Security equipment can be used for collecting data for an enhanced shopping experience and better business intelligence.
Security equipment can be used for collecting data for an enhanced shopping experience and better business intelligence.
The economic downturn dampened the spirits of consumers and retailers, as layoffs and foreclosures curtailed spending. While a crime wave has not emerged, an uptick in shrinkage makes security a retail priority. The National Retail Security Survey found shrinkage formed US$36.5 billion or 1.52 percent of retail sales in 2008, up from $34.8 billion or 1.44 percent in 2007, according to the National Retail Federation and the University of Florida. As profit margins narrow, shrinkage is an expensive problem.
To combat theft, retail employs complete security solutions with surveillance, intrusion and PoS integration. Advances in IP and processing have resulted in more accurate business intelligence, using data from security devices to increase productivity and revenue. Instead of watching for shoplifters or dishonest employees, business intelligence identifies patterns in shopper behavior, such as where they stop longest. While the security equipment does watch for illegal events, it also offers value-added information to improve business.
IMS Research considers business intelligence a potential driver for video analysis adoption, according to "The World Market for Video Content Analysis — 2009 Edition" report. "Business intelligence analytics, such as people counting or queue length monitoring, have a number of installation advantages over typical security applications such as perimeter protection," said Niall Jenkins, Market Analyst at IMS Research. "In security applications, end users cannot afford to miss a potential security breach; however, business intelligence algorithms can provide reliable trend information despite not always counting every person that enters a retail or commercial location."
Object recognition identifies what's onscreen, be it cars, people or luggage. It is deployed in abandoned object analysis for security uses. In retail applications, it can distinguish between a person and an animal, along with speeding up transactions.
Video Inform uses object profiles to identify shoppers. "We are able to detect separately men, women and children," said Ronen Saggir, CTO of Video Inform. "Our solution has the ability to classify the objects by user-defined categories, not just count them."
The solution can account for outdoor activity. "We use the same profiling technology to count people and cars indoors and outdoors," Saggir said. "Our special technology creates an object profile and has the ability to have interactive feedback with the system."
Object recognition has another niche: identifying retail goods. Evolution Robotics Retail uses object recognition-enabled cameras at checkout lanes to check the bottom of the basket of shopping carts for items, without scanning barcodes, said Alec Hudnut, CEO of Evolution Robotics Retail. It sends this information to the PoS system, requiring cashier verification to complete the transaction. This makes sure all items are paid for and virtually eliminates sweet hearting, when employees deliberately ring up fewer items for a friend.
Understanding customers is an underlying premise of business intelligence. It provides unobtrusive insight in an inexpensive way, compared to observation studies.
BVI Networks produces intelligent video solutions targeted for retailers and consumer product manufacturers. "BVI's solution brings the same concepts of customer tracking and analytics that permeate the online commerce environment to the in-store environment," said Kathryn Howe, VP of Sales and Marketing, BVI Networks. "The solution provides in-store retailers and brand manufacturers with capabilities that will allow them to get closer than ever before to understanding the very behavior of shoppers in the store. This means they can better connect and serve those shoppers."
Two key metrics delivered by the BVI system are shopper engagement rate and display or product exposure rate. "These metrics enable retailers to understand which promotions work best for their store by measuring how many shoppers stop, evaluate and view an actual display or product area," Howe said.
By measuring traffic and dwell times for any area of the store, the BVI solution identifies store hot spots by reporting how many shoppers are in each location and where they spend the most time. "People counting can be done by store entrance, aisle, display or specific locations," Howe said. "Traffic numbers are then automatically coupled with store layout and PoS data to provide conversion rate; measuring effectiveness of product placement, packaging, display and messaging."
Counting analytics provide hard data for retailers. "The software has the capability of measuring occupancy — the real-time running count of how many persons are occupying a specific area of interest, like a conference room," said Ed Troha, MD of Global Marketing, ObjectVideo. "The software can also accurately measure dwell time, which is the average amount of time a person stops to peruse a retail display or digital signage in a train station."
Business intelligence can customize the shopper experience. “We offer integration with digital signage," Saggir said. "Judging by the age and gender of the person, we can directly adjust the digital/commercial signage."
Some solutions read body language. "Intellio's face analytics-based software can detect the movement of human faces," said Szonja Balogh, Head of Communications, Intellio. "If installed in retail stores, the system can provide information on the demographic composition of shoppers and their behavior. The data extracted can be used to make more reliable market analysis and better placement of billboards or advertisements."
Business intelligence generates timely reports, allowing retailers to see what works and improve weaknesses. It increases effectiveness and reduces labor, such as manually counting occupancy.
Up-to-date reporting can aid investigations. "Analytics can identify theft and fraud quickly by integrating transaction data from banking ATMs or retail PoS systems with synchronized video evidence," said Peter Wilenius, VP of Marketing, March Networks. "The integrated solution also enables organizations to rapidly access high-quality, high-definition video evidence of criminal activity based on dates, card numbers and more. These images can be provided to authorities to help identify and apprehend criminals quickly and prosecute cases."
Users can customize reports for relevancy. "Daily and weekly store reports are sent out automatically to people in the organization who need the information. They include information on store conversion rates, people count, sales by hour, total sales and PoS transaction count," Howe said. "Weather information is included as well, so that managers can see the effect of weather on store performance day over day and week over week."
Business intelligence applications add value to video installations. However, video analytics are notorious for false alarms and time-intensive setup. Intelligent video requires proper installation of video equipment to function.
To accurately identify a face, Intellio's solution needs at least 12 pixels. "For identifying gender and age recognition, the system needs 20 pixels," Balogh said. Other hardware specifications include a fast enough processor, along with sufficient storage and reliable transmission.
Video Inform emphasizes vendor-agnostic software for any surveillance camera. "Our technology has strong robustness for changing image settings, such as lighting conditions, indoor/outdoor scenarios and even camera view angles," Saggir said. "The solution can adjust to almost any camera installation, thus delivering a significant investment protection and cost reduction."
Ultimately, optimal camera placement depends on the integrator. "ObjectVideo's software does not care what type of video feed it receives to analyze — it can analyze video from any type of camera," Troha said. "In fact, ObjectVideo software can perform better when shadows are not an issue, as with thermal and IR technology. In short, don't ask video analytics to compensate for a potential poor camera choice or camera placement."
As item-level tagging becomes more affordable, it offers inventory visibility for retailers. "Given the item-level intelligence these solutions offer retailers, they can also determine where the goods are, whether on shelves or displays, in the back storeroom, misplaced or missing," said ADT in a prepared statement. "Such capabilities can help stores raise their inventory availability from an average of 67 percent to as much as 99 percent. By avoiding out-of-stocks this way, retailers adopting this application have reported sales increases of up to 25 percent — despite these recessionary times."
Business intelligence requires users to get hands-on for results. Some retailers spotted trends they had missed, checked inventory more efficiently and identified suspicious behavior.
Nike deployed a March Networks solution in the U.S. for its 114 factory stores and 29 retail stores. "When loss prevention staff arrive at work in the morning, they can drill down from the application's dashboard to exception reports based on their own rules and begin investigating suspicious transactions," said March Networks in a prepared statement. "With access to gift card and credit card data, employee records and, ultimately, ship-to addresses from online purchases all linked together, Nike will be better equipped to investigate suspicious transactions and trim losses resulting from fraudulent activity."
Other retailers found trends that were not obvious. "One customer immediately noticed that the average time spent in their store was more than 90 minutes," Howe said. "Their store was seen as more of a hangout area, with a strong community aspect to it. Now that they understand this, they have reorganized the store layout to optimize their customer's routes and increase sales and customer loyalty."
Apparel retailer the Limited deployed ObjectVideo analytics to track how many customers visited its 220 stores. The solution outperformed a thermal imaging counting solution during trials, enabling the Limited to collect accurate customer information.
"ObjectVideo technology delivers full functionality for the detection, classification and tracking of objects, and the outputting of relevant events for a growing number of security, safety and business intelligence applications," Troha said.
Some solutions work even with crowds. "We have a case where the mall leads to a train station," Saggir said. "When the train stops, all the people are coming out from the train station to the mall. This is a mass of people. The system will know to count them and classify them accurately."
Hong Kong retailers reduced lost sales by deploying RFID to combat inventory inaccuracies. "Tracking in-store inventories accurately and reducing out-of-stock situations are key challenges to retailers as these can lead to lost sales and higher operational costs," said Roger Tsang, District Manager of Hong Kong, Macau and Taiwan for ADT Security, in a prepared statement. The ADT solution provided 10-minute updates on shelf inventory levels for a European book retailer, reducing out-of-stock risk.
The potential for business intelligence extends beyond retail. Functions such as counting and tracking are useful in other applications for identifying people and trends. "In addition to retail applications, our data and video analytics are also used in the banking, aviation and other commercial and government environments," Wilenius said.
Locations with high foot traffic find business intelligence helpful. "Aside from retail, ObjectVideo has also been working on a number of business intelligence deployments in the gaming industry and in the transportation vertical," Troha said.
The transportation market includes public monitoring of traffic and highways. "The Video Inform solution can count on highways and identify by category, such as motorcycles, regular cars, big trucks or even public transportation," Saggir said.
Military and homeland security applications focus on personnel safety. "We provide tracking for police officials," Saggir said. "In areas where police officers are stationed, the monitoring facility can monitor them."
Business intelligence allows users to maximize their security investment. Rather than placing cameras to capture rare instances of crime, all footage becomes useful data. With retail as an early adopter, business intelligence turns security equipment into tools for enhanced customer service and facility management.