Technology Report: SourceSecurity.com
By Larry Anderson
The retail market is facing unprecedented challenges as brick-and-mortar locations struggle to redefine their role in the age of online commerce. Retailers also deal with continuing, age old requirements to minimize costs in a competitive landscape and to provide services and a customer experience that encourages repeat business.
Video surveillance technology today offers new tools to help retailers. Video in the retail sector has long been associated with loss prevention – providing that “eye in the sky” for store security personnel. But just as retailers are re-inventing themselves, so is video technology.
The biggest change in video is a transition from analog to systems based on Internet Protocol (IP). Networks of cameras connect like computers and can become part of a retailer’s information technology (IT) infrastructure. From the retailers’ perspective, the other exciting development in video is more capabilities at lower costs. Cloud-based systems are also having an impact. Video systems that provide more value to retailers are creating new opportunities, doing more for less money, and expanding the role of video in the retail environment. In effect, video is offering new tools for retailers right when they need them the most.
Return On Investment (ROI) in Retail
Return on investment (ROI) is a key metric in any business, but is especially so in the retail sector, where profit margins may be narrow and could be threatened by the installation of any equipment that doesn’t “pay for itself.” Expanding uses of video boost cost-justification scenarios for any retail business.
More cameras are being installed in retail environments, and the value of camera systems extends far beyond loss prevention. Everyone may immediately think a camera is for loss prevention, but some cameras today can also be used to ensure compliance with PCI (Payment Card Industry) regulations, standards for retailers who handle credit cards. Regulatory factors are requiring camera systems with additional storage – up to 90 days. Cameras can watch a server to ensure PCI compliance. Using video to ensure compliance may have been cost-prohibitive several years ago, but not anymore.
Camera systems also contribute to general liability and safety for retailers. Cameras are being deployed to watch escalators and parking lots (where personal injury liability claims might originate), prompted by the risk management department rather than loss prevention.
Cameras can detect if a person is present when an employee provides a refund, or voids a sale, or performs some other high-risk transaction.
Snippets of video can also be used in training to show good and bad examples of employees in action.
But that’s just the beginning of the value video provides to retail operations beyond loss prevention. Big value comes in the areas of operations and merchandising.
Value for Operations and Merchandising
Even systems originally installed for loss prevention may extend their value if video access is provided to other departments, such as operations and sales. The same camera views used for loss prevention can enable owners or managers to inspect their stores: How much stock is in the back room? Is there a backlog of merchandise? How long is the queue at checkout? Did the store open on time? Are the right people in place? Has the store completed the planogram?
Using information gleaned from video is another useful tool for retailers, especially when combined with other information to yield analytics of – and insights into – store operations. The most common example is conversion rate: How many people who come into the store actually buy something (and how much)? A camera with people-counting capabilities, mounted at the entrance, provides a total number of customers, which can be compared with sales numbers to measure conversion, for the day or during various periods throughout the day. If one store is not performing on par with the others, the conversion rate number can provide a red flag. There may be customer service or staffing issues. The queue wait may be too long. Staffing may be inadequate at peak times. More and more retailers are using conversion rate to help them manage their businesses more effectively…