1 week Ago
Freddy Kuo, Chairman of Luminys Systems Corporation and Special Office Executive Assistant at Foxlink. Today's retailers are in an impossible position. Rampant shoplifting is eating profit margins: According to the National Retail Federation , shoplifting incidents have risen 93% since the pre-Covid period.
The tactics retailers adopted to combat this crisis are alienating customers and hurting overall sales: As Walgreens CEO Tim Wentworth conceded on an earnings call in January, "when you lock things up...
you don't sell as many of them. We've kind of proven that pretty conclusively." This crisis affects not only big chains like Walgreens—which has already announced it will be closing hundreds of stores by the end of the year—but also local businesses, whose profit margins are even slimmer.
News reports from New York City, which has seen one of the country's largest surges in retail theft, show mom-and-pop store owners living in fear of the next retail attack, forced to allow only one or two people into the store at a time. Clearly, retail theft is unsustainable. It cuts profits, demoralizes staff and drives customers away.
Locking up products or making shoppers wait only worsens the problem. Retailers must find a way to protect inventory and employees without losing customers. Notably, a new tool is emerging: advanced video security.
Yes, stores have used video surveillance for decades, but outdated CCTV can’t compare to today’s tech. Modern video security offers cloud-based flexibility and proactive deterrence—giving retailers a real chance to fight back. The average chain pharmacy store may seem simple to the consumer, but retailers know just how complex these spaces are.
On any given day, hundreds, if not thousands, of customers may circulate in and out. Merchandise is continually lifted and set aside, and employees scramble about attempting to meet the demands of impatient customers. Managers and security teams can certainly track some of this activity, but their view of events will always be partial, even with the aid of conventional CCTV.
Raw video of fast-moving customer scenes can only reveal so much—and not even the major chains have the resources to continually sift through and analyze all that material. This new breed of video security offers retailers overriding, comprehensive intelligence. Underpinned by machine learning algorithms trained on massive retail-specific datasets, they can take in raw video and instantly pinpoint troubling behavior.
Like all-seeing security guards, they know the telltale signs of a potential crime in the making. The deterrence benefits here are significant. Through real-time monitoring and alerts, this technology can guide the work of on-site security personnel.
Stopping a shoplifter in the act of stealing can be dangerous, and many store policies advise against it, particularly when the value of the item is below the felony threshold. Of course, it is precisely these small, unchecked thefts that aggregate into deadly profit shrinkage. If a security guard knows via AI to track a specific person of interest, though, their mere presence can stop the theft before it happens.
Some may have concerns around privacy and the use of AI technology in video security. However, technology is available that uses an algorithm, often referred to as “similarity search,” as opposed to facial recognition, to track people and objects. This technology can look at video in real-time or in playback and analyze the characteristics captured to accurately pinpoint where a target has appeared.
This technology doesn’t use facial recognition data or require pre-registration of individuals, and no personally identifiable information (PII) is collected or used. Instead, a random number is assigned to the object and it is used in comparison to other video objects looking for a match. Additionally, advanced video security can help retailers build a case against repeat offenders and potentially help them recoup losses.
Without putting security staff in harm's way, this technology can log each stolen item over multiple visits until the total value exceeds the felony threshold—at which point they can get law enforcement involved. This quiet, unobtrusive process pays deterrence dividends far beyond the individual case, as would-be felony shoplifters come to learn that the store deploys this technology and then decide against taking the risk in the first place. The developments we are discussing here are tied closely to the rise of Video Surveillance as a Service (VSaaS), a surprisingly under-discussed component of the overall SaaS revolution.
VSaaS solutions are particularly useful for chains that demand high degrees of coordination and centralization among dozens or hundreds of stores. VSasS provides comprehensive security systems available from anywhere, which means they can provide action alerts at the individual store level while also allowing company headquarters to receive comprehensive, synthesized insights into the entirety of their business operation. One reason this is important has to do with the role that layout and social engineering play in theft deterrence.
Often, stores are busier at certain times than at others; inevitably, customers will cluster in certain parts of the store while others go relatively un-trafficked. Retail owners are engaged in a continual process of triage—scrambling to take all these factors into account and to determine precisely the most effective ways to arrange merchandise and allocate personnel. Cloud-based VSaaS solutions can optimize this process—removing ambiguity, drawing attention to bottlenecks and blind spots and letting retailers know what actually works.
There is also the unfortunate fact that, in many cases, employees themselves are stealing from companies. VSaaS solutions—coupled with advanced, integrated access controls—have a critical role to play here as well. Some degree of theft will always be inevitable: It is just the cost of doing business.
But the surge in theft that retailers have had to deal with in recent years cannot keep happening: If these numbers continue to rise, the results will be catastrophic. The new VSaaS solutions have emerged as a bright spot in a dark period for retail, and are already helping to reverse this tide of this crisis. I suspect their benefits are only just beginning to be felt, particularly in leveraging real-time analytics to deter crime and enabling quicker response times to prevent theft.
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