A new, greener tagging technology that protects merchandise across its global supply chain has been taken up by supermarket chain Tesco.
CSTR is a new recyclable hard-tag ‘source’ tag attached at the point of manufacture rather than at store level to reduce losses across its expansive supply chain. Retail loss is traditionally focused at store level – shoplifters and dishonest staff – but because CSTR tags are attached during the manufacturing process, it is designed to reduce the loss of items in the supply chain where up to 28 per cent of stock goes missing.
Working with its suppliers and clothing manufacturers all over the world, Tesco has tasked Catalyst, the company that invented the recyclable hard-tag to establish strategic hubs close to the factories in Sri Lanka, Hungary, China, Vietnam, Turkey and Bangladesh. The scale of the operation is vast as Tesco works with 40 garment manufacturers in India alone.
Because of Tesco’s involvement, demand for the CSTR tag has rocketed among other UK High Street retailers impacted by the £4 billion worth of losses last year alone*
Catalyst has increased its turnover almost tenfold in the last five years from £850,000 when it launched in 2005 to a predicted £17m this year. Most of the staggering growth took place in the midst of the downturn between 2008 and the present day rising more than £10m in just two years.
Producing hundreds of millions of tags per year, Catalyst now works with some of Europe’s largest clothing brands.
In the case of one fashion retailer, the predicted figures reveal a staggering £22 million worth of savings:
•£12 million saving on labour costs – staff not having to tag in store – (a figure that has increased with the rises in the minimum wage)
•£4.2 million in additional sales from correct and consistent tagging – staff in stores seldom get it right!
•£1.5 million additional sales from more goods being available
•£2.8 million saved from staff loss involved in ‘back door’ theft
•£2.1 million saving through cutting supply chain losses because the hard tag provides a visual deterrent
•A dramatic reduction in land fill tax paid on discarded security tags
“These figures are based upon the retailer’s own calculations of their existing shrink so it gives a model of huge potential savings that are impressing not only the loss prevention teams, but the financial director and the board who all recognise that the reductions in shrink could be even greater,” says Paul Clarke, Managing Director of Catalyst.
“In addition we are investing in a strategic downstream location to co-ordinate the global tag recycling process which is in itself a huge growth and environmental story as most other tags currently end up in land fill costing the retailers dearly in terms of ‘pay as you throw’ tax,” he says.
