The Red Tag Experience in
Australia
As at 1st December 2002
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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
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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.
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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
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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.
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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.
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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.
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Studio and Replicator issues
Studio issues.
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Existing stock in warehouse.
New releases.
Additional costs.
Imported stock.
Educating their marketing teams!
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Studio and Replication issues
Replicators.
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Auto packing no re-investment.
Manual packing for small runs.
Pre packed imports.
Existing box stock held.
Changes in box prices.
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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.
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Installation
Retailers purchase locking tags and detaggers.
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.
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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%?).
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Retailer Uptake
Implemented
Kmart
Mega Mart
HMV
Harvey
Norman
Borders
Committed
Target
Blockbuster
Toys R Us
Ezy DVD
Pilot
Big W
Dick Smith
ABC
David Jones
JB Hi-Fi
This represents more than 80% of DVD retail sales in
Australia
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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
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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 real
winner
DVD can now be displayed throughout the store
in high traffic locations and cross product
promotions.
Customer complaints – “what complaints”?
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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!
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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
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