Setting the Bar in Biometrics: Accuracy, Robustness, Software Integration

Editor / Provider: the Editorial Team | Updated: 12/26/2011 | Article type: Tech Corner

The worldwide market for biometric identification (not limited to physical access control) grew to US$2.6 billion in 2009, and research from Acuity indicates that revenues will reach $10.9 billion by 2017. Other studies show higher projections, pegging the worldwide market at $5 billion in 2010, growing to $12 billion by 2015 at a CAGR of 18.9 percent. In this two-part feature, a&s explores the latest advances and applications in biometrics and RFID authentication, addresses real-life usage and development issues, and outlines where the technologies might be headed.

Today, the general public is more aware of the changing security landscape, not just from high-profile terrorist threats, but also from malicious threats such as ID theft and financial fraud, said John Kendall, Director of Security Programs for APAC, Unisys. “Because of this, people are more open to forego some level of private information in return for greater security where they see there is likely to be a benefit to them.”

Growth has been hindered mostly by a lack of education. “Biometric technology is surrounded by many myths and misnomers; therefore, to gain 100-percent acceptance, the biometric community must educate,” said Scott Mahnken, VP of Marketing, Bio-Key International. “We are devoting a substantial part of the 2012 budget to educating the marketplace at all levels, including consumers, who are concerned about the cost of modifying existing infrastructure along with some old- school thinking.”

Market Potential
There are two main drivers for biometrics — accuracy and user-friendliness. Accuracy can be broken down into two additional categories — security concerns and reporting accuracy. If access control systems are to control where people, not credentials, can and cannot go, then only a biometric device truly provides this capability. “That's why more and more biometric readers are showing up in access control systems where there are needs for high security,” said Jennifer Toscano, Marketing Manager for Ingersoll Rand Security Technologies.

“In addition, biometrics are user-friendly. While keys don't cost much and dramatic price reductions have lowered the capital cost of cards in recent years, the true benefit of eliminating them is realized through reduced administrative efforts. For instance, a lost card or key must be replaced and reissued by someone, just as there's a price associated with the time spent to complete this seemingly simple task. When added together, the overall administration of a key or card system is costly. Hands are not lost, stolen or forgotten. They also don't wear out or need to be replaced.”

Plus, biometrics are easy to administer, install and maintain. “Replacing card readers with biometric ones in many cases is simply an unplug-plug-and-play operation. It's also easy to control threshold levels, tightening access control in a nuclear power plant while loosening the level at a spa. This allows the facility to provide the appropriate balance of security and convenience for its application and end users,” Toscano continued.

Although there has been some recovery on a global scale in 2011, markets may only reach the 2008 revenue levels most probably next year,said Hans -Gernot Illig, CEO of SimonsVoss Technologies . “We estimated that in 2010, the global market for access control readers was approximately US$ 650 to 700 million. RFID-enabled access control readers accounted for an estimated 25 percent of that revenue, and biometric solutions should still be less than 20 percent of the market. However, it should be noted that the largest market still comprises out of other technologies, like proprietary active transponders. It is our observation that worldwide market segments, such as governmental, commercial and institutional, focus on a wide variety of technologies like secure active transponder and RFID technologies. In Asia, however, the market has an increased interest in biometric technologies.”

In Frost & Sullivan's APAC biometrics market analysis, related hardware revenues surpassed $165 million in 2009, and the regional market is estimated to reach $700.7 million in 2015.

The US government procurement process is “dysfunctional,” and the larger agencies in charge of making sure standards are completed and enforcements are done are dormant, criticized Brian Skiba, President of MaxID. “So US government spending is not a reliable source of business for anyone who is not a government contractor behemoth. Growth is coming from the private sector, driven by concerns on cost containment and risk mitigation, and from the rest of the world where governments are deploying identity solutions at a much more interesting pace.” [NextPage]

Vertical Focus
It can be expected that biometric usage in government services will grow continuously in the near future, said Irmantas Naujikas, Director of Business Development for Neurotechnology. “Civil registry, national ID, voting and border control are typical projects in which personal identification is needed. Biometric and multibiometric technologies ensure better identification of the person and, more importantly, ensure that the same person will not be enrolled several times in the system. For such applications, the reliability and speed of identification are critical.”

For Bio-Key, growth is coming from three areas: health care, retail and government. “Health care is leading the charge, mainly prompted by drivers such as compliance regulations,” Mahnken said. “Time and attendance and transaction tracking using biometric technology make retailers more efficient. The government is also a biometric customer. Just this past year, the FBI launched its new next-generation ID system, which includes our fingerprint software.”

The education market, especially colleges and universities, is a major user of biometrics, especially at recreation centers and residence halls, and on the entries to research laboratories and other areas containing high-value assets, Toscano added. Gaming is another area of focus. “Casinos typically place hand geometry readers at the main cage, at satellite cages and at ‘mantrap' areas, where individuals gain access with the hand reader are then additionally verified with a camera, and only then let through the door. At the slot operations area, a networked hand reader will tie into a key box, a key management system designed to prevent lost or stolen keys.”

Government and financial institutions are particularly visible on Fujitsu's radar. “Adoption rates of palm vein readers at government offices, banks, branches and ATMs have been quite high in the last year or so,” said Yutaka Katsumata, Senior Technology Director at the ATM and Branch Systems Group, Fujitsu Frontech.

The new kid on the block — cloud concept and related services — is also driving the use of biometrics. Large data center installations, such as at Bell South, Equinix, Google, IBM, Level 3, Microsoft, Qwest Communications, Siemens, XO Communications and Yahoo, use biometric hand readers at the entrance, on the security corridor and on the individual customer areas of their data centers, Toscano said. “Administration of the system is handled by software, which includes features tailored for this type of application like import/export and remote enrollment for multifacility management and expiring privileges for temporary access.”

Recent Advances
While there is no significant, brand-new breakthrough in biometric technology, advances have been made in read accuracy/speed balance and software sophistication.

“In particular, new subdermal scanners have greatly improved enrollment speed and success by negating the effects of poor skin or environmental conditions,” Kendall said. Multispectral technology is more accurate than optical fingerprint reading/matching, Skiba echoed. “We believe light-emitting sensor technology will be more tolerant of the environment (such as backlight) and a better, smaller form factor.”

Newer products have been designed to address growing speed and accuracy issues. “For example, our solution can match 100 million fingerprints or 200 million irises per second,” Naujikas said. “Accuracy is ensured by combining multimodal biometrics, such as fingerprint, face, iris and voice.”

In finger vein authentication, 1-to-N sequential fusion is now possible, to improve the speed and accuracy when ambiguities in read results arise and a second or third finger is required, said Yutaka Matsui, Finger Vein Solution Engineer for Security and Smart ID Solutions, Hitachi. “Finger vein authentication offers accuracy, speed, high availability and ease of use, and is proved difficult to counterfeit or clone.”

In palm vein authentication, false-acceptance rates can now reach 0.00008 percent. “Palm vein technology has cost advantages because the basic mechanism consists of camera technology and IR illumination technology, which are both progressing and readily available. Other advantages include nontraceable and contactless features, as well as reliable and intuitive operation,” Katsumata said. With hand geometry, one key to success in commercial applications is achieving an appropriate balance between the false-acceptance and false-rejection rates, Toscano said.

“That's why hand geometry is used in so many high-throughput applications, in which there is no time for a person to try over and over to get a read.”

In the case of iris scanners, high-performance models now provide the ability to accurately scan an iris from a greater distance and while the subject is moving, Kendall added.

The starting point for any back-end system is the ability to get a reliable and high-quality image, which requires sophisticated matching algorithms. For example, solutions now need to reach out to Windowsbased applications with a high degree of reliability and performance, to bridge data from desktops, time-and-attendance terminals, PoS kiosks and other devices, said Phil Scarfo, Senior VP of Worldwide Sales and Marketing, Lumidigm.

Software is by far the key differentiator, Skiba agreed. “Software enables different approaches to ease of use, transmission, aggregation of data and powerful analysis.”

Wireless transmission is another focus of development. “Rather than storing biometrics on a server and distributing them over a wired network, a contactless smart card-based system allows biometric templates to be carried by the card holder (match on card) or matched to a previously enrolled template by a trusted host application (match on host), offering a stronger level of authentication and security,” said Jordan Cullis, Sales Director of Identity and Access Management Solutions for Australia and New Zealand, HID Global (an Assa Abloy company). [NextPage]

Real Life
For establishments and facilities using biometrics, reliability issues are always front and center. “Take a hospital setting for instance. The repeated cleaning of the hands, dryness in some areas and wetness in others create demographic and environmental challenges for biometric sensors,” Scarfo said. “Nothing is more frustrating for a user or administrator than not being able to process a verification transaction simply because a user's finger was too moist or a bit dirty.”

Durability is another area that solution providers continue to improve upon. “Ruggedized devices for military and law enforcement markets have a much wider tolerance for temperatures and weather conditions to operate in, and have substantially more durable components to withstand impact and wear and tear,” Skiba said.

Future Apps
In “Mobile Phone Biometric Security Analysis and Forecasts 2011-2015,” Goode Intelligence forecasts that the current global user base of 4 million in 2011 is set to grow to 39 million users by 2015. And the key driver is probably affordability, as costs for parts and finished products have come down considerably, Matsui observed.

Biometric technology is also playing an increasingly important role in passport control, with a heavy emphasis on how it could help governments monitor and control access at borders, Cullis said. “Over the past decade, increasing concerns over national security have forced governments around the world to raise overall public safety profile by refining existing security policies and procedures. This has led to the advent of machine-readable passports, or e-passports, which contain a microchip with information (accessible through protected contactless technology) that aids agents in authenticating the identity of the passport holder based on encrypted biometric data.”

Additionally,according to Homeland Security Research, the fusion of video-based remote biometric and behavioral suspect detection will bring significant growth opportunities to video surveillance, biometric and IT system providers and system integrators. This new market (including systems sales, upgrades and postwarranty services) is forecasted to reach $3.2 billion by 2016, growing at a CAGR of 33 percent.

The future, thus, holds in solutions with advanced biometrics that create new, convenient life styles such as cardless transactions, while putting users at ease with identification and privacy issues, Katsumata envisioned.

American Supermarket Selects AxxonSoft for Theft Prevention

Editor / Provider: AxxonSoft | Updated: 12/20/2011 | Article type: Commercial Markets

Wakefern Food Corporation, the merchandising and distribution arm for ShopRite, is the largest retailer-owned cooperative in the United States, with locations throughout the Mid-Atlantic and Northeast region. Saker ShopRites owns and operates 27 supermarkets in New Jersey.

Retail grocery stores are challenged to maintain security surveillance over large spaces to reduce the risk of theft, and to capture video content with a high degree of detail. A typical store may have 50 cameras and some as many as 100 to adequately monitor activity. Recording and storing data can be costly. However, capturing high-quality video is essential in providing evidence for legal purposes.

Saker ShopRites is dedicated to implementing leading edge technologies and methodologies for ensuring loss prevention. Saker Loss Prevention worked with Axxon integration partner, Proactive Technology Solutions, to develop a sophisticated and cost-effective approach for monitoring security at their stores

For 20 years, Proactive Technology Solutions has delivered network integration solutions for retail stores, restaurants, schools and other high-traffic, consumer locations. Proactive has been exclusively focused on providing integrated video surveillance systems for over a decade. Beyond the capabilities of alarm companies that react to fire and burglary, Proactive specializes in creating systems that help to prevent or solve crimes.

Proactive's customized solutions for the retail food industry integrate the best of industry loss prevention standards and leading-edge video platforms. Recognizing the expanded capabilities of IP video technology, Proactive has led the migration of its clients from analog to IP video systems. In considering an IP video platform, Proactive selected Axxon Intellect for its specific benefits to retail installations.

Saker Loss Prevention has been a customer of Proactive Technology Solutions for five years. During this time, the company transitioned from buying and maintaining its own video surveillance equipment to leasing a complete system from Proactive. Leasing has been an effective operating solution for Saker Loss Prevention that allows the company to expense costs to each store and more easily upgrade technology, while lowering overall maintenance and support costs.

Forces That Are Shaping the Security Industry in 2012

Editor / Provider: The Editorial Team | Updated: 12/20/2011 | Article type: Hot Topics

As 2012 approaches, the world is watching as events unfold in Europe and the U.S. All industries are connected by the world of finance, and all people are affected by the global economic situation. What does shaky world finance mean for security? In this special feature, a&s discusses key market conditions, needs and drivers that are propelling industry movers and shakers to innovate, transform and adapt to a world of uncertainty and a possible second recession in just three years. The security markets in 2012 are being moved by two large trends: first, the need to protect in times of financial uncertainty; and second, a shifting focus from developed to emerging markets. For 2012, security industry players need to focus more on specific applications. Localized R&D and marketing may lead to more favorable results. IP will continue to boom, and channels will be affected, as more try to understand IP and join the movement. Industry players also need to look for the added value in their solutions — why should end users use your security offerings?

The biggest news item in recent months has been the turmoil within the E.U. Many concerns still remain about the economic situation and the future of Europe. In response to the eurozone crisis, there has been much talk about double-dip recessions and the long recovery ahead. Given the state of the global economy, the greater need to protect assets and the move toward emerging markets are two prevalent drivers behind the world of security.

Greater Perceived Need for Security
The security industry is known for its resilience during recessions because of continued security needs in times of financial uncertainty. During a recession, businesses, governments and households find it just as important, if not more important, to protect the assets that they already have. Following the financial turmoil in 2008, Navin Rajendra, Industry Analyst at Frost & Sullivan, noted, “During the last recession, many companies feared that many security projects would be delayed because of the financial crisis; however, these projects continued as planned. During such economic climates, we find that there is even more impetus for security projects globally.”

Protecting what you already have is important for two reasons in this financial climate. First, as the economy tightens, businesses will find it more difficult to earn money, making it all the more important to protect assets that are already in pocket. “While security pressures are greater now than ever before, resources continue to be limited. Improved security is no longer a want, but a mandated need,” said Balaji Srimoolanthan, Program Manager for Aerospace, Defense and Security, Frost & Sullivan. “Squeezing every bit of value out of your facility investments gets tougher by the day.”

Second, crime and events that endanger your assets are more likely to happen. “The higher concern with more unemployment makes retailers more concerned and gives rise to an increased need for security,” said Barry Shakespeare, MD of Norbain. “So, what you might call the bad times become, for different industries, the good times.”

There is evidence of increasing crime of late. KPMG, an audit, tax and advisory firm, conducts a biennial fraud and misconduct survey for Australia and New Zealand. In its 2010 report, following the global economic downturn, the company found that the total amount of money that had been lost due to fraud increased from US$301.1 million in 2008 to $345.4 million in 2010. A global retail theft barometer study also found that shrink was at its highest levels since 2007, up 6.6 percent from the previous year, and at a value of $119 billion worldwide. In addition to crime, the world has also seen an increase in social unrest. Demonstrations in Tunisia inspired political movements around the Arab world and the overthrowing of governments in Tunisia, Egypt and Libya. Though the causes behind these occurrences are complex, global economics and its role in unemployment rates and commodity prices have played a role. Similarly, the August riots that started in London and spread to other parts of the U.K. were affected by government spending cuts and youth unemployment.

Social unrest increases the perceived need for security. As Srimoolanthan put it, “Increasing numbers of terrorist threats, civil unrest and crime rates in Europe will lead to an increase in security spending. While the economic downturn has lead to cuts in defense spending, countries are seeing security investment as a way to proactively safeguard their nations and infrastructure against threats.”

Following the Arab Spring, Egypt has seen an increase of surveillance camera sales and installations, according to the Egyptian Gazette, a local newspaper. In London, burgeoning discussions about privacy rights have been quelled with greater acceptance of video surveillance since the riots. A survey by a member of the British Security Industry Association found that 76 percent of the individuals surveyed feel safer knowing that video surveillance is in operation in public areas, and 62 percent of the respondents suggested they would actually like to see more surveillance in their local area.

Though it is difficult to predict events of social unrest, it changes how security players prepare for the future. “We are seeing, as a result of these different types of incidents, that these agencies are being more proactive in planning and financing more projects, so that they have a higher level of readiness,” said Debjit Das, VP of Marketing, Verint Systems.

Preparing for these risks is part of what is going to drive the security markets forward in 2012. Both Frost & Sullivan and Memoori believe that the global security market will continue to grow over the next five years. Memoori indicates that the security markets are resilient and demand will edge forward at a CAGR of 3.7 percent over the next five-year period. Gary Wong, Senior Research Analyst at IMS Research, agreed, “Even if Greece (or any of the other weaker eurozone members) defaults, we believe that security (more accurately, spending on security) will continue to grow.” [NextPage]

Moving To ward Emerging Markets
On a macroeconomic level, financial uncertainty is also driving security players to different regional markets. Debt troubles in developed countries draw sharp contrast to the strong growth levels found in emerging markets. The World Bank's “Global Development Horizons 2011 — Multipolarity” report predicts long-term growth to focus on the emerging markets. “As a group, emerging economies will grow on average by 4.7 percent a year between 2011 and 2025. Advanced economies, meanwhile, are forecast to grow by 2.3 percent over the same period.” 2012 will be a step in that long-term direction. The International Monetary Fund's (IMF) most recent World Economic Outlook states that they forecast world growth to be at 4 percent for the end of 2011, moving into 2012, though inequitably distributed. “For 2011, we see growth of 6.4 percent for emerging economies, which is a good number, but only 1.6 percent for advanced ones.”

This dichotomous world view of developed versus developing markets is to be seen in security as well. Traditionally, the U.S. and Western Europe, and especially the U.K., have been the strongholds. However, given that they are more mature markets, most end-users already have security products deployed. Add that to troubling national debt levels that may affect banking institutions, lending and new construction, and it appears that the developed markets will have less opportunity in 2012.

In security, some players are looking to mitigate risk by increasing focus on the emerging markets, like those in Asia and Latin America. China's enormous potential is enticing investors and businesses, despite some uncertainty. (For a more in-depth look at Asia and China, please refer to the box.) Growth in emerging markets is up and has been the driving force behind global growth in recent years. John Davies, MD of TDSi, talked about TDSi's decision to focus on China and the Middle East, and push into new markets in West Africa and South East Asia. “We look at per capita GDP numbers as an indicator for the readiness of a market to invest in electronic security systems as well as the growth in GDP.”

Since emerging markets have less penetration of security systems, the market potential is much larger than in developed markets. Regarding the global electronic access control systems market, Global Industry Analysts said in prepared statement, “Though developed markets such as Europe and North America have been the traditional revenue contributors in the market, developing markets such as APAC, Latin America and the Middle East are expected to turbo-charge future growth.”

This trend is reflected in the market sizes and growth rates of products in different regions. Since 2010, we see consistently that the Americas have the highest current market size, followed by EMEA and finally APAC, but the reverse is true when we look at the growth rates. The growth rates show APAC growing faster than EMEA and the Americas, especially in the video surveillance market, where APAC is growing at 14.8 percent versus 5.7 percent in EMEA and 9.5 percent in the Americas. This trend is projected to continue in 2012.

While developed countries are not growing as quickly, it does not mean that their markets will disappear. In fact, access control markets are forecasted to exhibit healthy growth in the Americas in 2012. Also, purely based on market size, Asia is still nowhere near as large as EMEA or the Americas. “Geographically, Europe and North America will continue to drive growth in security,”Srimoolanthan said.

By the same token, that does not mean that developing economies are immune from the troubles in the eurozone. Given that our world has become increasingly interconnected, continuing troubles in the eurozone will affect other regions, including emerging markets, according to the IMF's World Economic Outlook. “They're not at the center of the action at this point, but they are clearly affected by it. So far, they have been largely immune to these adverse developments. They have had to deal with volatile capital flows, but in general have continued to sustain high growth.”

An interesting by-product of this move to emerging markets is higher price sensitivity in security. “The margin game is getting tougher in emerging markets like Southeast Asia and Latin America,” said Ken Li, President of Asia Security Technology. Das agreed. “Emerging markets, including India, China, Taiwan and Southeast Asia, are quite price-sensitive compared to what you would experience in America.”

In the search for lower prices, Joe Qiu, Overseas Business Director for TVT Digital Technology, reminds us that quality should not be sacrificed. “We are seeing more Tier-2/3 players whose product quality and reliability are really shady. Our stance on quality is nonnegotiable.”

The need to keep people and their assets secure will help keep security markets buoyant in 2012, but the security markets will differ across regions, given the pressures of global economics. Many big players currently have their eye on the potential of certain emerging markets. What does this mean for different product markets in security? Turn to the next article in our 2012 Preview series for more.

March Networks Upgrades US Retail Store for $16 Million

Editor / Provider: March Networks | Updated: 11/25/2011 | Article type: Commercial Markets

March Networks, a global provider of intelligent IP video solutions, announced that it received orders totaling $16 million from an existing retail customer for hybrid network video recorders (NVRs) and associated extended warranty. The retailer selected the NVRs as part of an ongoing NVR and software upgrade program in its U.S. stores and membership warehouses. The Company expects to ship all of the units and recognize approximately $14 million in revenue from these orders in its third fiscal quarter, which ends on January 31, 2012. These orders support the Company's growth outlook for the second half of fiscal 2012 as set out in our financial update release of today's date.

"We have been working with this customer over the past year on an upgrade program and we are excited to be moving forward,” said Peter Strom, President and CEO. “The magnitude of these orders demonstrates the confidence that our large enterprise customers continue to put in March Networks as a partner. With over 130,000 systems deployed worldwide, we continue to work with existing customers on upgrade programs by finding innovative ways to leverage their video systems to enhance in-store or branch operations."

The retailer is currently using 30,000 March Networks recording systems and Visual Intelligence software in its U.S. retail operations to enhance customer and employee safety and reduce losses from retail shrinkage. Fraud, theft and other shrinkage cost the retail industry an estimated $37.1 billion in 2010, up from $33.5 billion in 2009 (National Retail Security Survey, 2011).

The new hybrid NVRs will provide the retailer with access to significant software improvements, including a consolidated live monitoring and archive searching application, and higher-quality video evidence that can be accessed quickly from any networked location. They can also be rapidly installed and serviced due to compatibility with an innovative docking station design (watch the video) that has helped distinguish March Networks systems in the industry.

Product Management Puts Customers First, Not Profits

Editor / Provider: a&s International | Updated: 11/24/2011 | Article type: Hot Topics

New development is the focus of product management, delivering solutions that serve market needs. It should not fixate on profitability. a&s looks at identifying customer problems, incorporating changes and future scalability throughout the product life cycle.

Dreaming up a product requires creativity, as well as teamwork. Innovation rarely takes place in a vacuum, requiring effort to delve into market needs. After careful consideration, those customer issues are then translated into a finished solution.

Product management covers the entire product life cycle, but the main focus is on driving new product development. A differentiated product that delivers unique benefits and value to customers will make it a successful and profitable one. Too often, though, profitability becomes the top priority, resulting in poorly thought-out product launches that have little differentiation or do not offer a migration path for existing equipment.

There is nothing wrong with wanting to stay afloat, but good product management goes beyond making a quick buck. Product managers should have an in-depth understanding of customer problems to develop a solution that meets or exceeds their expectations. Generating ROI is important, but is not the ultimate goal of product management.

Once the solution nears completion, a marketing plan ensures that the sales team, channel partners and end customers are aware of it. After the product launch, the product manager can monitor market changes and adjust the next release accordingly.

Catering to Needs
Product management boils down to being in touch with the market. A manufacturer will gather input from system integrators and distributors. End users are also consulted, either through events at trade shows or site visits. Product managers need to conduct due diligence before sitting down with R&D to discuss specs.

Understanding market acceptance requires maintaining good two-way communication with channel partners and end users who are using the solution. “Besides reviewing market research reports, product managers must be externally focused to understand the voice of the customer, to the point that they must be closer to the customer and accompany the sales team on customer calls and end-user demonstrations,” said Daniel Cremins, PM of March Networks. “In some cases, the customers themselves have a hard time describing what solution they really want, and a site visit to the end user is required to document use cases on their day-to-day activities. Market analysis, competitive environment and understanding who the target audience is shape what the solution will be.”

Customer feedback includes product ease of use, installability and reliability. Product managers then separate the “must-have” requests from “nice-to-haves,” based on their marketplace understanding, Cremins said.

After understanding customer needs, the sales team can determine whether a business case can be made for specific requests. “Our very experienced local sales teams help us quantify the true size of market for each new product and what the respective price point should be,” said Peter Ainsworth, Senior PM, Europe, Samsung Techwin. “The solution to minimizing the wastage of R&D funds should be very simple — to listen very carefully to the opinions of the people who really ‘know' and that is the installers and system integrators who are the closest to the end users.”

Understanding business initiatives help pinpoint weak points in the customer's operations. “For example, a retailer might need a solution to measure customer footfall or customer dwell time,” said Andrew Pigram, Technical Director at Norbain. “We've helped design systems for a large car manufacturer, who wanted the service managers to be texted as a customer was driving into the premises for a car service. So we put in a VIP LPR system linked to the service-booking system for their retail outlets. It could be any interested party; the higher up the chain, the better for us. That's where you get good ideas.”

Getting feedback means regular meetings among distributors, integrators, manufacturers and end users. While not everyone meets at the same time, different events — product demonstrations, training seminars and site visits — cater to specific needs. “We have quarterly meetings with product management, sales and major suppliers,” Pigram said. “We work with them on that to get a lot of feedback, and then they can come to our sales meetings as well.”

Product managers can visit an average of three end users per month. “Once on site, the visit is typically at least half the day, to spend the necessary time with the customer to understand their needs and day-to-day operations,” Cremins said.

The supplier's product management team will also train distributors and customers on their latest solutions and find out about market requirements, Ainsworth said. [NextPage]
Making the Distributor Cut
Product management from the distributor perspective does consider end-user demand, along with regional factors. “The supplier has to provide a solution that is good for our customer base; it has to add value to our installer solutions and be a good fit for the market,” Pigram said. “Product management is not just about products — it's really about the market.”

Along with identifying a market niche, a manufacturer needs to provide market support to its channel partners, such as marketing and demand generation. Services such as presales support are needed, as well as postsales support, depending on how technical the products are. “As a distributor, we can help provide many of these services, but it's important to engage well with the supplier, especially if it's an overseas supplier,” Pigram said.

Depending on the vendor, distributors may provide their local training and support, or just help with logistics. Each vendor has different requirements, meaning each party discusses their expectations early on.

Lastly, there needs to be a financial incentive for a distributor to take on a new supplier. Price point is one factor, along with a clear product management strategy. “The product and supplier have to be financially sustainable for us,” Pigram said. “Their proposition has to be a good fit with our long-term strategy. We don't want a manufacturer that chops and changes direction. We need them to be reliable for supply and focus on our market.” Norbain has significant reach in the U.K., serving 5,000 customers. Of those customers, 80 percent of them have done business with Norbain for more than five years. “We feel our investment and our customers' investment should last years, certainly not weeks,” Pigram said. 

Out of Stock
A product's end of life (EOL) must figure into product management. While it is inevitable that wear and tear will require replacing a product, a long-term migration plan eases the transition from old to new.

Microsoft is a textbook example of user frustration for EOL management. Its Windows 98 operating system was scheduled to sunset in 2006 — subsequent software releases of Microsoft Office 2007 did not support Windows 98, requiring users to upgrade. These upgrades create backlash, particularly “forklift” ones that made customers feel cheated.

Obviously, the hardware life cycle differs from software. It depends on spare parts, as availability affects price. Once parts can no longer be supplied — often after production ends for a certain line — the cost increases. Product EOL planning should consider enhancements, cost reductions and new target markets, Cremins said.

A discontinued product line results in one of two things. First, the vendor is replaced with a comparable and compatible third-party product. Another option is to go with the original maker's succeeding solution. “Most manufacturers do this pretty well, because any popular product is normally superseded with a better-performing product,” Pigram said.

Analog video surveillance equipment is relatively simple to upgrade. “You could replace the DVR or switch a functional dome or fixed camera in the majority of cases,” Pigram said.

IP-based solutions offer benefits over analog, but represent a significant investment for users with legacy equipment. “It's inevitable that demand for IP-based systems will continue to grow, but that does not mean that all existing analog systems are outdated and need to be replaced,” Ainsworth said. “We are, therefore, continuing to support analog-based systems and provide users with the option, for example, of hybrid solutions.” Another option is HD-SDI cameras, offering full HD video over analog cabling.

IP replacements are trickier due to compatibility issues, which require interoperability testing. “The good news is many VMS solutions are software-based, so that installers can add, change or replace products or brands as upgrades,” Pigram said. “That's one of the benefits of more software-based solutions with maintenance agreements.” Product migration is always painful, but thoughtful product management can make the transition easier with successive improvements.

Future-Proof
Forward scalability means product management has done its job. From the product's inception to its EOL, a long-term mindset translates into a better rapport with channel partners and customers. A few ways to offset future replacement headaches are developing a migration path, forming third-party partnerships and complying with standards.

Staying abreast of technology developments is one way to develop products with migration in mind. This can be anything, from the rise of smartphones in the consumer space to the potential of the cloud for IT applications. “Video surveillance has always taken core technology from other industries,” Pigram said. “It's quite different to understand technology and to deliver solutions. IT may have technology, but video surveillance applies it quite differently. The technology is not different, but the pace of change is quite fast.”

Strategic partnerships will further extend a product's shelf life. This can be hardware manufacturers supporting key VMS platforms, or other partnerships that are mutually beneficial. These relationships ensure customers can invest in a video surveillance system that can be expanded or upgraded with new technologies in the future, Ainsworth said.

Interoperability standards are the next level of partnerships, creating a guideline for members to observe. While the present iteration of standards is imperfect, the dominance of ONVIF is notable for its sheer numbers. It does not support all member features and is presently limited to display, but it is a welcome alternative to no standard at all. “Samsung is a member of ONVIF, and we fully support its objective of providing customers with a flexible choice,” Ainsworth said.

At the end of the day, product management comes back to market needs. “Being able to offer a migration path requires a full understanding of the overall customer application in how they are deploying solutions today and what they will want tomorrow,” Cremins said. “It requires developing a full, end-to-end solution that is backward compatible and can easily be integrated into. Our experience has been that customers maintain solutions for years but still want to be able to add on new solutions and have them all work together seamlessly.”

Product management is a holistic approach to assessing customer problems, solving them and then phasing in improvements once products reach their expiry date. The top priority is always delivering solutions with real value.

Sports Retailer Selects Mobile Surveillance

Editor / Provider: mobiDEOS | Updated: 11/7/2011 | Article type: Commercial Markets

Video surveillance and remote monitoring company mobiDEOS announces that Summit Sports, a Michigan-based outdoor recreation and sporting goods retailer, is now using MobileCamViewer to monitor activity at its 50,000-square-foot distribution and receiving center in the Auburn Hills area.

Summit Sports operates five retail locations and ten websites — all serviced through the company's Auburn Hills facility. The facility stores valuable sports merchandise and is consistently monitored for intrusions and unusual occurrences through onsite and mobile surveillance.

Craig Burns, warehouse operations manager for Summit Sports, notes that MobileCamViewer has saved many personal late-night trips and police visits for security-related events. Burns uses the MobileCamViewer application on his Verizon HTC Incredible 2 smart phone to monitor 32 cameras and two digital video recording (DVR) systems.

“It's hard to put an exact number on it, but MobileCamViewer has saved us a lot of time and money,” said Burns. “I have a 90-minute round trip to the warehouse, and MobileCamViewer has eliminated many trips to the building in the middle of the night to inspect false alarms.”

Burns added that he recently used the application to prevent his alarm company from dispatching the police to the warehouse one Saturday afternoon while on vacation in Florida.

The open-platform nature of MobileCamViewer has helped Summit Sports minimize the costs of launching a mobile surveillance system. The application works across all 32 cameras installed on the warehouse property, proving compatibility with an array of vendors.

MobileCamViewer offers secure, reliable carrier-grade cell phone-based video surveillance and remote monitoring solutions, providing “anytime, anywhere” mobile surveillance for virtually every situation. Its compatibility across almost all smartphones, tablets, cameras, DVRs, NVRs and video servers — as well as simple integration with PC and MAC-based iOS systems — enables MobileCamViewer to comply with both new and existing network infrastructures.

Self-Serve Yogurt Chain Relies on Fingerprint Biometrics from DigitalPersona

Editor / Provider: DigitalPersona | Updated: 11/3/2011 | Article type: Commercial Markets

DigitalPersona, a global provider of authentication and endpoint protection solutions, announced Yogurtland restaurants across the U.S., Mexico and Guam are addressing Payment Card Industry (PCI) compliance requirements and reducing payroll fraud with DigitalPersona fingerprint biometrics.

DigitalPersona Fingerprint Readers eliminate the need for franchise managers to remember constantly-changing login passwords at each store location, and also help eliminate buddy punching by employees. This increases operational efficiency and reduces costs at Yogurtland locations.

Employees at Yogurtland previously used 4-digit PIN codes at point-of-sale terminals to access time-and-attendance and POS systems, while managers used swipe cards for override authorizations. One of the biggest operational challenges was complying with the PCI Data Security Standards requirement to change a user's complex password every 90 days. Franchisee managers and owners with multiple locations found it difficult to remember the changing passwords, as not all of their stores would change passwords at the same time requiring managers to remember multiple complex passwords. Forgotten passwords resulted in frequent calls to IT support at all hours of the day. By using Fingerprint Readers with their Micros Systems, point of sale software, managers and owners do not need to remember complex passwords which are different for each location. They simply needed to touch the fingerprint reader to release the password.

“I've had the opportunity to use DigitalPersona's fingerprint solutions in a variety of other retail and POS businesses, and knew they were a perfect fit for addressing our needs at Yogurtland,” said Phil Olea, director of technology at Yogurtland. “Fingerprint readers give you an irrefutable proof of identity and ensure that employees aren't clocking in and out for each other, and that only our managers have the ability to approve voids, discounts and overrides. Our employees were happy to get rid of their PINs andswipe cards, and seem to love that we are using cool, modern technology in our stores.”

DigitalPersona Fingerprint Readers have been integrated into more than 90 percent of the biometrically-enabled POS systems in the U.S. and are supported by a variety of commercial POS applications. DigitalPersona fingerprint readers enable restaurants and retailers to transition away from swipe cards and PINs, which can be easily lost, stolen or shared. In contrast, biometrics ties individuals to the actions they perform, providing a powerful deterrent to time-and-attendance and management-override fraud. Fingerprint biometrics also makes it easier for businesses to address the stringent PCI mandates for strong identity security controls and can improve productivity, as well as customer response times, by simplifying and speedingup system login.

"In the past, passwords and PIN codes were good enough, but today, PCI compliance mandates are forcing restaurateurs and retailers to significantly strengthen the security used to ensure only authorized employees access applications," said Jim Fulton, VP of DigitalPersona. "DigitalPersona's fingerprint readers make it simple for businesses to secure access to their POS systems and save money at the same time. Often, adding biometrics can pay for itself within a month by reducing theft and fraud."

Security Systems: Controlling Losses and Increasing Profits for Retailers

Editor / Provider: Arecont Vision, Axis Communcations, Envysion and UTC Fire & Security | Updated: 10/18/2011 | Article type: Commercial Markets

Retailers often deal with theft and fraud losses that security systems now help to target.

Megapixel Cameras Protect Mercedes-Benz Dealer's Inventory
Over the years , a Florid a Mercedes-Benz dealership has had several of its luxury vehicles stolen from their facility, as well as thefts of accessories, wheels and tires, according to Michael Brown, owner of Mercedes-Benz of South Orlando. The dealership installed an analog video system, but the system did little to thwart theft due to its limited resolution and inadequate nighttime viewing capabilities. Additionally, Brown wanted to use the video system to help manage operations by keeping track of staff, customers and vehicles throughout the dealership facility and grounds.

Mercedes-Benz of South Orlando turned to United Security Alliance, an integrator of video surveillance and access control systems, to design and install a new video surveillance solution that they could rely on. United Security Alliance installed 35 Arecont Vision cameras inside and outside the facility. The new system provides 24-hour surveillance of the premises with remote monitoring capabilities for surveillance afterhours, according to Terry Ottinger, President of United Security Alliance. The Arecont Vision cameras provide United Security Alliance personnel with high-resolution images capable of capturing minute details like license plate numbers as well as providing reliable operation, which assures continuous surveillance while eliminating most service calls.

The higher resolution and superior picture quality under all lighting conditions provided by Arecont Vision's megapixel cameras enables comprehensive coverage of the entire facility using far fewer cameras compared to conventional or analog cameras.

The Arecont Vision megapixel network cameras were integrated with the VMS from Geutebruck, a German digital video supplier. Video analytics include motion detection which automatically alerts United Security Alliance security personnel in the event anyone enters the dealership's grounds after hours.

Ottinger stated that installation of the system and Arecont Vision megapixel cameras went extremely smoothly. Arecont Vision collaborates with NVR suppliers such as Geutebruck to ensure smooth integration of systems. Arecont Vision also works with technology partners to streamline the integration of complementary systems products such as servers and related edge devices.

Nine Shopping controls and registers access in real time
Located in Buenos Aires, Argentina, the main activity of Nine Shopping Center is commercial; it has approximately 80 tenants distributed in different areas, movie theaters, a food court, and open and underground parking lots. The center operates nearly every day of the year. Monitoring and controlling such spaces during the operating schedule requires an important amount of security staff, which makes this expense difficult to address. Nine Shopping considered it necessary to control and register all vehicle accesses, the parking area and aisles with a video surveillance system.

Cámaras Overnet executed the project, which was developed in 2010, and proposed a solution with Axis Communications IP video products with both fixed and dome cameras. In each parking area and access, they performed a preinstallation study to determine the surveillance points, and analyzed the current network and the required infrastructure. After choosing the equipment, they proceeded with the implementation and commissioning phase, and performed training sessions about the use of the solution.

With the provision and installation of Axis network cameras, the Center achieved visual control of access and parking lots and now, all actions occurring in the parking lot and aisles can be recorded. Nine Shopping can monitor events that affect the security in access, perimeter and parking areas, perform video surveillance from a central monitoring room and have remote access to images from different locations. Also, cameras become an additional dissuasive element that complements other security systems and the system allows access to the recorded image files when necessary for security audits.

Based on an open architecture, the solution installed by Cámaras Overnet supports new improvements and upgrades. In this sense, three extension stages have been outlined for 2011: installation of cameras in storefronts, movie theaters, and the food court. The Center expects to add approximately 60 cameras in the near future. [NextPage]

Garden Fresh Restaurant SAVES TIME AND MONEY WITH HOSTED VIDEO
After rolling out a PoS system, Garden Fresh Restaurant realized they needed the visual context behind the transactions to fully understand the data and guard against shrink. With a significant number of daily cash transactions, Garden Fresh knew that without concerted loss prevention efforts, theft and fraud could diminish profits.

Wanting to capitalize on the benefits of video-PoS integration, Garden Fresh deployed Envysion Insight, a MVaaS solution designed to help customers drive loss prevention efforts and increase profitability. MVaaS was adopted with modest capital investment and minimal IT, and was able to generate exceptionbased reports to highlight suspicious trends across stores and alert management of potentially fraudulent transactions such as voids, returns discounts and coupons. Also, Garden Fresh could now see the visual context behind each PoS transaction. Other benefits included remote access to restaurants nationwide, and increased efficiency due to elimination of tedious manual searching.

Within three months, Garden Fresh saw an increase in average gross profit of more than US$920 per site, per month, partially due to the decrease in customer discounts (an average of 6.8 percent decrease) and a reduction in guest comps (an average of 5.5 percent). In less than six months, Garden Fresh was able recoup initial security costs. “Assuming we see those results as we roll out the Envysion solution across our locations, the impact could add up to millions of dollars per year,” said Jamie Knight, Director of Asset Protection.

German Electronics Retailer Relies on Comprehensive UTC Fire & Security Solution
Media Markt and Saturn, under the roof of Media-Saturn-Holding (MSH), are large retailers for consumer electronics in Germany and the rest of Europe. Driven by the nature of their business but also by their strong and continued international expansion, MSH is always on the lookout for partners that can provide a standardized solution — one that meets their high security demands, but that is flexible enough to adapt to country specific requirements. Bringing an international coverage and high-quality solutions to the table, UTC Fire & Security was a good security partner for MSH to work with — a company that could provide standardized systems in multiple countries while fully complying with all local security regulations. After a series of discussions and defining requirements, the close cooperation between UTC Fire & Security and MSH was confirmed by means of an EMEA-wide cooperation agreement.

Prior to the formalized cooperation with MSH, UTC Fire & Security products were already selected to deliver the intrusion detection system for MSH stores in some countries. With this more proactive partnership, MSH will use the UTC Fire & Security solutions for intrusion detection, video surveillance, access control and sometimes fire detection for new sites in all countries. Although each store may be different in architecture and size, the security system based on UTC Fire & Security's product portfolio is easily adaptable, scalable and will be specified according to local requirements, respecting the overall system concept and design and using the same UTC Fire & Security technology platform. It is this approach towards standardization together with the close central and local cooperation with UTC Fire & Security that will continue to drive efficiency and cost-effectiveness for MSH for the future

Tailored Solutions Cater to Shopper Needs

Editor / Provider: a&s International | Updated: 10/18/2011 | Article type: Commercial Markets

Designing a retail solution depends on the nature of the business. We look at how security is implemented differently in apparel stores, electronics chains, fast-food restaurants and convenience stores. Finally, the future of retail lies in networked solutions, particularly the cloud.

Shopping behavior has changed. Stores are becoming showrooms for consumers to flip through the hottest novels, then hunt online for the best deals. The fall of US book megastore Borders demonstrates retail must cater to Web-savvy buyers. The business of retail is open access for shoppers. Security cannot interfere with sales. “The difference has to be driving business efficiencies,” said Patrick Lim, Director of Sales and Marketing, Ademco Far East. “A common method of ROI measurement would be to use value of goods stolen before and after a system is in place. However, that is quite subjective between a supermarket and a jewelry store, where the size of the crowd and average value of goods is vastly different.”

A solution must serve user needs. If a retailer only focuses on cheap solutions, it will not see robust performance, said Jun Zhou, Industry Account Manager for Hikvision Digital Technology.

Integrated security working in concert with business systems yields greater benefits. “The high-end solution comprises an integral concept in which all security systems complement each other or constitute components of one solution that are also required for other solutions,” said Klaus Lienland, Business Development for Bosch Security Systems. “This significantly reduces installation costs, line network expenditure and frictional losses between elements.”

Retailers come in many forms and with unique needs. High-end apparel and high-value electronics require asset tracking. On the other end of the spectrum, eateries such as quickserve restaurants (QSRs) emphasize efficiency.

Integration Roadblocks
Retailers may balk at security if they have a large investment in existing equipment. “If everyone built new stores and didn't have legacy products, it would be different,” said Jim Shepherd, National Account Manager at Protection One. “But most retailers have legacy products, which you have to breathe life into and maintain. Retail has become a hybrid investment, where they continue to support the legacy equipment and migrate portions to IP when it makes sense.”

Equipment vendors must provide a migration path for legacy solutions. “What that means for a retailer is there is no need to forklift products and throw stuff out,” said Kostas Mellos, Commercial Leader for Video and Transmission for Interlogix, UTC Fire & Security. “A DVR sooner or later is going to outlive its usefulness. It's better to have a plan of migration, rather than having a failure one day and trying to deal with that.”

Each retailer has unique concerns and equipment, making integration challenging. “Probably the most interesting aspect is to interface with existing systems,” said Tom Coyle, VP of Information Solutions for Avery Dennison. “The nice thing is standards have come a long way. Now there are brokering systems that enhance the connectivity between systems. It's not simple to construct these interfaces, but it's much simpler than it was 10 years ago.”

Bringing together old and new systems includes supporting pointof- sale (PoS) management, access control, alarm monitoring and HVAC. “It doesn't matter how many bells and whistles a technology has if those features do not add value to the customer,” said Matt Steinfort, President and CEO of Envysion.

However, integration is easier said than done. “Integration is hard because everyone does the fingerpointing game and says it's someone else's problem,” Shepherd said.

Understanding Technology
New solutions promise to ease old pains, but vendors usually oversell products. While each technology does specific things well, an isolated system will be limited.

RFID has increased uptake, as it improves business processes, said Frost & Sullivan in its “RFID in the Apparel Industry” report. Performance factors will determine the success of a deployment, such as write rates and read rates. “With write rates gaining prominence, the need to store more data in RFID chips is expected to emerge,” the report found.

Unfortunately, RFID in electronic article surveillance (EAS) can be easily defeated on its own, Lim said. This requires a secondary verification, which is usually done through video. Coyle added, “An EAS tag effectively provides a narrow functionality, sounding an alarm at the doorway. However, these EAS technologies do not provide an exact identifier for each product and store managers don't know the identity of the specific items that were stolen.”

Limited Intelligence
Intelligent video analysis has gotten a bad name, particularly for people counting. “Many people have the wrong impression that they can use the same camera for video recording and analysis,” said Wallace Ma, CMO for TeleEye. “Sometimes customers don't fully understand the technical constraints.”

Camera angles and calibration affect results, as well as retailer satisfaction. For accurate counts, other sensors can provide verification for analytics, Ma said. [NextPage]

Apparel
Shoppers can sample music online, but there's no way to virtually try a shoe on. Item tagging in apparel provides valuable inventory information while also securing merchandise. “The adoption of RFID is expected to have a significant impact on various business processes within the apparel industry,” said Frost & Sullivan in its report.

The benefit of RFID is multiplied for efficiency. “If you focus on the security piece, the security is boosted with RFID in place — not just in the store but along the chain,” Coyle said. “You pay for one capability and get many things, possibly including inventory accuracy, loss prevention, an enhanced customer experience, improved marketing and more.”

As apparel stores are designed to be inviting, security equipment should be discreet. “Products such as cameras should get smaller, not only to lower power consumption, but also to match the interior of the retail shops easily,” said Iida Atsushi, Manager of Security Solutions, APAC Professional Solutions, Sony Electronics. “Therefore an industriallooking camera would not match from an aesthetics point of view.”

While cameras are shrinking, HD imaging is booming. A shopping mall in the Philippines replaced SD analog cameras with HD ones and improved identification. “They found the video is clearer and gives them more information for management and security applications,” Ma said.

High resolution and frame rate strengthen identification. “There are many powerful camera lenses out there that can show you exactly how the target looks, but without a high frame rate capacity of at least 60 fps, it isn't easy to capture the moment the thief puts the item into his bag,” said William Ku, Director of Brand Business for Vivotek. “Without footage of that specific scene, the store would have a hard time proving it in court, not to mention prosecuting the criminal.”

A frequent selling point for HD or megapixel is that a single camera can replace multiple SD ones. While the exact amount differs, wide areas of a store would benefit from higher resolution, such as the checkout zone or stockroom. “Megapixel cameras yield greater ROI than conventional cameras in the long run and in many cases immediately,” said Becky Zhou, APAC Sales Director for Arecont Vision. “There are also operational benefits in a retail owner's ability to view the store remotely to ensure that customers are being served in a timely manner or that employees are being honest.”

However, bandwidth constraints will limit how megapixel video is transmitted. “A 10-megapixel camera may replace five other cameras, but vendors leave out the part that it uses so much of the pipeline that it's not even usable remotely,” Shepherd said. “Retailers cannot afford to invest in the network. Some operate off DSL and there's no way to put a megapixel camera on that.”

Video produces incredible amounts of data , as megapixel increases data three- or fourfold. “For large stores with 30 to 40 cameras, it doesn't make sense to constantly transmit the video to a central location,” Mellos said. “We advise people to leave the video in the store, usually in IT closets and transmit or search for data needed.”

Transmission data that has priority over video include panic or fire signals, as well as business data. “PoS is either sent in real time, or daily or nightly,” Mellos said.

Electronics
Big-box retailers for consumer electronics boast the latest gadgets. While the customer experience is hands-on like apparel, merchandise cannot leave the display. “As demonstrated by numerous consumer studies, open display and availability of merchandise at all times have a positive impact on increasing retail sales,” said Steve Sell, VP of Global Marketing for Checkpoint Systems. “We are working very closely together with consumer packaged goods companies and retailers in developing solutions which can open up displays as much as possible.”

For an electronics retailer, sample products need to be accessible to shoppers. “We are living in a new era now and consumer experience is all that counts,” Sell said. “Imagine if retailers lock expensive high-theft merchandise into cabinets — of course there will be no shrink but sales will be largely reduced.”

A study of big-box retailers Target and Best Buy exemplify differences in their security approaches. Both sell popular Apple devices, but Target locks them away, while Best Buy does not. “Best Buy outsells Target for iPhones and iPads, because the consumer does not want to wait for someone to unlock the display case,” Shepherd said. “It goes back to understanding customers and how to impact shrink without impacting sales.”

Most large chains have a management-based plan for each store. “When a store gets secured by whatever way — be it video surveillance, intrusion or access control — the loss prevention personnel will get a good sense of how the store is doing from a shrinkage perspective,” Mellos said. “They use a significant amount of data monitoring internally to understand where shrinkage comes from and then take the appropriate actions.”

National retailers look at data in terms of value, rather than petty crime statistics. “They don't spend a lot of time on capturing criminals,” Shepherd said. “Retailers are moving from being reactive to proactive.”

QSRs
The QSR segment does not require item-level tagging — value meals do not generate the same margins as luxury handbags. Instead, efficiency is the key metric for casual dining establishments. “By The Rockies had been testing video surveillance in a subset of our locations, and we decided to capitalize on the opportunity to drive profitability improvements by integrating video with our PoS system at all of our locations,” said Mike Davis, Loss Prevention Manager. “We started by carefully investigating a variety of video surveillance offerings, and we narrowed it down to two providers.” It deploys a hosted video solution from Envysion, which was among the two options tested.

Field tests provide retailers with a better understanding of how security can bolster their business. “We work with a retailer's finance team to align on the key metrics that matter to the organization, whether it is reduced loss, improved sales conversions or lower costs of goods sold,” Steinfort said. “Then we track these metrics and measure them against both the store's performance before it implemented Envysion and a control group to filter out economic and seasonal variables that can impact a store's performance.”

This side-by-side comparison gives retailers hard data on security benefits. In customer pilots, ROI averaged 844 percent, with some retailers seeing ROI of up to 2,500 percent, Steinfort said.

Security reports can gather relevant store data, as QSR chains operate across many locations. “A major part of our requirements was a robust and customizable reporting capability that integrated our PoS data to video,” Davis said. “We also needed an easy-to-use, single system to view video and PoS data. With more than 100 locations, we didn't have time to log into each restaurant's DVR separately to review the footage and then log into a separate system to view the PoS information.”

Effective video-PoS integration prevents and detects employee theft or carelessness. “However, to render such a solution realistic and functional, a highly complex interface is required for communications between the cash register and other technologies,” Ku said. “A system is still needed at every branch for a chain with multiple locations.”

By The Rockies was able to use video-PoS integration to identify and reduce fraudulent transactions, such as fabricated voids, refunds, discounts and comps. “As a result, we're realizing a cash impact of thousands of dollars per month per location,” Davis said. “In some of our restaurants we have also deployed audio recording. This has been tremendously helpful in validating HR claims of sexual harassment and customer complaints.”

Convenience Stores
Large chains such as 7-11 will deploy security for operations, such as alarm monitoring at high-risk stores. “A lot of our customers in the U.K. and South Africa set up security in their retail shops for video surveillance, alarms and panic buttons,” Ma said. “If there's a robbery incident, the people in the store can press a button and trigger the DVR to signal the video response center or monitoring center. Then the operator at the video response center can receive the alarm and see the live situation at the customer's premises.” [NextPage]

Real-World Solutions
While technology can work wonders, some retailers have unrealistic expectations. “Everything is possible if the funding is there,” Mellos said. “But sometimes, what we call bleeding- or cutting-edge might not be appropriate. Retail is running on fairly slim margins, so shrinkage is very important.”

In the real world, some solutions may not perform as expected. “One of the most ridiculous situations I encountered was to improve the capture of shoplifters with video surveillance integration to the EAS,” Lim said. “It sounded straightforward but because the EAS system was easily defeated by experienced shoplifters, there were no alarms in the first place. The false alarms were also quite ridiculous, as many retailers did not ‘untag' and thus a customer wearing a shirt bought a year ago would trigger the EAS system.”

For megapixel imaging, some customers do not understand the bandwidth and storage issues it incurs. “The transmission of large megapixel cameras at large quantities is the No. 1 request, or the transmission of video to a central location,” Mellos said. “It can be done, but most retailers are not willing to build or purchase the infrastructure needed to achieve the results.”

Calibrating intelligent video requires continued education as well. “The use of analytics for customer behavior is another user request, such as waiting on display or queue length,” Mellos said. “It can be done, but would be used on top of something that's working.”

Future Developments
Networking is the wave of the future. From greater visibility in RFID to hosted video, IP introduces greater efficiency in retail operations. “For many years, people have heard about the Internet of Things,” Coyle said. “In the early days of RFID, reliably collecting or reading an RFID tag could be a challenge. Nowadays the bigger issue is how to best exploit and leverage the newfound visibility data after it is read.”

One way to leverage data would be smarter search capabilities for operational benefits. “It would be great to be able to search for a specific type of repeated motion,” Davis said. “For instance, after every transaction the employee should close the drawer. If that motion is absent, it could mean the employee is purposely leaving the drawer open so he can avoid entering cash transactions into the PoS or he could have forgotten to close it before going to get the customer's meal. It's either an operational policy violation or theft, either of which needs to be corrected.”

Video analysis is becoming more accurate and using footage actively. Improvements in facial recognition, behavioral analysis and people counting will benefit retailers, Zhou of Hikvision said.

Integrating facial data with identification could apprehend repeat offenders. “Let's say a mall has a criminal record database,” Ku said. “With a real-time biometric pairing system, when anyone with a criminal record shows up, the camera would detect it and send signals to security.”

Cloud Services
Retailers receive the most benefit from hosted services, as the provider handles storage. Bandwidth increases will make hosted video more feasible. “We will see more cloud-based hosting, removing bandwidth demands from the infrastructure,” ?kesson said. “With remote access, a store manager can view the images from any number of different stores in real time from anywhere, even on a device such as a mobile phone. This is a huge change from the old analog days.”

For retailers who want information on-demand, a hosted solution can be a future-proof investment. “Users have instant access to new features and functionality by simply logging into the application,” Steinfort said. “The customer no longer suffers from the technology obsolescence that comes with model year development cycles, and the IT team is no longer burdened with software patches or equipment upgrades.”

Shoppers in stores are protected by retail security, which also makes their buying experience more pleasant. Depending on the nature of the business, security can streamline operations and provide an attractive ROI.

Security Rings Up Sales for Retailers

Editor / Provider: a&s International | Updated: 10/17/2011 | Article type: Commercial Markets

Shop ‘til you drop. For retailers, that phrase has become an ominous one. As the recession tightened consumer spending, retail business witnessed a similar drop. While a global crime wave of rampant shoplifting did not emerge, retail sales suffered. The reduction in consumer spending meant loss prevention departments had smaller budgets to work with. However, some retailers managed to beat the market. Discount items became a hot commodity, with US chains such as Family Dollar and Dollar General investing in hosted monitoring for hundreds of locations. Hosted solutions helped reduce upfront costs, generating better ROI for retailers and security providers. On the other end of the spectrum, luxury retail is booming. While retailers targeting average-income buyers survive on razor-thin margins, high-end retailers are selling out of their most expensive items. Overall security spending increased 10 percent in 2010, reducing shrink by 5.6 percent, according to the Global Retail Theft Barometer. With shoplifting being a US$45-billion problem, anything that cuts shrink is a welcome investment.

The general mindset toward security remains grudging. Security is seen as an upfront cost, not an investment. Loss prevention officers must explain why they want a solution with a price tag over budget, or that takes up network bandwidth, when it does nothing to reduce shrink. Operational efficiencies that boost sales are worthwhile, which is changing the security dialogue. Instead of identifying shoplifters, security technologies in video or asset tracking are being deployed to increase productivity. As retail operates on slim margins, demonstrating benefits is the way to go. a&s examines the market for retail security, as well as how security is evolving. We look at how solutions are deployed, what the hallmarks of strong performance are and where the future is headed.

Shopping shows no sign of stopping, even in the face of gloomy market forecasts. Consumer spending has slowed but not halted, making retail a key vertical for security. Shrink decreased 5 percent to US$100 billion worldwide or 1.27 percent of retail sales, but remains a problem, according to the 2010 Global Retail Theft Barometer.

The survey found about $8.3 billion was spent on security equipment such as electronic article surveillance and video, representing 0.34 percent of retail sales. “Retailers apprehended nearly 6.2 million shoplifters and employee thieves, an increase of nearly 400,000 compared to 2009,” said Johan Akesson, Director of Business Development for Retail, Axis Communications.

After the 2008 recession, many retailers reduced loss prevention budgets. “Shrinkage as a percentage of retail sales went up from a global average of 1.35 percent to 1.43 percent,” said Steve Sell, VP of Global Marketing for Checkpoint Systems.

The global security equipment market for retail will maintain a 6 percent compound annual growth rate until 2015, said Klaus Lienland, Business Development for Bosch Security Systems. This is mostly video sales, followed by intrusion and access control solutions.

Asia is the largest market, with the Americas and EMEA behind it, according to IMS Research. “There is good potential growth in China,” said  CMO for TeleEye. “In Europe or the States, we can see some retail chains closed down all their stores or reduced their size.”

Shrinkage represents about 2 percent of Chinese retail sales, said Jun Zhou, Industry Account Manager for Hikvision Digital Technology. Of those losses, shoplifting makes up 64 percent. [NextPage]

Recession Shift
Retail is one of the most sensitive markets in uncertain financial times. “From my experience, when the economic outlook is not too good, the mid- to low-end retailers are the ones that start to shrink their security spending,” said Patrick Lim, Director of Sales and Marketing, Ademco Far East. “However, high-end retailers tend to be more consistent and spend more during a recession.”

Spending did not necessarily increase, but shifted downward. “Where we used to go after just the high-end retailers whom are not thriving in the marketplace, consumers are looking for deals, which has opened the door to outlets and discount retailers,” said Jim Shepherd, National Account Manager at Protection One. “The market for budget merchandise has boomed because other retailers reduced or shut down locations, providing prime real estate for these discount retailers to take advantage of.”

Retail and commercial accounts are handled at a dedicated central station, where operators are trained to speak with management and resolve customer issues. “In retail, the loss prevention department is normally the primary decisionmaker who determines how monies are spent on security and life safety technologies,” Shepherd said. “One of their primary focuses is to combat shrink. They don't put in a camera or an alarm because it's necessary; they invest in technology when it has a proportional impact on shrink or produces an ROI in a one- to three-year time frame.”

Budgets have taken a hit, so security teams must stretch their dollars to find solutions to problems. “If you talk about new installations, they have the luxury to design a system to fit the application from the beginning,” said Kostas Mellos, Commercial Leader for Video and Transmission for Interlogix, UTC Fire & Security. “What you see in existing retail operations is that they expand to sites that are not as well attended. With that comes the challenge of using infrastructure in the existing parts of stores.”

Smaller budgets mean fewer returns for retailers. “The recession has meant a slowdown in user spending, and many retailers have opted to lower prices — and thus profit margins — during the recession,” said Becky Zhou, APAC Sales Director for Arecont Vision.

Security? Not My Problem
At any retailer, security cannot interfere with profitability. The network primarily records sales and cannot afford downtime. Adding anything to the network, such as IP video, immediately gets shot down by the IT department over bandwidth concerns. Security equipment is seen as an expense and not an investment that delivers benefits.

Explaining the business case for security must account for retail priorities. “With our retail customers, we are mostly concerned with addressing their operational needs,” Lim said. “Integration is becoming more important, as security systems seek to be an integral part of retail operations and can improve operational efficiencies. Large retailers are beginning to realize that they cannot be adopting piecemeal solutions, as it will cost them more in operation inefficiencies.”

In retail, the network is tied to revenue. “It's the connection from the store to corporate; they will never jeopardize the functionality of that,” Shepherd said. “If security takes the network down, you can't record sales and that's far more important than any camera put in.”

Because the main business network is reserved for PoS and business information, it has priority over security. “We seldom push for transmission of video over that network,” Lim said. The intrusion alarm system will usually run on an independent PSTN line, with backup transmission over IP or wireless if possible.

IP video is frequently questioned in retail applications, requiring a dedicated network. “The solution is, in most cases, a semiparallel network that resides together with the IT network, but share some or all of the infrastructure equipment, such as switches and routers,” Akesson said.

However, adoption of IP solutions remains sluggish for their upfront cost. “Unless it supports other business intelligence or other departments, there is not always an advantage to putting in a network camera to catch a bad guy,” Shepherd said. “From my perspective, if I sell IP systems and charge three times the money, my customers will call to ask why it didn't change the shrink number. Just because the video is pretty doesn't mean it's better.”

Communication between the loss prevention and IT teams determines whether a retail solution is successful, as each team has unique concerns. “You have the IT group that knows how to deal with data, virtual networks and partitioning data to different parts of the organization,” Mellos said. “For security and loss prevention, all they care about are results. Are we seeing shrinkage? Can we get to the data or video fast?”

Retail Requirements
As security affects the network and existing equipment, mandates may cause resentment against security. This makes security seem a burdensome tax on business. While retail is not as heavily regulated as gaming, a store must comply with local legislation, such as fire codes. “In most countries, only retailers that handle high-value goods are required by insurance companies to have a mandatory video surveillance system and alarm monitoring,” Lim said.

China passed legislation this year on midsize to large retailers and shopping centers, requiring video for areas such as safes, warehouses and ingress points, said Zhou of Hikvision. For food safety, businesses that handle food must record identifiable footage of whoever comes in contact with products. While this represents a great opportunity for security, it places the burden on retailers who are stretched thin.

Local legislation may dictate how retailers use their security. “Some stores are not allowed to store the images they have recorded and can only use the data they have gathered through intelligent video such as people counting, for which the requirements are less strict,” Akesson said.

Handling Sensitive Data
Data management for retailers may be affected by requirements, such as the Payment Card Industry Data Security Standard (PCI-DSS) governing how payment information is processed in the U.S. “In the quickserve restaurant (QSR) industry, PCI-DSS compliance is a major legally mandated security requirement,” said Mike Davis, Loss Prevention Manager of By The Rockies. It is the second largest franchisee of Carl's Jr. and Hardee's brands, as well as Taco Bell, Pizza Hut and Dunkin Donuts.

Video is not directly covered by PCI standards, but By The Rockies selected a solution that was compliant. “In the future, some insurance underwriters may require QSRs to have video surveillance systems in place to purchase an insurance policy because of the added protection against unfounded slip and fall, sexual harassment or other liability claims,” Davis said. “Having video evidence of the claim enables a company to fight false claims and mitigate damages during litigation. For instance, if a customer claims he slipped on an unmarked wet floor, but the video clearly shows signs marking the area, a court may decide to award less than if there was no video of the event.”

Managing payment information takes both physical safeguards like locking computers up and logical measures like passwords. “I had the chance to visit the back-end operations of a retailer. There were stacks of customer information lying around on the floor, while staff had easy access to the room,” Lim said. “The merging of enterprise physical and logical access control solutions is going to make it easier for responsible retailers to beef up their security.”

On the IT side, data management practices are fairly well-established. “Many retailers have adopted a centralized data management approach,” said Tom Coyle, VP of Information Solutions for Avery Dennison. “You can build firewalls at the back-end rather than have exposure out at the store level.”

RFID usage has raised privacy concerns before, as each tag is a unique identifier. Industry groups such as GS1 and the Voluntary Interindustry Commerce Solutions (VICS) have developed privacy guidelines for retailers. “Many retailers are oriented to ‘opt-in' solutions where customers have the choice to remove RFID tags from apparel items,” Coyle said. [NextPage]

Investing in Security
With all the flak security gets, why bother with it? Retailers become more amicable when security proves to be an investment, rather than a high one-time cost. Reducing operational costs is one clear way security can provide benefits. “In the longer term, ROI can be demonstrated through cost reduction of manpower, such as security guards and more,” said Iida Atsushi, Manager of Security Solutions, Professional Solutions Asia Pacific, Sony Electronics.

Management efficiencies can also be delivered through security aiding business systems. “We see a lot of interest in PoS technology because often times there's more loss at the register than internal and external theft combined,” Shepherd said. “It's not always intentional; it could be as simple as mis-scans on bar codes, ringing up a single item when it should be multiple. If you don't identify that, the retailer could sell a case of water for 99 cents. If the system improperly registers that, it's a loss.”

Other instances may result in unintentional losses that are avoidable with security solutions. Sensors can detect if refrigerator rooms are left open or if there is water damage from open skylights, Lienland said.

Identification solutions using RFID tags can benefit multiple stakeholders within a retail organization. “The strong trend nowadays is for the inventory, loss prevention and merchandising teams to look at solutions holistically,” Coyle said. Selling security is not just moving product but addressing user needs. Security can be a team player, paired with good processes and effective training. In the following article, we examine how security is implemented in different retail settings.