Retail is one of the most price-sensitive markets, which means that IP and integrated technologies are still in the minority. Steps are currently being taken to increase the market penetration. However, as retailers range in budgets and needs, criteria such as ease-of-use must be met and the value of the system better explained before more adoption can take place.
Analog systems currently dominate retail applications, even as companies begin to move towards IP. "In today's competitive retail environment, it is unreasonable to expect retailers to immediately discard these existing technology investments," said David Gorman, COO and Executive VP at VuIT Communications. "IP offerings must be compatible with legacy video systems, in order for users to enjoy the benefits of a complete network video solution."
Smaller retailers do not have the budget for expensive network cameras. "In the grocery space, margins for security systems are in the 1- to 2-percent reach," said Derek Rodner, VP of Marketing and Product Strategy of Agilence. "They don't have a lot of money to play with, so oftentimes they'll go for the cheapest solution."
With so much analog infrastructure, most systems are hybrid installations, with analog and network cameras linked to hybrid DVRs, said Raymond Weijts, Marketing Manager for Recorders and Storage at Bosch Security Systems. A typical retail environment can deploy as few as four cameras to more than 64.
In larger retail applications, business intelligence enhanced by IP-based systems is much more visible. "Some chains have created an ROI for IP-based video surveillance simply from the savings of better staffing levels," said Scott Thomas, Global Director of Market Development for Retail and Banking at Genetec.
However, the biggest challenge to enterprise video integration is that many retailers do not have sufficient bandwidth, Thomas said.
Most networks run on old equipment, which cannot handle the bandwidth required for streaming video. In demanding installations, a gigabit network is the minimum, Weijts said.
Separate networks are recommended for video surveillance systems, due to the traffic volume and impact on other networked systems, such as access control, PoS systems and so on, said Brian Leland, VP of North American Sales at Samsung Security.
Retailers with multiple locations analyze data centrally, requiring sufficient upstream capabilities from each store. "Intelligent codecs help reduce the amount of data, but you still cannot squeeze high-resolution video from one camera into a 512 kilobit DSL line, let alone multiple cameras," said Wolfgang Ritter, Director of Sales and Marketing at Intelligent Security Systems.
Customers need to know network architecture and bandwidth requirements. "Helping customers understand the benefits of segmenting video networks from normal data networks is more important than ever, as voice-over-IP systems are entering the market," said Huw Edwards, MD of iCode Systems. "This means that with more data from different systems on the network, video surveillance performance can suffer."
Most retailers in Europe do not have the network infrastructure necessary for IP video. "Those that do, have to prioritize the applications they choose to centralize," said Paul Everett, Research Director for the U.S. at IMS Research.
Only about 25 percent of retailers report PoS and video surveillance integration, said John Honovich, founder of IPVideomarket.info, in a prepared statement. "Given the almost universal use of PoS and video surveillance in retail, this is notably, but not surprisingly, low."
Integration between these two systems has been difficult because of incompatible DVR and PoS systems, Honovich continued.
The average retail chain uses multiple systems — access control, intrusion and fire alarms, electronic article surveillance (EAS), PoS, video analytics and so on — all with separate user interfaces, Thomas said.
For convergence in logistics, scanned barcodes of parcels, pallets or containers can be linked to video footage. "You can document the movement of an individual parcel across several warehouses like this," said Roland Feil, Director of Sales at Dallmeier electronic. If a parcel disappears, users can trace it by barcode scans and corresponding video footage.
Overall, systems are linked and operate side by side, rather than deeply integrated. APIs and SDKs are mandatory for communication between systems.
Connecting PoS and video is the next step for retailers. "This helps locate deviations in PoS, investigate and find the corresponding transaction caught on video," said Johan Akesson, Director of Business Development in the Retail Sector at Axis Communications.
Linking EAS systems to video is more straightforward. "Once you get an alarm from the EAS, that alarm triggers recording at higher frames per second," Akesson said. This integration provides retailers with sharp footage for identification, and can serve as a training tool for staff to make sure procedures are followed when EAS incidents occur.
Higher-level integration is seen in automation. High-end grocers can integrate environmental monitoring sensors to alert for abnormal events. "We have a major food retailer, who implemented our systems to send SMS alerts when their cold rooms get too hot or too cold," Edwards said. "The staff can then override control of the system directly from their mobile phone or laptop."
Integration between IP and analog systems can be simple, provided they share communication protocols. Traditional methods of tri-contact alarming used for analog systems can link access control, intrusion and video systems.
A hybrid system is common in today's shops. "If you have a traditional analog fire system, which uses a different protocol than the IP-based video surveillance system, you need to use an electrical relay contact to engage an alarm to the VMS system," Ritter said. "It's a pain to integrate all these separate systems onto a management platform, but it's doable."
Manufacturers need to work together, providing systems that cater to various retail needs. With the benefits of business intelligence, open systems are the way forward.
Retailers typically know little about technology, especially IT. "For smaller retail applications, where the owner is also the security guard as well as the operator, systems need to be easy to use," Weijts said. Video surveillance manufacturers are responding with boxed solutions for recording and management.
Graphic user interfaces need to be simple and understandable. "If you integrate a lot of functions that look good from a developer's view, you'll find that users have a completely different opinion," Ritter said. "A typical VMS is something you can learn within two days. A complete loss prevention system, however, including all search functions, will probably take double the time to train the operator."
Most software comes with profile and user options to prevent unauthorized access to the store's information. Information security threats can be on a corporate level, where sensitive data is stolen. Personal-level threats are when employees manipulate data, such as changing their attendance record or adjusting inventory levels. Intrusions must be prevented with firewalls, anti-virus software and network updates, Ritter said.
Each product in the service line — from the credit card payment terminal to the payment gateway system — needs to be secured. "For example, a terminal needs to be secured against physical theft using a lock mechanism, and external ports also need to be secured, to avoid unauthorized access via USB drives," said Ronald van Kleunen, Business Development Manager for Air Defense, APAC, Motorola.
Wireless is convenient and visible in retail, connecting terminals to back-end systems, inventory management, touch-screen kiosks and other devices. It is advisable to deploy encryption, based on Payment Card Industry Data Security Standard, to secure the wireless network against intrusion and denial-of-service attacks, as well as to detect rogue devices on the network, van Kleunen said.
Unlike high-risk sites, retailers see security as a commodity. These systems are often the first place to make cuts as soon as business performance worsens, said MatiaGrossi, Industry Analyst at Frost & Sullivan. "This hinders the speed of the evolution of security from a cost to a profit center, and also blocks the smarter use of physical security systems."
The cost of security systems can quickly add up, from front-end devices such as cameras and encoders. Purchasing licenses for analytics costs a few hundred dollars per camera, making improvements financially unattractive.
Manufacturers understand budget constraints. "Retailers are looking for a one-packaged solution that will bring them the best benefits for the lowest cost. They are concerned about warranties and being able to receive the support they need," said Vy Hoang, Executive VP of Sales and Marketing at i3International. "If you communicate the ROI to the user, they are more likely to invest in security systems."
The problem is not convincing retailers that they need security systems. Rather, retailers know the benefits, but cannot afford available solutions. "A nationwide retail pharmacy chain, for example, with 80 stores, originally ordered 16 cameras per store, but had to recall the order," Leland said. "In most cases, the entire cost of all the video equipment needed truly surpasses the scope of the security department's budget."
As prices for IP-based equipment drop, the market will see increased adoption. Serious providers need to double their efforts to strengthen user awareness.