Designing Smart Solutions for Retail
Pressures on the retail sector are currently enormous and challenges come from a number of different sources. Losses due to retail crime have increased, and customer footfall is being impacted by growing on-line retail competitors. High operational overheads are forcing many retailers to rethink their business strategies, and many are failing to address the threats if Britain’s high streets are used as a barometer of retail success. However, the deployment of smart tech-based solutions can help at a time when budgets are under scrutiny.
The entire retail sector is currently under pressure. The huge growth in online shopping has significantly impacted on footfall, which in many cases has led to a reduction in staff numbers. This in turn impacts on the level of service, which leads to abandonment if a customer’s expectations are not met. Increased overheads have led to some well established names disappearing from the high street, and according to several research sources, retail crime is still a massive problem for business, costing over £1.9 billion last year according to figures from the British Retail Consortium.
Retailers are under pressure to be more efficient, reducing shrinkage and operational costs, while also competing against the low prices and wider choice available from internet-based competitors. Technology is disrupting the retail industry, but equally it can offer added value and benefits which will enhance the offering from retail businesses.
Today’s shoppers are demanding. If they are willing to spend their time (and money) visiting physical high street stores, they expect something extra, above and beyond what is available from internet-based alternatives. While it is commonly accepted that high street retail outlets often will not compete in terms of price when compared with internet suppliers, the lure of the retail experience is still strong.
Customer service must be high if a retail establishment is to be successful. However, the battle to reduce overheads has resulted in reduced personnel numbers, which means a store must be highly efficient in terms of management to ensure customer satisfaction remains high.
Additionally, every merchandising strategy needs to be right. Incorrect product placement can lead to customers moving on to other outlets or missing goods which may encourage add-on sales. If the customer’s potential for purchasing is not maximised, the store cannot realise its full potential in terms of sales.
It is also vital that shrinkage is minimised. In a report by the British Retail Consortium in 2019, the cost of retail losses due to crime were estimated to be £1.9 billion. Interestingly, that figure is made up of £900 million due to theft and/o fraud, and £1 billion investment in systems to prevent such losses.
While investment in technology to help reduce shrinkage has to be seen as a positive, the real issue is how much return on investment (RoI) the retailers are getting from their spending. In the vast majority of cases, it won’t be anywhere close to the potential RoI. This is because most systems designed to reduce crime-based losses only do one job: security. This is despite them being capable of delivering a range of other benefits which can drive operational efficiencies.
The reality is a combination of smart video deployments, asset management, detection, access control and peripheral IoT edge devices can not only fight the rising tide of crime, but can also offer everyday benefits across a range of operational tasks. Benefits include queue management, footfall counting, occupancy reporting, merchandising, staff rota creation, stock management and a number of other peripheral tasks such as energy control, muster reporting, compliance monitoring and time and attendance.
Additionally, by pulling together data from a range of security solutions, in-depth reports about retail operations and site management can be created and shared. These allow historical comparisons to be created in an instant, allowing real-time data to be viewed against reports from weeks, months or even years ago.
Smart solutions can make use of data streams collected by video surveillance systems, transactional information from access control, trigger information from various detection devices plus real-time status information from a whole range of peripheral devices to create a bespoke solution which adds value to the everyday work of retail establishments, whether independent small enterprises, chain stores with multiple locations of campus-type shopping centres and retail parks.
The good news for the end user is many of the devices for such solutions either are already in situ, or can be added for a low cost. However, the subsequent benefits offer real savings in terms of time and money, as well as creating a more customer-focused operation which is efficient and credible.
Turning losses into benefits
The problem with retail crime is that it comes in many different guises and is affected by several factors. The retail environment is, by its very nature, a high risk one. Most retail outlets have to be welcoming and have the most sought-after goods – usually the high price items – on display. Such open access to valuable assets will always attract the attentions of criminals as well as legitimate shoppers. The problem is the precise offences are hard to predict, and could cover theft by customers and staff, shoplifting, violence or the threat of violence against staff, robbery, fraud or vandalism.
Idefinitying potential criminals is also very difficult. They can operate alone or in gangs, use fraudulent methods or intimidation, be young or old, or work in collusion with trusted members of staff.
For these reasons, predicting retail crime and acting accordingly to mitigate the risk often requires a system which covers all threats. This can make it costly, but the issues of RoI are removed when the system also delivers operational benefits. Ironically, it is precisely the need for a depth of coverage which makes such security devices ideal for added value implementations.
Some integrators – and many retailers – take the view that security systems are something of a grudge purchase. As a result, too many retailers look for low-cost systems. While there are cheap options available, often these will create systems which have a single use. For example, budget-level video surveillance will often consist of little more than a selection of cameras, a recorder and a monitor. The system simply records video, and if an incident occurs, the retailer then needs to search through hours of recorded footage in the hope of finding something of use.
However, if they want managers to receive a push-notification if queues exceed a predefined level, of if they want to assess footfall through the store at various times of day, they will be unable to do so.
Security system can be a grudge purchase if all they do is present an complex way of searching for information after an event has occurred. Not only does this waste time and resources, but it is only ever used once a crime has occurred.
The reality is any security system which does not offer a potential return on investment will be viewed as having a low value, and is hard to justify when budgets – and trading conditions – are tight.
To be fair to video surveillance, this is generally true of any security system (or for that matter any system) sold into a retail application. Thankfully, the evolving technological landscape allows added value to be created by smart solutions.
It is important to properly differentiate value from price. Good value does not always mean the lowest price. Indeed, a low cost system with little ability to deliver smart functionality will always represent poor value, while a higher price systems with additional benefits for the retailer alongside security – such as queue management, push notifications, assistance in assessing staff rotas to meet customer demands, heat mapping and occupancy alerts – will represent better value, as the return on investment is enhanced.
Technological developments in a variety of technology-based sectors – advanced communications, flexible and mobile IT, advanced analytics, service-based systems, smart buildings and the Internet of Things – have dramatically changed the proposition from many technology-based systems, and security can be included in this.
Not only do such systems deliver additional flexibility, functionality, scalability and enhanced performance, but they also provide business intelligence and the addition of management benefits, adding a tangible return on investment.
A network-based solution will also increase the options for integration with other systems. This can help use video, transactional data and real-time status updates to supplement core business needs such as stock control, accounting and invoicing, communications, customer management, marketing, etc..
Cameras, door readers, detectors and asset trackers are actually advanced data collection and management systems in their own right. Much of the data collected can not only be used for security, but can also add true value.
For example, a camera covering a POS position will record video to help protect staff against theft or robbery, and will also allow the retailer to protect themselves against staff theft and sweethearting. Using intelligent video analytics (increasingly built into the camera or video management system as a standard feature, or addable much like an app is added to a smartphone), threats and violations will be notified to management rather than the retailer having to search for incidents.
However, the same video stream could also run an inexpensive analytic which will identify situation where a queue forms (based upon the density of people in a specified area) and take action. The actions could be to notify management via a push-notification, or to initiate a pre-recorded announcement either directing staff to the till point, or customers to other POS positions.
Retailers could also use captured data to identify, in seconds, the days and times when queues form, and the locations which are most likely to experience heavy traffic. Such reports would show trends, allowing management to move staff from typically quiet areas to busier ones at certain times, ensuring customer satisfaction is increased.
It is worth noting that video analytics functions such as queue management, heat mapping, occupancy, footfall, direction of travel, etc., do not make use of video, which can be bandwidth heavy, costly to store and prone to regulation under GDPR. Instead, metadata is used: effectively, alphanumeric data about what is happening in the video.
Metadata is lightweight, easy to transmit and store, and contains no personal information so is not subject to GDPR regulations. It will, however, allow a retailer to spot trends, such as lengthier queues at certain till points at a given time of day.
Because analysing metadata is fast and accurate, a retailer with multiple sites can quickly identify if certain trends – such as a high level of customers pausing in front of a specific display – is occurring at one site only, or across all stores in various regions.
Smart systems should be feature-rich and designed for specific challenges relevant to retail applications. The systems will offer a wide variety of added-value elements bringing efficiencies to the retail environment.
For example, video surveillance system offer a cost-effective high quality security option, but the captured video can also provide a range of other benefits, alongside queue management which has already been mentioned. Video can be used to create heat maps, identifying the areas within a store where footfall is most prolific. This adds value when merchandising, which in turn can ensure the store layout is optimised for revenue generation.
People counting can identify trends, helping store management to identify their busiest and quietest times of the day. This can assist when creating staff rotas, and ensures that tasks such as restocking are carried out prior to periods of intensified customer activity.
Using access control allows management to not only control access and egress rights for staff, but can also be used to ensure compliance issues are met. The access data can include various information such as whether personnel are first-aiders or till-trained, as well as linking specified roles to certain tasks. For example, access to office areas might be refused to anyone not in a managerial role while tills are being cashed up.
Access control data can also be used for muster reporting, creating a list of all on-site staff if an evacuation occurs.
Detection plays a role in securing a site against intrusion, and is generally only used during periods when a store is closed. However, advanced systems allow use of detection devices to trigger building processes at other times. For example, if no human presence is sensed in a back-of-house area for a defined period, lighting could be automatically switched off. The reverse could happen if movement is sensed, meaning staff carrying stock do not need to switch on lights. This not only saves energy, but helps with H&S compliance.
There are a number of important considerations when looking at retail solutions. The first is that low-cost systems often are not the best value for money. Rather than focusing on price, consider the potential for added value.
Retailers should ensure they understand the value on offer from a smart system, and with the right selection they can enjoy efficiencies froma solution which delivers a return on investment.