Retailers find security in source tagging (sidebar)

In security labels, Electronic Article Surveillance labels can use a variety of technologies. Two of these-acoustomagnetic and radio-frequency-are strongly competing for the U.S. market. A third type, and an admittedly late entry here, is the electromagnetic version promoted by P.P. Payne, a well-known maker of pressure-sensitive teartapes in England with U.S. representation (Ashland, VA). What this technology brings to the entire security label debate will be the subject of a presentation at Flex-pak '97, a Schotland Business Research conference to be held March 18 and 19. The two leading systems have become entrenched in the U.S. by aligning themselves with individual retailers. Their strategy has been that if the retailers commit to a certain technology, those retailers will convince manufacturers that supply those stores to source tag packages with their labels. In the case of Walgreens drug stores, the theory appears to be working. And probably so with other retailers as well. Another approach P.P. Payne is working the other "door" to the market. Its strategy is to persuade the product manufacturer to use its system. Based on its success in books in Europe, the Payne Tagacs(TM) system is being promoted as the system that can be most easily applied to the product or package. In essence, Tagacs claims to be the easiest and most inexpensive system for the product manufacturer to use. That's the story that Adrian Cudmore of Payne will unravel at Flex-pak. His comments are convincing; the product's history is less so. If you look at the medium, there's little doubt that the Payne system can be applied more easily. Especially at the kinds of speeds that U.S. equipment normally uses, whether in a converting operation like a carton plant or in a packaging environment. The Tagacs label is simpler. It measures 1/4" x 3" in most formats and it's applied in much the same way as Payne's tearstrips are: From a large roll, a small piece is cut and applied to the medium-a blister card, a box, etc.-with its p-s adhesive. "Until recently, source tagging has been a big problem because the other technologies are not suited to high-speed application on full-scale production runs," says Payne's Cudmore. "This is where we've solved the problems." He says that U.S. companies applying labels at the converting step (Kodak is said to be applying Checkpoint labels to cartons in its own folding carton plant) are few and far between. And, says Cudmore, application of the label requires sacrifices in speeds. "I've been at conferences where manufacturers have said it costs them fifteen cents to put a tag in each package," he says. "That's astronomical." It's also about three times more than what he says is the application cost for Tagacs. In many cases, he claims, the labels are being applied by hand in stores. He admits there's little likelihood that retailers would use more than one "gate," the sensing field that shoppers walk through. That's too costly. So, like the beta videotape makers of the '80s, Payne is hoping to convince a major manufacturer like Procter & Gamble or Lever to install Tagacs equipment on its production lines. That, he says, would "put pressure on retailers" to look at electromagnetic security systems. After all, he says, "We're a manufacturer that has solved a manufacturing problem."