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How network cameras can help retailers reduce shrinkage and gain customer insights Print E-mail
Monday, 29 February 2016 12:17

Retail stores are facing increased competition from e-commerce shops. Internet-enabled smartphones and tablets have intensified this trend in consumer behavior. The majority of consumers who have smartphones use their devices within the point of sale, 42% of them to compare prices, 30% to send messages or photos related to the purchase, and 25% to look for additional information on the products they have just seen. In this highly transforming scenario, retailers have been pushed to innovate and to consider technology as a tool to open up new business opportunities. This is especially true for so-called "brick-and-mortar" stores that have found themselves facing increasingly fierce competition from e-commerce shops, which are always ready to win over more customers and collect more information on them, their preferences and how they make purchases. When looking at retail technology solutions, network cameras can support store managers in the areas of security (video surveillance) and non-security (business intelligence). Within the security area, network cameras are mainly used for so-called "asset security", or to safeguard the investments made in a single store, such as a video surveillance system used for monitoring the store and the merchandise for loss prevention. Retail theft can be very complex to analyze because it depends on so many factors. In fact, it can include situations that occur before the delivery of the merchandise to a point of sale, but also within the store itself, or even in the passage of the goods through the checkout where the exit of the product may not be recorded. These are situations that can lead to an often considerable loss for the retailer.

Using thermal network cameras to detect retail theft in supermarkets
More and more cases of theft of fresh produce are being reported by large supermarkets and warehouse stores, not only because it is easier to steal and to hide, but also because it satisfies a primary need. Thermal network cameras can contribute to the reduction of losses at the point of sale. It is possible to monitor areas thermographically at a certain level, generating an alert when temperatures within a predetermined programmed range are detected, in this way identifying the product that the customer has potentially hidden under his/her clothing, in a bag, or in another personal accessory.
Non-security is another area where network cameras can help retailers optimize their operations. Security and business intelligence have until recently been pretty much two separate worlds. With network cameras it is possible to analyze customer behavior inside retail shops, to count customers and even to monitor queues at checkouts to determine if more checkouts should be opened.
E-commerce shops know their customers very well as they provide all types of data about themselves and their shopping preferences, things that "brick-and-mortar" shops don't usually know. This is why they need "technological help" to compete in this more and more difficult and competitive context.

Optimizing retail store operations with video surveillance insights
The so-called "operations" functions are people counting, dwell time (the continuous time spent in a given area), out-of-stocks on the shelf (which indicates a lack of product on display), and queue control (management of the checkout line). These are all elements that can help the retailer satisfy the customer and improve service levels.
For instance, e-commerce shops know perfectly well what pages a customer has visited and, therefore, the product sector that customer finds more interesting. The same argument applies to the number of pieces in stock because it is possible to gain real-time knowledge of whether a product is still available, in which color, model, and quantity.
Some applications that help retail stores obtain this data using network cameras are heat maps, tracking, and people profiling (an algorithm very similar to what e-commerce shops use when the customer voluntarily leaves his/her data). This last is an application that uses network cameras to profile customers at a point of sale, analyzing the gender, age, and other morphological data of those entering a store or within a certain timeframe. Heat maps, along with tracking, which observes the movement of people in the store across continuous lines, provide the store manager with insights as to how floor plans and product presentation can be optimized.
Knowing how many people enter the point of sale and how many receipts are issued, is in itself a very important statistic for understanding profitability. For example, a people counting application can collect some very useful data on the number of people that enter and actually buy a certain product.
Network cameras have become a true business tool as they are used beyond just video surveillance. They can provide retailers with valuable business insights as well as help them reduce shrinkage.

Last Updated on Monday, 29 February 2016 12:47

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