The Digimarc Blog

Operational Shrink Undercutting Growth from Fresh Products

Although fresh prepared foods are growing fast, they are perishable and labor-intensive, substantially contributing to shrinkage and inefficiency. Spoilage is a big problem. In the United States, unsaleable goods—products that are expired, damaged or discontinued—cost an estimated $15 billion annually, according to the Trading Partner Alliance. The group estimates that reducing unsaleable goods by just 1% through process improvements would save about $100 million each year. But spoilage isn’t the entire story when it comes to shrink.

All Shrink is Not Equal

By far the biggest segment of shrink is what’s known as operational shrink, and according to the Food Marketing Institute (FMI), this alone accounts for 64% of total retail shrink. Operational shrink consists of cashiers incorrectly keying in product codes, scan file errors, order inefficiencies and improper product handling.

One big contributor of operational shrink is damaged and unreadable thermal labels (torn, misprinted, etc.) that are difficult to scan and require cashiers to stop scanning and manually enter product codes. As diligent as cashiers may be, human error is inevitable in such situations.

Advanced Barcode for Labels

In addition to errors surrounding incorrectly-entered product codes, damaged thermal labels also lead to slow checkout, which damages the shopping experience and stresses customer loyalty.

Addressing this problem of damaged thermal labels is Digimarc Barcode for Thermal Labels, an unobtrusive code repeated across the entire label that makes it easy for industry retail barcode scanners and handheld scanners to get a reliable scan regardless of the label’s condition. Digimarc Barcode for Thermal Labels offers retailers a number of benefits, including:

  • Significantly increased scanning success at first-pass read rate
  • Improved cashier productivity (easily scan damaged labels)
  • Improved inventory accuracy (reduces manual overrides)

Find out more about Digimarc Barcode for Thermal Labels.





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