Case Study SECURITY RESOURCE CENTER .

Virgin Megastores is at the cutting edge in global innovation. Since Sir Rich- ard Branson opened Virgin’s first record store in in 1971, the focus has been on delivering market leading products and quality customer service to shoppers around the globe, making Virgin one of the world’s most successful entertainment retailers.

Retail security has a crucial role to play in this. Today’s Megastores offer customers over 180,000 CDs, , videos and games, as well as books, digital hardware, clothing and even musical instruments–easily- transportable, high-value goods that are also popular theft-prone lines.

THE CHALLENGE Virgin is one of many UK retail chains that has turned to ADT for security expertise, with ADT now managing security solutions in the majority of Virgin’s 150 UK stores. The two market leaders have worked together for almost a decade, and have carved out a niche developing tailored solutions to meet evolving retail needs.

As thieves become increasingly sophisticated, the need to protect high-value portable goods while minimiz- ing restrictions to customers in store has presented a challenge for Virgin. Today, integrated security systems with data feedback mechanisms are required to improve efficiency in store and also provide valuable in- sights at corporate level.

Consequently, security systems have seen key developments for the over recent years. Virgin–along with other retailers including Borders Group--has invested in upgraded systems as they continue to drive improved efficiencies in store, in a bid to annual retail industry losses of £1 billion*.

VIRGIN’S NEEDS Virgin tasked ADT with developing its electronic tagging system which would continue to meet its challenge of protecting easily stolen, expensive merchandise while providing loss prevention teams and the head of- fice with the valuable management information they need to improve efficiencies. Virgin has long been at the forefront in security product development, where solutions are integrated to both deter thieves and reduce loss. While the majority of Virgin’s stores have long used ADT-installed CCTV (closed circuit television) and EAS (electronic article surveillance) systems as a means to reduce product loss and shrinkage, the need to integrate these systems and develop more advanced approaches to reduce shrink has become increasingly apparent.

*2003 BRC Retail Crime Survey Case Study SECURITY RESOURCE CENTER

Virgin Megastores.

THE SOLUTION The last six months have seen ADT install SmartEAS’ in thirteen Virgin Megastores (including their new flag- ship store in Piccadilly). SmartEAS is the industry’s answer to closing the loop between what happens at the entrance/exit of the store, the staff response to alarm situations, and management of information by senior management and loss-prevention teams. Information recorded by SmartEAS readers can be down- loaded, e-mailed or sent by text messaging to any nominated party as an incident occurs. It includes a peo- ple-counting facility where regular analysis may eventually allow for staffing to be increased or decreased to mimic shopping trends on a local level, and also provide central functions (e.g., marketing) with information on customer footfall by entrance in each store.

The acousto-magnetic source tagging technology developed by ADT is seen by many as offering the best de- tection rates in the industry, and has proved a breakthrough in preventing theft of portable high resale-value goods like CDs and DVDs.

RESULTS The successful conclusion of last year’s trial has proven its return on investment potential and Virgin now intends to roll out implementation of the new integrated system across the rest of their estate in the UK. The additional information provided by SmartEAS is also greatly benefiting Virgin at both the in-store and man- agement level. The customer traffic reports allow Virgin to evaluate the success of marketing promotions and new product lines, by providing customer-flow figures in real-time if required. The alarm-management reports allow Virgin to identify response times to alarm activations in store and any patterns in the trading day when there is likely to be an increased risk of theft. This vital information on the retail environment allows manage- ment to make key operational decisions for the benefit of customers and staff, and, ultimately, the financial performance of the store.

WHY ADT? Leading the industry toward new security solutions is a joint aim of ADT and Virgin. The partnership is such a success because it brings together cutting-edge security innovation with a leading retailer prepared to invest in trials of new products; together, focus is on the long-term benefits of reducing the major problem faced by the whole retail industry–that of shrinkage.

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