Written by Hedgie Bartol and Jackie Andersen, Axis Communications
Tuesday, 05 June 2012 07:51
Retailers use video surveillance cameras for a host of reasons — everything from loss prevention to customer safety to liability protection. But with the rise of IP-based video surveillance accompanied by the advent of intelligent retail analytics, video can now be tapped as an amazing source for timely business intelligence. Still, retailers and their integrator partners need to cut through the CSI-type hype and choose reliable analytics that will work for their business.
Bartol and Andersen share their perspectives in the article below.
The Point Of People Counting: Conversion Rates Vs. Staffing
People counting, or store traffic analysis, is one of the primary real world uses for video analytics and can provide detailed insight into who is in the store.
Jackie Andersen: A compelling reason for people counting is to determine your customer sales conversion rates. Measuring your traffic is the first step towards controlling store flow and eventually improving your floor plan and merchandising strategies. Sales conversion – calculating the number of sales transactions divided by the number of people who enter your store – helps you separate the browsers from the buyers.
Validating this specific measurement via video content is an essential Key Performance Indicator (KPI) for brick and mortar retailers. This can be achieved transparently and more accurately with a people counting analytic than with an employee counting the number of shoppers that cross the threshold.
Hedgie Bartol: Conversion rates are all well and good, but for me, the real value of people counting comes into play for staff scheduling. If you know how many people come in at specific times of the day, you can determine whether to add more staff to a particular shift or when to open more registers. Older counting technologies were based on a person breaking the beam of an infrared detector. This often led to inaccurate totals when someone stood or wandered in front of the beam. Newer people counting algorithms that tie into video cameratechnologies require someone to cross a full plane before they are counting, which gives you a much more accurate tally.
The Point of Dwell Time Analysis – Merchandising vs. Loitering
Dwell time analysis, or “stickiness,” provides real-time statistic about the appeal of a store layout to browsers, impulse buyers and intentional shoppers. Used properly, it helps retailers measure traffic ebbs and flows and make better layout and staffing decisions.
Jackie Andersen: I think stickiness is a key measurement that can transform so-so product placement into great product placement. Retailers have short windows of opportunity to determine if a product is moving or if new products are receiving the best possible customer exposure. If shelves of popular merchandise aren’t kept well-stocked, shoppers may decide to spend their dollars elsewhere. Dwell time analytics help you decide the best places to display specific merchandise by revealing traffic patterns, heat maps, product exposure, purchasing trends and, of course, dwell times. With real-time analytics, you can change merchandising strategies on the fly to help pump up sales. It also opens up opportunities to focus on activities that build shopper loyalty, move paid-for inventory that’s just sitting on the shelves and quickly replenish fast moving items before you experience out-of-stocks on the selling floor.
Hedgie Bartol: Agreed that dwell time analytics can help increase sales, and that’s a definite next-level usage. But depending on the store’s needs, I believe its biggest impact is actually in loss prevention. If you run dwell time analytics in high theft areas you’ll know when someone is standing in front of a shelf too long. It could be that they’re just being indecisive about the purchase and need customer assistance, but more likely they’re considering an attempt to steal something or they’re already in the process of doing it and swiping large quantities. With the rise of “Flash Robs,” a dwell time analytic could alert you to a group gathering outside, or even if someone is waiting outside for a manager to close up shop.
The Point of Visual Scanning Oversight: Loss vs. Training
Visual scanning oversight, comparing what’s slipping past the register against what’s being run up, provides a way for retailers to reconcile sales receipts against inventory. By tying video surveillance to checkout activity, retailers can analyze and correct staff problems.
Jackie Andersen: Shrink often happens at the point of purchase and therefore it’s an excellent location for analytic oversight – whether to discourage employee sweethearting, or catch a customer accidentally or deliberately leaving items unrung in the bottom of the basket. Video cameras installed within the checkout lanes that are linked to the POS transaction log provide consistent visual oversight that leaves no room for doubt. It can eliminate any opportunity for denial by providing the crucial visual context disclosing that the filet mignon was just scanned in as a candy bar. When the cameras link to “Bottom of the Basket” sensors, retailers can eliminate the intentional or unintentional loss by detecting the large items sitting underneath the basket of the shopping cart.
Hedgie Bartol: And when the visual scanning oversight system does catch a problem, it’s then up to the store manager put this data to use: It becomes a terrific tool to pinpoint staff training opportunities. When the analytic picks up on improper scanning techniques or failure to check the Bottom of the Basket, you can target the offenders and show them what they missed. The quick catch of errors will also gently remind them that their actions are under observation, which often is a sufficient deterrent for the occasional impulse to sweetheart – killing two birds. Not only will you impact shrink, but well-trained staff tend to stay longer, which saves on the cost of employee turnover, too.
Can Retail Analytics Work For You?
Just like smartphones are so much more than phones, today’s network cameras bring a level of intelligent surveillance that analog CCTV could never deliver. Analytics have matured from an untested promise to a quantifiable metrics tool. So regardless of your point of view – whether you’re driven by marketing, LP or operational efficiencies – incorporating analytics into your business plan can be a win-win proposition.
Hedgie Bartol, Business Development Manager, Retail, Axis Communications, North America serves as a business development manager for the retail segment in North America at Axis Communications. In this role, Mr. Bartol works closely with partners and retailers on strategic surveillance installations designed to maximize loss prevention and streamline business operations.
Jackie Andersen, Business Development Manager, Retail, Axis Communications, North America, actively researches retail marketing opportunities and works closely with partners on strategic surveillance installations designed to maximize loss prevention and streamline business operations.