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The Red Tag Experience in Australia

The Red Tag Experience in Australia. As at 1st December 2002. Agenda. Introduction to the Australian Market How Red Tag was selected Retailer issues The time line challenge Studio and Replication issues Retailer uptake Results to date. Introduction to the Australian Market.

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The Red Tag Experience in Australia

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  1. The Red Tag Experience in Australia As at 1st December 2002 Jack Hayes- Consulting in risk and loss prevention

  2. Agenda • Introduction to the Australian Market • How Red Tag was selected • Retailer issues • The time line challenge • Studio and Replication issues • Retailer uptake • Results to date Jack Hayes- Consulting in risk and loss prevention

  3. Introduction to the Australian Market • DVD – a success story. • Market dominated by a few retailers (eg CML controls 45% of this market) • Shared vision by all industry players. • BUT, • Retail theft emerging as a major problem. Jack Hayes- Consulting in risk and loss prevention

  4. Australia - ‘the perfect Test’ • Western style market with a diverse population profile • Both major metropolitan and rural locations • Concentrated retail and studio industry structure • Viable scale and isolated geographically • ie. we could get quick decisions and move fast, plus obtain meaningful results for other western style markets Jack Hayes- Consulting in risk and loss prevention

  5. Retailer issues • Using ‘safers’ drives up labour costs and slows customer transaction time. • Not using safers means theft explodes! • Stock not getting on show FAST because loading safers is slow and safer stock is limited. • Library systems deliver high staff costs, customer complaints and refunds. Jack Hayes- Consulting in risk and loss prevention

  6. How was Red Tag selected? • Coles Myer Limited trials • Source tagging • In store tagging • Safers • Lockable cases - (Viva and Amaray) • Active support from HMV, Borders, Woolworths and Harvey Norman • Result – selection of Red Tag. Jack Hayes- Consulting in risk and loss prevention

  7. The time line challenge • Studio’s initial position – ‘Not my problem’ • Studio’s wanted an instant solution. • Retailer’s wanted an ‘incremental’ transition. • We all agreed for the industry to pack in the new format boxes from 1st August 2002. • Retailers then changed over from that date. • Completion expected Mid 2003. Jack Hayes- Consulting in risk and loss prevention

  8. Studio and Replicator issues • Studio issues. • Existing stock in warehouse. • New releases. • Additional costs. • Imported stock. • Educating their marketing teams! Jack Hayes- Consulting in risk and loss prevention

  9. Studio and Replication issues • Replicators. • Auto packing no re-investment. • Manual packing for small runs. • Pre packed imports. • Existing box stock held. • Changes in box prices. Jack Hayes- Consulting in risk and loss prevention

  10. Multiple EAS Formats • Coles Myer AM trials proved that secure packaging delivered the outcomes required. • But no solution was available for the RF EAS tag limiting the scope. • Red Tag were able to deliver an acceptable RF EAS tag solution using ferrite heads. • Red Tag EM option is also available. Jack Hayes- Consulting in risk and loss prevention

  11. Installation • Retailers purchase locking tags and de-taggers. • Magnetic de-taggers installed at POS • Inserting, removing and re-cycling Red Tags within the Stores proved easy and quickly became routine. • Staff training is straight forward . • Maintenance is nil. Jack Hayes- Consulting in risk and loss prevention

  12. Implementation to date • Studios • All Studio new releases are Red Tag compatible. • Repeat replication of all product is Red Tag compatible. • Stock on hand in Studio warehouses and Stores are being cleared – rate varies. • Imported stock still to be resolved – held off until 2003 to review volume (5%?). Jack Hayes- Consulting in risk and loss prevention

  13. Retailer Uptake This represents more than 80% of DVD retail sales in Australia Jack Hayes- Consulting in risk and loss prevention

  14. Retail Outcomes • Level of theft dramatically reduced. • Transaction time reduced, less queueing. • No changes required to store shelving. • Store labour costs substantially reduced. + Sustained increases in sales across all titles and all retailers Jack Hayes- Consulting in risk and loss prevention

  15. Sales Drivers • Stock on show faster than ever before • Full range on show is now the standard. • Out of stocks are reducing as the order model catches up with the new sales pattern • Back catalogue sales have proved to be a realwinner • DVD can now be displayed throughout the store in high traffic locations and cross product promotions. • Customer complaints – “what complaints”? Jack Hayes- Consulting in risk and loss prevention

  16. A real example (1) • Metro Melbourne. • 24 hour trader, high volume store, medium security risk. Trial Store since Oct 2001. • Hand stripped and repacked ALL DVD stock into Red Tag boxes FROM Oct 2001 to August 2002. • Refused to drop this workload once trial results had produced a 200% PLUS sales increase by February 2002.Sales are still increasing! Jack Hayes- Consulting in risk and loss prevention

  17. A real example (2) • Metro Sydney. • 7 day a week trader, low volume store, very high security risk. Trial Store since Oct 2001. • Hand stripped and repacked ALL DVD stock into Viva boxes FROM Oct 2001 to March 2002. Then changed to Red Tag boxes. • Refused to drop this workload • Unit sales in Oct 2001 - 65 units pw • Unit sales in Nov 2002 - 531 units pw Jack Hayes- Consulting in risk and loss prevention

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