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Retail Security Spending Reflects ROI Prospects

Systems integrators that can leverage analytics-enabled applications to solve retail operational issues are finding success in an oftentimes frugal market sector. Stemming loss prevention, migrating analog systems to IP, and demonstrating ROI are other significant market drivers.



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<p>Much of the retail industry has been slow to migrate its vast installed base of legacy analog systems to IP. Dealers and integrators can make a compelling ROI case by leveraging a retailer’s investment in analog and provide a hybrid solution that supports megapixel cameras, loss prevention applications and more. Courtesy SSI</p>How Technology Is Creating Business Value

Analytics-enabled applications are being adopted alongside video surveillance to help deliver insight into shopper behaviors. IP video technology, coupled with an integrated suite of video analytics solutions, can be the key to building business performance with a higher ROI and improved customer conversion rates.

By leveraging video analytics in conjunction with a video management platform, retailers can better understand the answers to questions such as:

  • How many customers are in the store at specific times of the day/days of the months/months of the year?
  • Which areas of the stores generate the highest conversion rates and what locations do customers dwell or spend the most time?
  • Where are the “premium real estate” locations in the store that receive the most foot traffic?
  • How do people interact with in-store promotions and product placement?
  • Who is purchasing store brands versus the national brands?
  • How can we measure the traffic patterns within the store?

In today’s economy, retailers are being forced to manage their businesses “by exception” in order to control costs. This means retailers are increasing their reliance on technology to flag potential issues.

“For example, query-based software enables video to be searched depending on the type of transaction, such as no-sales, voids, returns, and cash and credit sales by store or by employee,” says Wedel.

These software solutions are able to produce automated reports based on patterns and tendencies. Managers can be alerted should an incident need to be investigated. Procedural errors are also captured so that corrective action can be taken. The trend here is crystal clear: video is becoming a vital source of data.

“Everybody has video and there is tons of it just taking up expensive hard drive space. What businesses are starting to figure out is that there are pieces of useful information that can make your business better,” says Al Shipp, CEO of 3VR, a provider of intelligent surveillance and search solutions. “Surveillance infrastructure is becoming a data entry point for key transactions.”

Forming Long-Term Customer Relationships

The ability for an end user to leverage a common infrastructure that operates multiple functions is creating long-term customer relationships for installing security contractors. For example, once a retailer starts solving LP issues with their initial investment, it then becomes opportunistic to demonstrate what else that same infrastructure can do for their bottom line.

“If an integrator can sell a security solution and also solve some of the customer’s retail operations issues, that is a real winner,” Shipp says. “I can’t think of a single customer of ours that started out with everything. They started out solving an LP or security issue and added on one retail [analytics], liked what they saw and they continue to add more.”

For selling multifaceted retail solutions, Shipp advises integrators to first call on their traditional physical security contacts but be prepared to ask questions about the store’s retail operations. Come to the meeting equipped with examples of what you can do to solve their operational issues for a modest incremental investment.

“Typically what happens is an end user physical security guy will say, ‘I need to include some of our marketing people, retail operations people,’ which leads to a bigger meeting with other departments,” Shipp says. “When that happens you can access multiple budgets and you get a whole lot of corporate buy-in, so you get a whole lot of support.”

As a security integrator specializing in the retail sector, Todd Flowers, president of Roseville, Calif.-based Surveillance Systems Integration (SSI), says along with demonstrating business value, future-proofing a client’s system is paramount. The key, especially in a moribund economy, is to leverage the customer’s investment in analog by providing a migration path to IP. Although the retail industry has been slow to migrate its vast installed base of legacy analog systems, customers can be convinced that IP makes sense for them but you have to demonstrate ROI.

“Those who are not ready to fully abandon their current analog system like the idea of slowly migrating their system as the analog components reach their end of life. The use of cost-effective Cat-5e wire versus the more expensive RG59 coax is another strong motivator,” Flower says. “Copper is a raw commodity that often fluctuates and responds to what is happening in the market; thus, creating unstable pricing. Moreover, most structures typically have Cat-5e above the ceiling, so it creates a seamless move when they are ready.”<p>Analytics software uses video data to analyze traffic flows and shopper movement, measure and predict queue lengths and wait times, monitor zone activity, and provide real-time reporting. Courtesy Verint</p>

Fostering a relationship with a customer can be as simple as adding additional technology such as wide dynamic range (WDR), he says. This significantly improves videolight-challenged areas such as jewelry cases and entry/exits points, where reflective or harsh bright light would effectively make video images useless with standard or high resolution analog cameras.

Flowers also explains the use of public view monitors (PVMs) has shifted in the market and is a perfect value-add to offer a client. Traditionally, retailers used PVMs as a visibility tool, displaying their patrons as they entered or exited their establishment and giving the overall presence of video surveillance within their store. Retailers can effectively use their PVMs as a market tool, as well.

“With the right feature set within the PVM, they can now display current feature ads or promotions within the store,” Flowers says. “This allows retailers to strengthen their alliances with their vendor’s current products and offering the retailer more creative freedom with budget fund allocations.”

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Article Topics
Vertical Markets · Features · Retail · Sony Electronics · Surveillance Systems Integration SSI · Verint · Video Analytics · All Topics

About the Author
Rodney Bosch
Although Bosch’s name is quite familiar to those in the security industry, his previous experience has been in daily newspaper journalism. Prior to joining SECURITY SALES & INTEGRATION in 2006, he spent 15 years with the Los Angeles Times, where he performed a wide assortment of editorial responsibilities, including feature and metro department assignments as well as content producing for latimes.com. Bosch is a graduate of California State University, Fresno with a degree in Mass Communication & Journalism. In 2007, he successfully completed the National Burglar and Fire Alarm Association’s National Training School coursework to become a Certified Level I Alarm Technician.
Contact Rodney Bosch: rbosch@ehpub.com
View More by Rodney Bosch
Features, Retail, Sony Electronics, Surveillance Systems Integration SSI, Verint, Video Analytics




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