In the United States, theft affects 3 percent of retail profits, making the retail industry one of the leading markets for video surveillance. With the emergence of Internet protocol (IP) video and video analytics, coupled with the need for greater control of data, retailers are faced with daunting choices of systems that link physical security with the world of information technology (IT).

In retail, both IT and physical security management have to cope with security breaches, as the line between data theft and physical theft has blurred. With more movement of data from the point of sale, security cameras and even self-service kiosks, IT departments and security managers can no longer afford to work autonomously. They must know what is happening in the physical store while acknowledging where the data is most vulnerable. Those designing and installing such solutions in the retail market must work with both the IT department and security managers to build a solution.

From an IT security standpoint, there is a frenzy of activity to gain greater control, said Justin Joyner, IBM, Armonk, N.Y., industry solutions manager.

Retailers want to do more than prevent data breaches. They also need to address theft, shrinkage and fraud, which all plague the industry. There has been a shift, however, concerning how retailers look at security. Today, Joyner said, IT departments are inviting the security people to the table, and this is becoming part of the business application for several reasons. For one thing, in the past, most computer viruses were the result of pranksters taking down random systems, but today, viruses come from thieves who target a particular chain. They load up malicious software and find a way into the company’s back-end system.

These attacks generally begin on a physical level, however, with an individual exploring the store and the store’s security system. These crime rings can be local, attached to foreign countries or even to terrorist groups. Either way, they get credit card details, often through physical access to the store.

The biggest issues for retailers continue to be loss prevention, credit card fraud, organized and other theft, counterfeit checks and money, and insurance fraud. There has been a significant spike in identity theft as well, said Jeff Knapp, marketing vice president, On-Net Surveillance Systems Inc. (OnSSI), Suffern, N.Y., an intelligent IP surveillance software company.

Many intruders are now able to bypass legacy IT security systems, so new technologies are addressing that vulnerability. They’re being designed to be smarter and to detect potential breaches.

“We started out with fundamental card services with a firewall,” Joyner said, adding that now stores need advanced intrusion protection.

At the same time, retailers are seeking to provide innovations for their customers in the store—customers who are increasingly seeking and expecting convenience. The result is new point-of-sale applications, mobile terminals and kiosks. Security gaps in data created with loyalty cards, customer cards and credit card data are where retailers have their greatest concerns. At the point of sale, Joyner said, wireless security is a gap.

“We find retailers are at a lot of different levels,” Joyner said. “The ones we see as most mature have taken steps toward not only security but making the system more efficient.”

One way they do this is to scale back the number of vendors that address different components of their physical and IT security and their point-of-sale data.

There are competent, reliable partners in the industry who can assist in the process, taking a tremendous burden off the shoulders of the retailer, said Ron Freschi, director of large system sales, North American Video, Brick, N.J..

The technology industry is meeting the needs of retailers almost too well, Freschi said. There is a proliferation of new technologies available, with all the manufacturers declaring their superiority.

“It can become difficult and time consuming for retailers to sort out what solution really does best meet their needs,” he said. “These are technologically advanced products that can be extremely useful for retailers, if they can find time to wade through the information.”

Over the next few years, Freschi predicts a technology shakeout in which there will be a streamlining of systems platforms, and some manufacturers’ products will disappear. In addition, open partnerships between manufacturers will enable diverse systems to work together, providing more functionality and operational data to the retailers.

“We often see retailers going from three dozen vendors down to a couple of vendors,” Joyner said.

And some vendors are poised to take a larger role in security deployment. Companies, such as IBM and HP, are consolidating their own services and acquiring other businesses to expand their offerings.

“We can meet a customer where they are, assess their security across any category, identify the gaps and resolve the issues,” Joyner said.

Some companies also can provide management services for that security system. Stores also want more centralized visibility with all security for multiple stores being piped to a remote location. For some larger retailers, that means changing what is a very complex system—with multiple solutions and a lot of customization—to full integration. This can require a brand-by-brand consolidation and generally is a slow process.

“In reality, unless you’re starting from scratch, it’s a mixed bag,” Joyner said. “Maybe they begin by doing away with a few vendors. You can’t rip and replace an entire system at once.”

As a result, each application requires a certain amount of innovation.

The most promising technology for physical security is the application of the camera to prevent fraud. Installing a camera network that is smart enough to recognize security breaches is where most retailers see their needs falling.

“The folks who need to have their heads up are the IT department, loss prevention and store operations managers,” Joyner said. “They need to be cognizant of each other and make sure security is applied properly.”

Physical security professionals are putting analog surveillance technology behind them. Nearly all video captured is being converted into digital information. This is another factor pushing increased involvement with the IT department. Smart surveillance packages allow retailers to correlate a transaction log’s data with video data to, for example, pull up footage of a specific customer or point-of-sale exchange based on the activity that is occurring.

“One thing we’ve seen with digital cameras is that IT needs to be involved. That’s sensitive data that has to be secured. IT security is very much tied around physical security,” Joyner said.

Advances in video surveillance technology have brought improvements in a number of areas. Better imaging devices, including megapixel cameras, have enabled higher quality images, providing more detail for facial recognition and identification of license plates, said Keith Kanestrin, marketing manager, Panasonic Security Systems, Secaucus, N.J.. In addition, the evolution of video analytics has made surveillance easier and less expensive. Now specific events can trigger alarms to alert security personnel of incidents in real time.

“Finally, the advent of IP/network systems has made it easier for management to access images and information remotely, in addition to making the systems themselves scalable and easier to implement,” Kanestrin said.

Imaging capabilities have been growing with the development of low-light imaging technologies, such as Panasonic’s Super Dynamic III. It also has built-in intelligent technology, including automatic scene-change detection and automatic tracking and back focus to ensure perfect focus when switching from color to black and white. New megapixel cameras provide volumes of detailed data that allow video analytic middleware to perform many complex operations. In addition to the surveillance benefits, they improve forensic investigations of recorded images by providing a large amount of recorded data.

While imaging technology will continue to improve, providing ever-better identification capabilities, the greater advancements will be in improved video analytics, Kanestrin said. Whether software-driven or residing in the camera hardware itself, analytics will enable security management to create individualized rules and policies to deliver timely information and alerts to deter or prevent incidents and to apprehend and prosecute perpetrators.

“With time, there will be increasing integration of security systems with other retail operational systems, such as point of sale,” Kanestrin said.

This convergence will cause the issue of technology connectivity to grow. Like IBM, Panasonic is addressing this now by forming partnerships with other technology leaders, enabling an open exchange of information to foster seamless connectivity. This was the impetus behind the formation of the Panasonic Solution Developer Network, a partnership program for manufacturers and solution providers who develop market-leading integrated solutions that support or use Panasonic security products.

OnSSI’s Knapp scores the manufacturing industry high on meeting the current security needs in retail. IP-based video surveillance technology, with the integration of video analytics, provides a greatly enhanced level of security and enables improved response, he said. Video images are more accurate, resulting in much more successful deterrence, apprehension, reliable evidence and prosecution.

Retailers now have the ability to manage an unlimited number of cameras at multiple sites with synchronized playback control and navigation maps for quick access to cameras. For example, OnSSI’s Ocularis video management and control platform has an interface that allows users to build the system the way they need it.

The trends in the security industry today mirror the trends of business in general, Knapp said.

“The developments of the last 20 years have fundamentally and permanently transformed the way business is done, the way people interact and our expectations of information availability. At the same time, the security industry has burgeoned with the recognition of the need to protect our citizens, businesses and property against natural and manmade risks,” he said.

The industry is leveraging the improvements in communications technology, image quality and intelligent video analytics so profitability increases with the number of cameras.

“Most, if not all, of th-e current trends and technical developments in the security industry relate to the development and growth of the Internet as a central force in operations, functioning and user interface,” Knapp said. “Today, even a very small business has the expectation that they will not only be able to access their information remotely, but also that they will be able to control cameras and views remotely.

“Retailers are finding it necessary to make fundamental changes to the way they secure their locations,” Knapp said. “Flexible and seamless integration of enterprise security--related and other applications, and enhanced access and usability, will result in more profitable and revenue generating security technology implementations across the enterprise.”

SWEDBERG is a freelance writer based in western Washington. She can be reached at claire_swedberg@msn.com.