusual activity that may be going on in the store. "We do physical counts in the store and enter them into the back office system, and then we are able to retrieve that data when we poll the stores at night," he continues, stressing the system's checks-and-balances benefits. "We download a list to the stores of what is to be counted, or the stores can request a certain piece of product to be counted."

Double protection Cassettes, CDs and DVDs are protected from theft by two means: plastic keeper boxes designed by North Canton, Ohio-based Alpha Enterprises, and the Ultra*Max EAS system from Sensormatic, Boca Raton, Fla. Active EAS tags are applied to the keeper boxes by the retailer; if an individual leaves a store with an activated item, the act will be caught by the store's electronic article surveillance devices at the door. Dolan calls EAS the most important facet of store security, but he says the keeper box technology has a downside. "The keeper boxes are not free, and they take up space in our racks that could be used to display more product," he says. Camelot Music keeps all of its products under a specialized lock and key manufactured by Medeco. Dolan says the Medeco lock system saves the company expense, while at the same time preventing excessive store access. Further, he notes that the company uses video surveillance as a crime deterrent and as a tool to protect its associates, products and stores from the threat of armed robbery.

Snags associated with source tagging A significant security development for the retail industry is on the horizon, according to Dolan - EAS tagging by the product manufacturer. Dolan says the need for keeper boxes at the retail level will be eliminated if EAS tagging is integrated with the product manufacturing process. In that scenario - which, he notes, retailers have discussed since 1985 - a source tag would be affixed directly to the product casing rather than integrated with a third-party keeper box. The process could be officially adopted sometime next year, if a key stumbling block can be overcome. Music retailers have different types of EAS systems, explains Dolan, but the agreed-upon tag would work with only one type of system, necessitating some retailers invest in equipment to detect the tag. "We have put together a position statement on how we feel source tagging should be handled," says Dolan, adding that the technology need not be limited to compact discs or cassettes. "We would like to see a warning sticker placed on all products, preferably on the front of the packaging, that would state, 'protected against shoplifting.' " The critical factor with source tagging, however, is likely to be how the costs of the program are passed on to retailers. Dolan says if manufacturer-based electronic tagging passes too much cost onto retailers, the effort may not be worth the trouble. CDs are already a low-margin product, he notes.

Ongoing information analysis is key For the future, Dolan says Camelot Music will enhance and upgrade an already full security technology playlist with more detailed reporting and information analyses. "We want to have continuous tracking of the number of shoplifting incidents and the dollars we lose, so we can look at it on an ongoing basis to determine where the problems exist," he says. "When you have 500 stores that are guarded by a well-maintained reporting system, the bad areas and problem stores will stick out like sore thumbs." Dolan stresses a continuing need to harness data with sophisticated systems. "Information is a key issue, no doubt about it," he says, adding that reporting shrinkage by category and/or music genre could take theft reporting to a new level. "Then we can ask the question, 'Is the theft coming out of the CD area, and if so, what genres of music are stolen most frequently?' We want to get better recording of shrink by category to pinpoint where we are getting hit the most." Although Dolan foresees more security challenges, he notes that further maturing of the technology will allow retailers to keep the music playing - in and out of the stores.

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