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The video security market in retail is moving at a measured pace through what had been expected to be a revolutionary shift—from analog to digital, from closed-circuit surveillance systems to Internet protocol (IP). And while the cost of technology, the size of retailers’ systems and then two years of recession has postponed the revolution, the changes are underway.
Today, a majority of retailers have transitioned, at least in part, from the relatively passive, analog closed-circuit television (CCTV) video systems to more sophisticated, proactive, network-based IP video solutions that, in some cases, include integrated video analytics. But the changes are happening in pieces, and the importance of versatility in the technology and for those who install and maintain the systems has become the deal-maker.
Most retailers made some investments in DVR technology in the late 1990s through early 2000s. At that time, the DVRs deployed were stand-alone, self-contained, closed ecosystems—-limited to the four walls of the retail store, said Elan Moriah, president, Verint Video Intelligence Solutions, Melville, N.Y. Few retailers plan to replace that investment with an entirely new IP-based system with analytics and higher definition. Retailers today seek to invest in solutions that help them realize the benefits of IP video, while still being able to leverage those legacy video investments, Moriah said.
The technology that is available is impressive. High-definition, IP-based cameras are replacing the grainy black and white images retailers of the past struggled with. Now, there are ultra-clear images with bigger field of view and the ability to zoom into a specific image even after it is captured.
“The beauty is that now I can really see an image,” said Robert Gailing, national sales manager, security products, Sanyo North America.
There are many solutions available on the market. Panasonic offers an integrated point of sale (POS) and surveillance system that includes POS terminals, high-resolution network cameras and displays from Panasonic, along with Quadrox WebCCTV network video recording technology and Aloha Data Systems’ POS software. This system allows store-owners and managers to search and retrieve key loss-prevention metrics and easily access video recordings from transactions of interest that are delivered directly to the POS application.
The cost of technology is still high; however, the cost related to shrinkage is likely to be many times higher if the cheaper security system fails. Despite that, though, vendors agree that retailers need to be offered a system that is appropriate for their needs, and often, that means something that can transition as the technology continues to evolve.
Throughout 2008 and 2009, the recession put the brakes on many projects, while others were sold solely on price, often leaving contractors and integrators with the task of making decisions on big-ticket items that would reduce costs. As economic pressures ease, contractors are seeking the technology with the greatest immediate value and for the customers [the greatest versatility].
Surveillance allows retailers to deter against fall claims or theft. If someone stands in an aisle too long, another possible theft scenario, the system can be designed to send an alert or focus cameras in on that activity. And because the technology can be programmed to record only if someone walks into a field, data storage space is not as great a factor as in the past.
Gailing said those buying the technology or recommending it to their customers should consider multiple factors: the service and support that the technology vendor provides, the longevity of the company’s existence and how well the solution fits the needs of the customer.
“Don’t jeopardize the whole project with a low quote,” Gailing said.
In the surveillance market, the cameras are still ahead of the bandwidth and storage capacity issues, and new high-definition cameras are leading the pack. Retailers, however, still are stuck with analog technology, and the transition has been slower than industry watchers had expected. Gailing estimates that about 60 percent of surveillance systems in the retail market use analog equipment. Installing a network IP-based camera that is digital, he said, still offers a better return on investment and should be a safe bet for integrators and contractors.
“We’re in a transition point in the market,” Gailing said, which means technology that helps allow the shift is going to be the best choice for many. “If your customers are reluctant to make such a jump [into networked or digital cameras], the idea is to look for cameras that are configurable enough to allow for a migration from analog to digital. You have to understand where the customer wants to go and find the technology that is available.”
Moriah agreed. Many retailers, he said, want to use the technology they already have and refresh it, for example, a follow-on digital video platform that can reuse existing infrastructure, allow for an easy bridge for information technology (IT) involvement, leverage current analog cameras, and be network--connected. Increasingly, organizations are seeking networked video to improve business and operational effectiveness.
“In the coming year,” Moriah said, “it’s expected that more will follow suit, continuing the transition to more intelligent and scalable video solutions. Many retailers have hundreds, even thousands, of locations, all installed with analog cameras and coax cable infrastructure. For these stores, the cost of replacing the entire existing analog infrastructure would represent an investment on a scale that most retailers are unable or unwilling to commit.”
Additionally, analog cameras that have been installed in the past two to four years are high-quality, low-cost models that in most cases still provide very good images.
The challenge many retailers face is to leverage existing infrastructure and refresh it with encoders and a software-based, head-end solution. Most users of analog technology will need to continue using their existing analog video infrastructure in parallel to newly introduced IP-based video solutions.
“We believe that, as this technology evolves,” Moriah said, “the market will favor those able to support their customers through the transition.”
Benefits of analytics
Among the technologies that can have a near immediate impact is analytics. Verint’s Nextiva Retail solution is one example. This traffic-analysis solution helps with work force optimization, identifying shopper behaviors and patterns, determining “hot spots,” gauging POS success, and identifying high profit products—all key to enhancing and advancing store operations and merchandising. By using Verint’s complete line of enterprise software, video encoders, IP cameras, intelligent DVRs and retail traffic analytics, customers can benefit from a single technology provider. The company’s solutions feature built-in interoperability, leading to more efficient service and support and a lower total cost of ownership.
According to IT consultant Tom -Davenport, retailers are deploying analytics in as many as 18 categories from boosting sales to reducing shrinkage. With the boon of social media and mobile technology, some retailers are poised to use these technologies to engage their customers—sending coupons, gift certificates or advertising based on the location of a customer in the store.
Armed with analytics technology, and by leveraging existing video footage, retailers find themselves in a better position than ever to make informed decisions about their business operations and also validate assumptions for marketing and product placement. They also can quickly extract and search for trends and patterns in customer behavior for decisions such as staffing at peak times. When combined with POS data on customer-buying patterns, these solutions can help determine the success rate of specific promotions, optimize store layout and design to influence in-store navigation, maximize sales, and improve the customer experience.
Looking ahead, Moriah foresees a convergence of the disparate systems currently managed under the umbrella of retail asset protection/loss prevention. He has a vision for the “store of the future,” where retailers would have the ability to more tightly integrate environmental aspects of the store into a more unified solution.
Today, most retailers use CCTV, POS systems, electronic article surveillance (EAS) for theft prevention and fire systems for safety. They also manage the various locks and access to their multiple facilities. The store of the future would unify these operational aspects—including lighting control, HVAC, utility monitoring, alarms and access controls—along with detection of occurrences involving smoke/fire in the retail environment, water/flooding, shock and vibration scenarios, and more, Moriah said. A convergence of the platforms required to manage and maintain all of those disparate systems can enable more effective and efficient business management.
“We believe that video analytics will play a strategic role as part of that vision based on the wealth of information that will need to be collected in such environments and the potential to significantly improve the operational effectiveness in the store of the future,” he said.
SWEDBERG is a freelance writer based in western Washington. She can be reached at [email protected].