Trends in the use of video analytics in retail to reduce shrinkage

Anna Arwidi

Video surveillance is the most deployed form of physical loss prevention technology. Starting with the basics, it’s important to make sure that the surveillance system is as effective as possible. Comprehensive coverage of a store is key, particularly in areas of high risk: the point of sale and exits. Once these fundamentals are covered, using suitably high definition cameras, the implementation of video analytics technology can provide an invaluable tool in reducing shrinkage.

Across industries, the common denominator for shrinkage is human behavior. To reduce shrinkage, then, it is crucial to understand the human factor and design solutions that counteract and modify it to the greatest extent possible. Several solutions hinging on video analytics have evolved from an initial interest in business intelligence analytics, for example people counting, into providing an effective loss prevention tool.

Direction detection

People counting is today an established solution in retail, but generally not standard in food retail as customers rarely enter without a buying intent and conversion rate is almost total. Many food retailers measure number of receipts as an indication of number of visitors. They/food retailers have, however, discovered that a real issue exists in customers exiting through the entrance gates – an indicator of suspicious behavior and potentially pointing towards incidences of shoplifting. One way of proactively counteracting this issue is with direction detection technology. In addition to tracking visitor numbers, analytics featuring direction detection can trigger an alarm when a person tries to exit in an undesired direction – for example through the entrance gates. This the detection can be enhanced by for example, a flashing light or sound notification altering staff or guards that there is reason to suspect foul play.

In this context it is also essential to train employees on what is expected of them, ensuring that employees follow proper processes, for example with voluntary bag inspection. Based on feedback from the return of investment of this kind of solution is weeks not months, provided processes are followed.

Random screening selection

High-ticket specialty stores, for example stores that sell computer hardware and software products or small handheld electronics, typically experience large inventory losses. The same can be said for large distribution centers handling attractive retail products. One component here is internal theft. While employee theft is a major component of retail shrinkage, it is globally an area in loss prevention that typically may not be as much of a focus as customer theft.

One of the best strategies retailers can use to reduce employee theft is with spot staff inspections. However, if this strategy is not carried out carefully, employers run the risk of damaging staff morale. With the use of a of an especially enhanced people counting analytics, these spot checks can be efficiently, systematically carried out without allegations of unfairly targeting certain members of staff. Such analytics systems are customizable – the selection percentage can be adjusted, and it is possible to decide how to alert security personal when a check is due. The random selector technology is well suited to both exits and self-checkouts.

Rapid return on investment (ROI)

As mentioned earlier, the uptake of video surveillance in retail outlets is already very widespread. As the investment in hardware has already been made, it makes good sense to maximise that investment with the clever use of video analytics – which come in at a comparatively low price point, particularly when stacked up next to the potential gains to be made in reducing shrinkage. Given this affordable nature of implementing video analytics solutions, retailers can see a very rapid ROI.

More about Axis’ solutions for combatting shrinkage