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Multilayer Protection Caters to Luxury Retail Security
a&s International2009/10/21

Exquisite jewelry, haute couture and designer appeal — what does it take to protect these top-of-the-range valuables? As the recession takes a harsh toll, upscale retailers look for a way to combat losses, while creating a more satisfying shopping experience.

Exquisite jewelry, haute couture and designer appeal — what does it take to protect these top-of-the-range valuables? As the recession takes a harsh toll, upscale retailers look for a way to combat losses, while creating a more satisfying shopping experience.

Over the years, crime has continued to plague the retail industry. According to 2008 Global Retail Theft Barometer Survey conducted by Center of Retail Research, global inventory shrinkage cost retailers US$104.5 billion, equivalent to 1.34 percent of total sales. The survey analyzed 920 large retail corporations in 36 countries.

"Rapid shrinkage, a combination of shoplifting, employee theft, administrative mistakes and vendor fraud goes directly to retailers' bottom line," said Angie Barnes, Director of Marketing and Regional Sales, Manager SW, NAVCO Networks and Security Systems. "With recession looming, losses in inventory and cash will be higher than ever before."

With valuable merchandise — be it jewelry, designer goods or upscale fashion — luxury retail items are frequent targets. The Jewelers Security Alliance 2008 Annual Crime Report found crime against U.S. jewelers increased 16 percent in 2008, resulting in total losses of more than $103 million.

Syndicated crime groups present a growing threat for high-end retail establishments, said J.M. Allain, President of Panasonic System Solutions Company of America. The average U.S. retailer spends about $230,000 annually on labor costs to fight organized retail crime, according to the National Retail Federation's 2008 Organized Retail Crime Survey. Many larger retailers can spend up to $1 million a year.

Leading surveillance technology allows retailers to respond better to this industry-wide issue. Any solution employed must tackle three major fraudulent behaviors: Outright theft (shoplifting, organized robbery, after hour break-ins); payment fraud (invalid checks and credit cards); and staff crime, said Michael Flink, President of Americas, ADI Global Distribution.

Working in Collaboration
With more value at stake, Allain said, the luxury retail market depends on the strategic use of several technologies.

Integration is key when IP convergence forms the backbone of the solution.
"With multiple security systems — video surveillance, access control, alarm and tagging systems— integrated upon one platform, retailers are able to reference to video if any of them are breached in any situation," Barnes said.

Liability and injury compensation claims from employees and customers cost retailers greatly, said Roni Klein, VP Sales, Verint Video Solutions, Verint Systems Asia Pacific. Slip, trip and fall accidents may lead to significant legal spending. "The video image thus has a key part to play in providing evidence to refute prosecution and perform constant surveys on premises to create a hazard-free shopping environment."

The Global Retail Theft Barometer Survey found disloyal employees accounted for 36.8 percent of shrinkage, with total losses of $38.1 billion. Video surveillance with PoS terminals have been used to spot till theft, such as staff undercharging purchased items or refunding excessive amounts for cheap items returned.

Integrated data management (IDM) ensures transactional data is captured with associated video. "The system maintains a searchable log of transaction number directly linked to the recordings," Flink said. "Any manipulation over registers — including voids, refunds and manually-keyed credit card sales — can be instantly identified."

Full Video Coverage
High image quality enables real-time responses. "In retail's dynamic environment, where glass partitions and doors are common setup, a wide dynamic range camera allows fine details to be captured under a combination of extreme lighting conditions," Allain said.

To achieve full coverage of high theft spots and sensitive areas, a mixed population of cameras is required. "Megapixel cameras promise a wider coverage of areas and are good at seeing faces close up," said Fiona Ungar, Marketing Communications Manager at ioimage.

Domes are in demand for their inconspicuous form, while PTZ cameras are gaining momentum for their tracking capability. When it comes to perimeter monitoring, autonomous PTZ cameras outside the shop track intruders, unusual parking and loitering with high effectiveness, Ungar said. "With hands-off software, a triggered regular camera can automatically pass a tracking alert to a PTZ camera without losing visual contact."

A fully networked system for remote access is a must. Specifications on local recording with a network interface enable video to be captured and preserved locally, while allowing real-time remote monitoring over the network, Allain said. Without a physical visit to each site, central monitoring makes it possible to watch over a large number of stores.

Network surveillance brings the advantages of scalable architecture, Flink said. "Regulation amendments and luxury retail expansion for a mall requires management for large volumes of video feeds and extensive storage capacity."

Working hand-in-glove with video surveillance systems are video analytics. Intelligence allow early warnings. "Proactive monitoring prevents crime before it actually takes place," said Janos Kópházi, CEO of Intellio.

Sophisticated video motion analytics spot anomalous activities, whereas unusual sound creation can be monitored by audio detection, said Johan Akesson, Director Business Development, Retail sector, Axis Communications.

Given that tasks can be allocated to smart cameras, it reduces the burden on security personnel. "The return on investment (ROI) is very fast," Ungar said.

Multiple Access Protection
Upscale retailers benefit from integration of access control and biometrics. "Luxury stores are often cased before being burglarized, as criminals pay a site visit before the planned robbery," Allain said. Facial recognition helps draw up a blacklist of suspicious characters and makes sure only employees and customers enter.

Access is a sensitive issue for storage areas where exquisite jewelry pieces are secured, said Dr. Sri Hartati Kurniawan, CTO at RCG. Biometric access emerges as a reliable and robust answer for identity authentication. "As it cannot be stolen or lost to gain access, biometrics verifies authorized agents — not just their credentials — into the restricted areas."

Rather than preventing theft, there is a growing trend to contain suspects. Topnotch retailers turn to interlocking, or a pair of security doors, for better protection. "An instant lock down signal can be sent to store access once triggered," said Kurniawan.

A Swiss jewelry store installed two sets of bulletproof glass doors at its entrance. Authorized customers at the inner door have to wait to exit, as the outer door is securely locked. "Grab and run" type robberies are made impossible, due to the inaccessible architecture, which was first published in GIT Security & Management.

Accurate RFID Tracking
RFID technology transforms security in retail by offering full visibility of any product movement, said Warwick So, GM of Competence Centre, Schmidt. Each tag can be individually programmed, lending itself to the authentication of returned merchandize.

Previously at established retail stores, alerts or warnings were triggered at the entrance with typical electronic article surveillance (EAS) systems, where false alarms would occur. "RFID allows a warning to be created within a store, sent in a highly discreet manner that prevents customers from potential embarrassment caused by a false alarm," So said.

RFID readers concealed behind walls or mounted above ceilings perform effectively, without disturbing aesthetic features or sales processes. RFID is gaining popularity due partly to its tiny form, So said. "Streamlined product design is made possible, where it is being sewn into garments, designer bags and labels, without being noticed."

RFID tagging of high-value items is growing fast. The global RFID market in retail application reached US$338 million in 2008, said Richard Sebastian, Research Analyst at Frost & Sullivan. "The estimated growth rate of RFID is expected to be 15 to 20 percent in 2009 and 2010."

Legacy tagging systems, such as low frequency EAS, remains a deterrent for RFID uptake. "Transition to an ultra high frequency system requires infrastructure establishments, resulting in a longer integration cycle," So said.

Keen on Appearance
For jewelers and designer stores, aesthetics are an overriding concern. Well-branded retailers require minimal visual impact, where surveillance systems need to blend discreetly into an environment, Allain specified.

Akesson seconded the idea that high-end stores consider discreet design as a must. "A non-intrusive equipment design, like colored housings, is essential for inconspicuous installation."

Surveillance for non-security applications is a fast growing field, continued Akesson. "From traffic counting, dwell time and path analysis, intelligent video analytics enhance operation effectiveness by understanding customer buying behavior."

The statistical video data facilitates marketing decisions, including strategic product placement, merchandise space allocation and store layout design, bringing in profit, Kópházi said.

With PoS data to verify sales results, Klein said, video analytics help companies identify successful merchandising and advertising strategies.

The RFID tag also serves to provide additional information, such as choices of colors and suggestions for complimentary pieces. The smart tagging system creates a seamless shopping experience, and satisfied customers mean better sales, Kurniawan said.

The ultimate goal is to crossbreed security functions with business operations, while optimizing budget allocation, Barnes emphasized.

Constraints and Outlook
Legacy systems remain the primary barrier to intelligence, Kópházi said.
To best utilize analytic software and traditional analog systems, migration to IP with an easy platform is crucial. Encoders help ease that transition, along with enabling refurbishment of an existing infrastructure asset, Barnes said.

Geographically dispersed IP video networks continue to grow, posing a growing challenge to central management, said Klein. The ability to reduce excessive video storage is valuable, particularly for luxury brands with a global footprint. "At the point of capture, video analytics generate actionable intelligence for immediate decision with greater accuracy, and improve resilience of local operation."

Bandwidth is a difficult issue for multisite monitoring, due to high telecommunication costs associated with large bandwidth for a commercial application, Flink said.

Given today's technology, intelligent cameras stream video through the network only upon alert, reducing bandwidth consumption, Ungar said.

The volume of bandwidth and storage have been reduced by more than 50 percent with H.264 compression, leaving room for increased image quality and more cameras, Akesson added.

Finding the budget for purchases or upgrades will be difficult for retailers, given the current economic downturn. Over the years, customers who might have had broad spending goals are now looking for a fine point to invest in, Barnes said.

The primary task is to help retailers understand the positive ROI, to benefit from the prevention of crimes, Kópházi explained.

"Video surveillance systems are easily cost-justified based on the money they could save and the peace of mind they provide," Allain said. "It provides a classic example of how a business can realize ROI — especially in the case of luxury retailers, when more is at stake."

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