Between 2003 and 2007, organized retail formats (characterized as chain stores and stores that are subject to central ownership or franchisees) experienced a Compounded Annual Growth Rate (CAGR) of 19.5 percent. By 2012, the organized retail market expects to increase at a more aggressive rate, projected at 44 percent CAGR. This rapidly growing market is prompting retailers to look for effective and innovative loss prevention methods.
According to the study, shoplifting accounted for over 50 percent of loss in the Indian retail market, which remains the number one source of inventory loss. EAS is designed to help retailers prevent losses due to external theft - India's most significant challenge impacting retailer profitability and inhibiting future growth. Employee theft represented the second largest source of inventory loss at 20 percent.
"To help combat their greatest sources of loss due to shoplifting and employee theft retailers are relying on EAS solutions to help improve their bottom line," states Frost & Sullivan Sr. Research Analyst Archana Amarnath. "Since organized retail accounts for four percent of the total Indian retail market and is expected to increase to 15 percent by 2011, there is a huge potential for growth and an exciting opportunity for Sensormatic to educate the market and support retailers' loss prevention goals."
In addition, the study reveals that 45 percent of the retailers that currently use EAS rank it as the second most important technology, second only to POS, to deliver benefits like shrink reduction and increased profitability. The rising prevalence of hypermarkets and department stores, which stock large number of products, has made EAS a must-have technology to prevent pilferage. As more retailers become educated on the benefits of EAS technologies, we expect further investment in superior solutions with greater integration and data analytics capabilities.
"With the retail boom over the last three to four years there has been an influx of world-class malls and shopping centers," states Amarnath. "With a larger shopping area, multiple entrances, and an open counter format, it has become difficult to deter shoplifting activity - driving the need for EAS."
In a growing retail market like India, where the technology to protect revenue and enhance profitability is essential, Sensormatic's 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. Sensormatic Electronics Corporation, a Tyco International business, 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 any retail footprint, Sensormatic EAS systems are designed to help retailers boost sales and protect profits by increasing open merchandising opportunities while reducing shoplifting and internal theft.
According to Geoffrey Foo, manager of EAS and Retail Security, ADT, "With the organized retail market in India projected to grow 44 percent in the next five years, retailers understand that shrink also will increase exponentially. To protect their bottom line, retailers trust the superior performance and reliability of Sensormatic EAS solutions to improve their operations." Foo adds, "As a recognized global leader in loss prevention solutions, Sensormatic systems provide the innovation needed for this fast growing retail market, delivering a solid return on investment."
"More and more companies are looking for growth opportunities given the current challenges in the global retail environment," according to Frost & Sullivan Chairman David Frigstad. "The business intelligence and consulting expertise that Frost & Sullivan provides can help Sensormatic further understand current and emerging trends in the Indian retail and EAS markets. This knowledge will serve as a foundation for future product development and marketing efforts, targeted specifically for the Indian EAS market."
