It’s Go Time in Retail
Massive change is afoot in the retail sector as legacy standalone technologies give way to the cross-functional uses offered by networked systems. Gaining a keen sense of how organizations are evolving, and what challenges and needs confront them, can create problem-solving opportunities.
That ability for all of an organization’s stakeholders to leverage the investmen
t is what makes retailers unique from other customers, says Guay.
“If you are working at a Fortune 500, you don’t want everyone to have access to all of the different systems,” he says. “But in retail all of the stakeholders in the corporate office are supporting that tip of the spear, commerce optimization, and the video allows them to be present to see what is going on to validate what is supposed to be happening and to make adjustments with what should be happening.”
In updating its annual “Vertical Insights” global retail market report for 2012, research firm IHS found that retail organizations are increasingly migrating toward mobile POS. Some retailers are now replacing traditional checkout registers and assigning clerks to use portable computers to complete transactions. For example, the Apple Store, where no cash registers are to be found. Instead, employees scan the item’s bar code with a specially outfitted iPhone or iPad, swipe the customer’s card and E-mails them a receipt. The transaction can happen anywhere in the store. Near-Field Communications (NFC)-enabled smartphones are also expected to eventually gain in popularity in the United States to make purchases in a similar fashion.
“This changes the way loss prevention managers have to think about stock loss, as putting an EAS tag onto items with a high loss rate doesn’t work in this mobile world,” says Paul Bremner, market research analyst with IHS’ security services division. “I think we will see the emergence of RFID tagging in combination with EAS systems. EAS systems are very much ingrained into retail at this point.”
Indeed, at TycoIS’ exhibit booth at the NRF conference, Sell pinpointed mobile POS as a major disruptor for traditional EAS systems. “If I buy something and I check it out on my own and it has an EAS tag, how do I deactivate it if I’m not going to the counter to deactivate,” he says. “We have to come up with new ways for that mobile point of sale inside the store to work while we are still doing all these other technologies.”
Digital Answers for Retailers With Legacy Systems
As with most other vertical market niches, helping end users transition from analog to IP-based systems remains a definitive opportunity for security providers. The retail sector is no exception, although prolonged recessionary belt-tightening necessitates that many customers continue to leverage existing systems as much as possible.
“It’s finding the right migration strategy for them to eventually get to a more sophisticated solution if that’s what their business demands,” says Art Miller, vice president of marketing, Vector Security.
As Miller explains, if the retailer has existing analog cameras, a managed network services solution can be tailored to provide a bridge or they can utilize the cloud for certain smaller applications. For example, a cash room can be monitored using a cloud solution.
“It’s something that you can develop an IP strategy around. It is a hosted solution that allows you to look at things remotely,” Miller says. “They can parse out those little applications and start to look at that from a cloud perspective or some other digital solution. Finding that right migration strategy is really the key.”
Andersen describes migrating from analog to IP is like taking small, manageable baby steps that are measurable and quantifiable. If the budget doesn’t allow for it or the user’s needs don’t call for it, there is no need for rip and replace any longer.
“If you are still in the coax world, you can put in a media converter to digitize that signal so that you can put an encoder on that camera. As that camera reaches end of life, you can then migrate the customer to IP,” she says. “You can actually fully depreciate the analog camera and still have all the benefits of an IP world. It’s a matter of getting them there at a very cost-conscious way of delivering that.”
To that end, March Networks arrived at the NRF conference primarily to promote its new series of eight-channel hybrid NVRs. Geared for small and midsized retail organizations with analog cameras, the boxes offer intuitive software for fraud identification and store operations monitoring.
A suite of intelligent video software applications integrates surveillance video, analytics and POS transaction data to provide customizable, automated reports with video images. Retailers can quickly scan the reports each day to see if their stores opened on time, if shelves were stocked properly, employees were dressed as required, and to review other compliance and operational standards. Exception reports can also be assessed to catch suspect transactions.
Ali Mahmoud, March Networks’ product line manager for vertical software solutions, explained how a retailer could generate Web-based reports to track theft incidents or other issues using the hybrid NVR platform with existing analog cameras. His generic example, a small fast-food restaurant: A back door report, which records every entry/exit, would provide a thumbnail image of each person who opens the door from the outside or inside. “Maybe we want to see if somebody is going outside and taking too many breaks. The report is really quick to skim through. I am seeing if somebody is carrying product out; if they are letting their friends in, etc.”
Rodney Bosch is Managing Editor for SECURITY SALES & INTEGRATION. He can be reached at (310) 533-2426.
Employees Are Thieving in Record Numbers
Shoplifting is a seriously increasing problem that is stealing retailers’ profits while driving retail prices higher and can result in the closing of stores, says the author of the newly released Retail Theft Survey.
The 25th annual survey by consulting firm Jack L. Hayes Int’l examined 23 of the largest retail companies in the country, which collectively operate 18,900 stores with sales exceeding $589 billion in 2012. The study shows that 71,095 dishonest employees were apprehended in 2012, up 5.5% from 2011. In total, more than $50 million was recovered in those cases, up 7% from a year earlier.
The survey’s reporting retailers alone apprehended more than 1.1 million shoplifters and dishonest workers, and recovered more than $189 million from these crooks in 2012. That represents more than an 18% increase in recovered dollars compared to the previous year, according to the annual survey.
“The theft problem is not getting better, it is getting worse as shoplifters and dishonest employees continue to steal in record numbers,” Mark Doyle, president of Jack L. Hayes Int’l, tells SSI. “Retailers need assistance from manufacturers and dealers with workable cost-effective solutions to help prevent these thefts from taking place on both the internal [dishonest employee] and external [shoplifting] fronts.”
Which technologies and other preventive measures prove most effective in thwarting perpetrators depends on the
type of crime. While customer service is the best deterrent to shoplifting — most shoplifters want and need privacy — the use of electronic article surveillance (EAS) systems and CCTV certainly is of great benefit to retailers, Doyle says the survey bears out.
“We are hearing that advances in data mining/point-of-sale [POS] exception reporting are having a big positive influence on more accurately and quickly identifying possible employee theft situations. This technology is a must for most all retailers.”
Though the report did not provide exact numbers, in general, more recently hired employees — those with less than a year on the job — and part-time employees with no vested interest in the company are the employees who tend to be apprehended more frequently.
Among other key findings, 2012 proved the sixth time in the past 10 years where both shoplifter and dishonest employee apprehensions and recovery dollars increased. Also, dollar recoveries from shoplifting apprehensions increased for the 10th time in the past 11 years; and dollar recoveries from shoplifters where no apprehension was made have now increased for 16 consecutive years.
Complete survey results are available at hayesinternational.com.
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