So Why Isn’t Shrink Shrinking?

January 1, 2006
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Video analysis can alert when a shelf item is moved, but not when a shopper or employee walks in front of the items. Photo for Apple by Court Mast Photography

Industry studies show that more than 80 percent of all retailers use security video as a key component of their security infrastructure, bested only by burglar alarms. So, it must be an excellent loss prevention (LP) tool. Or is it?

In fact, shrink (the retail industry’s term for losses) has remained fairly steady over the past 15 years at 1.5 to 1.9 percent of total annual sales. Other statistics are equally unnerving. For example, studies show the average loss per shoplifting case skyrocketed from $265 in 2003 to $622 in 2004. And, according to the National Retail Federation, almost half of all retailers surveyed see an increase in organized retail crime.

So what does that mean for return of investment of security video? Adding more cameras and digital video recorders (DVRs) alone may not shrink the shrink.

Customers and employees both can add to the growth of shrink. Traditional security video monitors and can help with investigations. Intelligent video analytics is pro-active.

Fortunately, video analytics may prove a turning point. These new technologies, based on computer vision research at leading universities, transform video data into actionable information that can better prevent loss. The ability to recognize moving objects within a single video stream has been available for some time. With the next major advance, the ability to track moving objects and people across multiple cameras opens a new range of applications, enabling security to accomplish tasks never before possible. These include performing asset-based monitoring and following individuals across cameras using computer-aided tracking.

A dome camera watches over the Brookwood Village Shopping Mall in Birmingham, Alabama.

Video technologies

Today’s traditional security video has two uses for retail loss prevention: “real-time” mode to monitor the shop floor and “forensic” mode to investigate past incidents. However, both are time-consuming and problematic. In fact, one retailer recently reported that less than one percent of all of its recorded video is ever viewed. And many of today’s thieves – whether internal or external – realize these shortcomings and see security video cameras not as a deterrent, but as devices that pose little if any risk.

Imagine that a shoplifter is removing merchandise from the shelf and placing it into a duffel bag with the intent to walk out of the store with it. The best retailers can hope for with their security video system is to capture a recording of the theft. If they get lucky and happen to spot the theft live on a store camera, they may be able to apprehend the thief, in which case that video could even play a role as evidence. But in most cases, the system is not actually stopping theft, just recording it.

Intelligent video analysis goes beyond searching and scene-change detection. Note the red banner and highlighted box in the upper right frame, indicating an alert.

Intelligent analysis

Video technology is most useful when it is able to “separate the noise from the signal;” to isolate and recognize objects of interest – mainly people; and track them through the store. Until recently, there has been no way for a security video system to track or isolate relevant objects or events while filtering out the rest. Security executives, store managers and security officers have been left to perform this tedious and time-consuming task manually.

Called by some “intelligent video analysis or analytics” (IVA), a new approach to surveillance goes well beyond simple searching and scene-change detection – even beyond object tracking. IVA solutions employ techniques long used in traditional information processing to provide business intelligence. By correlating and analyzing streams of video data from multiple cameras, IVA can transform passive video data into useful and actionable information. It watches all the video all the time, surfacing important details.

Finger biometrics can easily identify a customer. A survey shows customers have confidence in the security approach.

Retailers and their security operations can use IVA to add a range of new capabilities. Loss prevention can identify suspects and the system can then help to track them across multiple cameras in real-time. They can also retrieve video not just by camera and time but also by appearance or disappearance of assets or people; so if they need to find what caused the wipeout of a particular item, the IVA system can instantly provide that information from a simple query.

Analytics can combine with other in-store systems to enhance functionality and further reduce shrink. Consider what happens when a customer walks out of the store and the electronic article surveillance (EAS) alarm sounds. Most of the time, little is done and the shopper departs. But within seconds, using IVA, store personnel can search the shopper’s visit to determine if anything was taken without payment; and, if so, security can detain the shopper.

The most advanced IVA systems today can even monitor high-value assets without the need for electronic article surveillance tags, and send an alert when the item is moved or removed. These systems will only issue an alert when the asset is moved, not when a shopper or employee walks in front of the item. Pixel-based technologies, which detect changes in video images, are not viable in most typical loss prevention applications, simply because they generate too many false alarms.

The new technology adds intelligence into existing video infrastructures. Retailers can keep informed with up-to-the-second information, pinpoint incidents and gain insights into their business operations.

Subhead: What About Cost Savings?

Once there is an investment in intelligent video analysis (IVA), there are cost savings and revenue growth for retailers. It's the same with security adopters in other types of organizations.

-Reduction in shrink. Improved theft detection and asset monitoring

increases the rate of shoplifter

apprehensions.

-Reduction in internal theft. Employees understand system

capabilities and are deterred from engaging in illegal behavior.

-Improved loss prevention

efficiency. Security becomes more productive with the assistance of

electronic surveillance and alerts.

-Increased revenue. IVA systems can significantly reduce criminal behavior at stores. Shoppers tend to frequent stores in which they feel safest.

-Additional value from existing systems. IVA systems enhance the

functionality and value of the investment in existing in-store systems.

An 8-Step Deal

1 Deploy a high-tech front line defense. Surveillance cameras are available in all shapes and sizes, including traditional, discreet, covert and domes. Innovations overcome glare, shadows and backlighting. New direct-drive motors provide pans/tilts/zooms of exceptional smoothness and precision.

2 Share evidence quickly, easily. There’s a digital recorder right for every size enterprise. Make sure there’s a built-in CD-R to share evidence with law enforcement. Larger retailers can select units that capture 120 pictures per second.

3 Take exception-based reporting to next level. A POS interface associates receipt text with video from a DVR. This also works with exception-based reporting software.

4 Subtly announce loss prevention measures. Many retailers display live video on a large screen, such as a 20-inch LCD. People see themselves on the monitor. When not showing surveillance video, these monitors can additionally display a variety of advertising and multimedia messages.

5 Mind the store remotely. Video surveillance systems will let loss prevention personnel view live or recorded video from any camera on the store’s network, from anywhere they have Internet access, even if the cameras are analogs.

6 Control access without keys. Newer systems provide a single platform for intrusion alarms and access control. One card unlocks doors, disarms alarms, even turns on the lights, automatically. At closing time, the store manager or owner simply locks up and the central station provider takes over automatically.

7 Deploy deliveries efficiently. Business service mapping uses GPS to track and deploy delivery crews. Using an intuitive, map-based interface, dispatchers can schedule projects and assign employees and vehicles.

8 Manage access to delivery vans. Retailers can equip delivery trucks with locking systems that audit every time a lock is opened and by whom. These are intelligent electronic key systems.

Sidebar: Biometrics Thumbs Up

Retail applications may prove the tipping point for security’s overall use of biometrics.

Regardless of payment type – credit or debit card, check or cash, three of five consumers believe the unique image of their finger would be the most difficult form of identification to forge or steal, reported Los Angeles, Calif.-based Kelton Research Group. In its survey, “Changing Behaviors in Retail Commerce,” consumer confidence in biometrics far exceeds confidence in a passport, photo ID, major credit card, birth certificate and signature combined.

Commissioned by biometrics payment firm BioPay, the research mirrors the move by retailers into advanced payment solutions that include higher level security. Acceptance in retail settings by consumers should seep into acceptance by them on the job.

Among Kelton survey findings:

- Identification of choice. More Americans believe that finger images are a more secure form of identity than passports, credit cards, photo IDs, birth certificates and signatures combined (51% to 36%).

- Women take to technology. Women under the age of 44 showed the most confidence in the use of finger image technology; 15 percent more than men of the same age (63 percent to 48 percent).

- Payment at checkouts faster please. Forty-eight percent blame long check-out lines on people who wait until the last minute to find their credit or debit card. Another 20 percent believe check writing is burdensome.

Check the Public View System

One of the trends in retail security is the use of technology in multi-tasking ways. Some intelligent security video systems can also provide management training and review information as well as real-time customer service. Another type of tech – public view display systems – combines security video with in-store marketing. One example: The Aigis CrystalVue PVD builds a high quality camera into a bright LCD screen to produce a sleek, modern offering. Built-in advanced electronics allow the unit to display marketing information while it captures video surveillance. Upon alarm, motion, or change in light level, security video can be instantly displayed to notify the viewer that surveillance is employed.

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