- Datascan’s customers have been seeking automated loss detection or loss prevention, so the tech company built a solution that is now commercially available.
- Those with about 80 percent of their products tagged with RFID may not benefit from a system that identifies unpurchased goods as the leave the store, enabling loss prevention measures.
For 50-plus years, technology company Datascan has been offering inventory counting and management solutions, traditionally leveraging barcode data, but more recently RFID. By capturing the unique ID encoded on product labels, the company’s solution can manage users’ inventory as well as improve their operational efficiency.
Datascan’s partner, Frequentiel, released its Octo+RFID software as a service (SaaS) platform a decade ago, designed to enable retailers to establish, maintain and manage item-level inventory levels, enabling them to ensure products are replenished and available for customers, when, and where, they are needed. As a growing percentage of the goods coming into their stores are already tagged with RFID, retailers have begun looking into leveraging RFID tag reads—for inventory management, but also use cases such as loss detection.
As a result of those requests, Datascan has worked with its partners to create a loss-detection solution as part of their Octo+ platform, said Luke Kosman, the company’s RFID solutions director. The technology company said it is in conversations with several of these customers to begin testing or deploying the new system.
Addressing Rising Retail Theft
In recent years, especially following the COVID pandemic, retail theft has been on the rise. According to a 2023 National Retail Federation report, in just one year retail shrinkage in the U.S. rose to $112 billion from $94 billion in 2022.
In fact, Datascan’s customers are contending with unprecedented theft rates, said Kosman, and have needed an automated solution to help protect inventory. By knowing what products are leaving the store, retailers can not only identify losses but take measures to ensure the products are less prone to theft.
Retailers have asked the technology company: “‘How can we go deeper into what is being lost and perhaps prevent it from bad actors?’,” said Kosman. “They want to go beyond the beeping at the door and quite frankly, most retailers do not want their associates chasing down bad actors.”
Already Datascan has RFID experience across various retail environments, from small stores to large chains, so the company was well-positioned to expand its offering into loss detection and loss prevention.
Growing Prevalence of RFID
As retailers have issued mandates related to RFID tagging of the goods they sell, a growing number of brands have been tagging all their products. That means retailers with or without their own RFID programs are receiving tagged goods that transmit an ID number when scanned by an RFID reader.
Many of such stores are now investigating or deploying systems to leverage the tag data for inventory management.
There is a minimum percentage of tagging adoption at which retailers can start to explore loss detection with RFID as well, said Kosman. He estimated that minimal level at about 70 or 80 percent of merchandise with RFID tags.
“Once you get to that point there’s an interesting use case of loss detection,” he said, “where you can further benefit from your investment in RFID by leveraging EPC number at the exits.”
Custom Solutions for Tag Detection
Each retailer’s requirements are unique, so Datascan customizes the solutions it provides. The Octo+ platform, which resides in the cloud, can identify what passive UHF RFID tag is being detected as a product is taken, and link that tag ID with the product SKU.
Each physical store layout differs, as do the needs of the retailer, so the company helps test, pilot and deploy the right system, working with RFID hardware partners that make overhead RFID reader antennas.
Datascan can also configure the system according to the kinds of alerts or reports a store would benefit from. “It’s really a collaborative effort between us and the client,” Kosman explained.
How it Works
Typically, the solution consists of one or more RFID readers and antennas deployed around a store’s doorways. Tags can be either removed, or turned off, at the time of purchasing. In that way, the only tags that will trigger an alert would be those attached to unpurchased goods.
As a product is removed, retailers can opt to receive a real-time notice via an audible alert, an e-mail or text message. Many retailers are opting against audible alerts because of the disruption they can cause. Store management often discourages their associates from facing down bad actors when a theft is underway.
And for customers, the beep of a theft detection is also a source of annoyance, added Kosman. Therefore, they may choose to receive alerts in a more discreet way or choose to look at preventative measures based on data in their reporting.
The data about what is being removed is then collated in the software and linked to inventory levels so that the store can order replenishment. This feature not only ensures that products are on the shelf where customers can see them, but prevents an omni-channel sale from taking place based on a specific store’s inaccurate inventory levels.
Additionally, the data enables the store to conduct analytics; viewing what product is often subject to shrinkage, when and under what circumstances. They can then take actions that could prevent similar future events.
Boosting Inventory Accuracy
Typically, Datascan has found that for retailers, inventory management is a feature that serves the most value initially.
“The use cases of cycle counting, product search and stock availability: those are really the foundation use cases,” Kosman said, that then open the door to other features, including loss detection.
Datascan’s customers are primarily in the U.S and Canada as well as AMEA and APAC regions. The company is offering the new loss detection feature for those existing customers as well as new ones. Other potential use cases the company could serve in the future could include point of sale (POS) RFID readers that detect the tag of each product, to ensure the product is properly tagged and can be more quickly and easily purchased.