Electrical Article Surveillance (EAS) Market Trends

Growth Drivers

• Rising demands for retail shrinkage mitigation: The increasing percentage of retail shrinkage is a major growth driver of the global electronic article surveillance sector. Retailers globally are prone to losing billions of dollars owing to shrinkage attributed to theft, shoplifting, administrative errors, etc., which can affect profit margins. For instance, the National Retail Security Survey 2023 estimated profit losses of around USD 100 billion from retail shrinkage.
  
  Additionally, a comparison between the National Retail Survey of 2019 and the National Retail Survey of 2023 highlights a grim picture of losses doubling in 5 years. This creates a pain point for retailers that EAS systems can effectively solve. When fitted in a public building or a store, EAS systems can be triggered when a person leaves with a product with an active tag or label attached to it. Providing real-time alerts can significantly reduce thefts and shoplifting, leading to EAS systems becoming mainstays in numerous retail stores.
• Expansion of organized retail: The rise of organized retail globally benefits the growth of the electronic article surveillance (EAS) market. Organized retail is witnessing a surge fueled by growth in emerging economies such as India and Indonesia. The rapid urbanization trends globally benefit the growth of organized retail as a middle class with disposable income emerges for retail stores. With an increased construction of supermarkets, malls, and chain stores and a growing penetration in tier 2 and tier 3 cities, the need for efficient security measures is booming.
  
  The scalability of EAS systems makes them ideal for small and large retail operations, positively affecting their adoption rates and boosting the EAS sector’s growth. Hence, the expansion of organized retail correlates with the growth of the global electronic article surveillance (EAS) market. For instance, in February 2024, Miniso launched its revamped store in the DLF mall in India. The brand entered the market in India in 2017 and has expanded to more than 200 stores in 120 cities in the country, highlighting the expansion of organized retail in emerging markets.
• Growth of omnichannel retailing: The rapid growth of omnichannel retailing where customers can shop across multiple channels from physical stores to online, benefits the growth of the global electronic article surveillance sector. The rise in omnichannel retailing leads to increased inventories and store networks of retailers, boosting applications of EAS systems as retailers look to secure warehouse and distribution centers.  The ability to mitigate shrinkage at various stages of the retail process is poised to increase demand boosting the electronic article surveillance (EAS) market’s growth. For instance, in September 2024, Decathlon announced a partnership with quick commerce firm Zepto signaling omnichannel expansion. These trends benefit the market’s growth curve as businesses are positioned to seek robust EAS systems to heighten security across various stages of the retail process during omnichannel expansions.
  
  Additionally, EAS systems enable retail analytics that can improve inventory management. This provides greater incentives to various operators to integrate EAS systems in their operations.

Challenges

• False alarms and malfunctions: The electronic article surveillance sector faces challenges of system malfunctions and false alarms. Electromagnetic interference from nearby equipment or radio frequency noise can trigger false alarms. If the rate of inaccuracies is high then it can cause damage to a manufacturer's reputation and distrust in the electronic article surveillance (EAS) market.
• Costs of integration with e-commerce and omnichannel retail: Traditional EAS systems face a challenge in integration with omnichannel retail. It can be a challenge for manufacturers to design robust systems able to handle inventory security across various platforms. This creates demands for advanced EAS technology which can increase installation costs, discouraging small-scale retailers.