The immense pressure placed on retail security directors to do more with less is being passed directly along to the installing security dealer and integrator community. Resulting business opportunities are there for dealers and integrators that can successfully demonstrate return on investment (ROI) in deploying innovative solutions, as well provide a migration path to IP for legacy installments.
The challenges faced by retailers are consistent across the entire market sector. According to the National Retail Security Survey (NRSS), retail shrinkage — a loss of inventory due to employee theft, shoplifting, paperwork errors or supplier fraud — amounted to more than $34 billion in 2011. That is a slight decrease compared to the previous year; however, the strain on margins caused by shrink is greatly intensified during economic uncertainty.
In addition to traditional security and loss prevention (LP) applications, retailers are finding that video from IP cameras can be gathered and analyzed just like any other electronic data. This too presents an opportunity for dealers and integrators to expand their portfolios to help stores use video to improve merchandising, sales conversion rates, store design and customer service.
If you are an installing security contractor who prizes developing long-term customer business relationships, there are platforms that provide the opportunity to not only sell a comprehensive solution on Day 1, but gives you the opportunity to come back and add additional capabilities that are valuable to the customer over time.
Let’s take a closer look at the technologies, services and sales tactics and shed some light on where the retail business is today and where it is likely to find itself tomorrow.
Down Economy Boosts Need for New Capabilities
Among prevailing trends in the retail sector, enduring economic sluggishness has created an increase in aftermarket and remodel work for the security industry as new construction has lagged. Decision makers in the retail space may have less to spend but are still charged with making significant security upgrades. Very often that’s driven by the need to create a more sustainable property management program, according to Jan McKenzie, director, national accounts, ASSA ABLOY Door Security Solutions.
“Customers want robust solutions that will dovetail with legacy security systems. ASSA ABLOY has invested in creating solutions such as electronic access control and wireless products to address this exact issue,” she says. “Concerns such as securing unattended deliveries, creating compliant spaces in pharmacy and health-care applications, and assisting with employee access to locked inventory are all areas that we are addressing.”
Wireless systems are seeing an uptake in retail settings of varying size. For single stores, solutions that will work in the typical aluminum storefront common at strip malls is an example of how going wireless can solve trenching and other issues related to hardwired systems. Big-box stores are using wireless installations to protect smaller storage units and other nontraditional openings, McKenzie says.
Given the decrease in consumer spending, brick-and-mortar retailers are finding that it’s more important than ever to compete not just against each other, but with online stores as well. Accordingly, despite the downturn, retailers of all sizes are leveraging IP-based surveillance systems for reasons other than physical security.
“Many large retailers are continuing to invest in IP video equipment as a way to enhance their business intelligence,” says David Wedel, strategic business development manager for Sony Electronics’ Security Systems Division.
Retailers are using data from IP cameras to provide them with complex analytics that can measure and optimize sales in much the same way that their e-commerce competition does. “Just as a Web site can track the number of visitors who ultimately make a purchase, retailers can use IP cameras to count the number of people entering and leaving a store, which helps them calculate conversion rates,” Wedel says.
For smaller stores, the emergence of managed video as a service (MVaaS) and video surveillance as a service (VSaaS) is making it possible to outsource some elements of LP and video management to third-party vendors that provide video audits, investigations, secure video storage, and video and audio forensics services. “This cost savings makes IP video very attractive for them, so we are continually seeing smaller stores upgrading from analog to IP-based surveillance,” he says.
Economic pressures and the rise in e-commerce is also forcing brick-and-mortar retailers to revisit their strategic priorities to focus on higher levels of customer experience, channel convergence plans and new marketing and merchandizing approaches.
In today’s highly competitive retail environment, traditional ways of measuring store performance and in-store activity do not provide the empirical accuracy or insights for optimizing security and operational effectiveness, explains Debjit Das, vice president of global marketing for Verint, a provider of enterprise and security intelligence. “As the competition to attract shoppers and enhance sales and profit margins intensifies, investing in technologies that provide retailers a competitive edge becomes essential.”
This holds true for both larger chains as well as single-store operations. Retailers are relying on technology that not only addresses LP and monitors physical operations, but also looking into powerful analytics tools that provide in-depth information on store performance management, workforce optimization, improved marketing and merchandising as well as store layout.
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Vertical Markets ·
Sony Electronics ·
Surveillance Systems Integration SSI ·
Video Analytics ·