Get Our Email Newsletter

Making the Most of Loss Prevention Technology

More than ever, it seems that those in loss prevention are being faced with a plethora of new loss prevention technology solutions. In fact, at a recent loss prevention conference organized by the Retail Industry Leaders Association (RILA), over 37 different technologies were being promoted, including global positioning systems (GPS), electronic article surveillance (EAS), and facial recognition.

To help bring some order and sense to this array of loss prevention technology choices, I used a research method called narrative content analysis. This technique is popular in social science and is often used to judge the mood of a certain audience by looking at the number of times particular words, phrases, or emotions are used in written or even spoken form.

In the early years of its application, the analysis was displayed in the form of a data table with word counts. More recently, free online software developed by Jonathan Feinberg of wordle.net has helped researchers display their results in the form of a word picture, with the frequency of use dictating the overall size of the individual words.

For my analysis, and with thanks to Lisa LaBruno and Tripp Taylor of RILA, I was able to analyze the words provided by the 127 vendors in a mobile app RILA developed for its conference. Vendors described their organizations and the technologies they were promoting. Each vendor was limited to 500 words, and a total of 13,944 words were analyzed.

- Digital Partner -

 

In total, I found in the full text 124 references to a specific technology. As expected, many were mentioned more than once. So from the total of 124, I identified just 37 as unique and distinct. The most frequent of those 37 unique technologies was video, with 28 mentions out of 124. However, if you were to add the other technologies dependent on or enabled by video, namely remote monitoring, video analytics, pattern analysis, facial recognition, and scan avoidance, the total number of mentions of this broader “video” category came to 55, accounting for 44 percent of the total. The next most popular technologies were access control with nine mentions, radio frequency identification (RFID) with seven mentions, and then EAS with seven mentions.

I next used the software to create the word cloud shown here, which illustrates by the size of the words, the relative frequency of mentions of the 37 technologies.

In this word cloud, “video” is displayed in the largest type because of its frequency of 28, while RFID with just a frequency of seven is displayed in a smaller type. Those with the smallest types are those like Internet monitoring, which only had one mention.

LP Solutions

I think there are three conclusions that can be drawn from this analysis, and I will explore each in further detail. But to summarize:

  • There is a clear expectation from the vendors, based on input from market intelligence, that there is a large demand for video technology. Their reasons to be optimistic are no surprise given the advancements in the technology itself and the reduced cost of ownership; however, it is not clear whether the skills, expertise, and capacity within the loss prevention team has kept pace and that the industry is ready to unlock the full potential of the technology.
  • The industry can and should help shape the technologies of tomorrow, ensuring that the best thinking of loss prevention technology experts is being directed through a process of collaboration to finding new ideas to address problems that matter most to retailers. While the technologies being promoted by these vendors are in demand today, it is clear that in the emerging omni-channel retail context, with self-scanning, click and collect, and so forth, there will be a demand for new technologies to help manage malicious and non-malicious losses.
  • With so many technology choices and even more emerging, those skills, tools, and techniques the loss prevention function develops and improves, as professional managers of technologies, will become increasingly valued by their organizations in the future.

Core Competencies

The concept of core competencies in business was made famous in the 1960s by the management guru Peter Drucker. He stated that organizations should seek to identify their unique points of difference. Once these skills and capabilities have been identified, he argued that organizations should disproportionately invest in them and focus on these competencies to grow their businesses. Fifty years later, organizations continue to use this thinking to drive major changes in strategy.

For LP teams, if past core competencies have included investigations, audits, and incident management, I believe that video management now needs to be established as a new core competency in the loss prevention technology arena.

Today, it is not clear this is the case since video has traditionally been seen as just a piece of equipment for the stores, heavily reliant on available resources to either monitor live footage in dark rooms in the backs of stores or to manually review huge quantities of footage to build a case or identify incidents. This has limited its value and relevance to the broader organization beyond loss prevention.

- Digital Partner -

However, even in the last few years, video technology and the other technologies it enables have been transformed. For example:

  • Digital technology enables material for case management to be collected and collated much more quickly. By setting up alerts that look for exceptions, incidents can be acted on in near real time and reviews can be speeded up, which has been seen as a significant change transforming the perceived value of this technology.
  • Smaller, higher-resolution security video cameras provide sharper images and fewer blind spots at increasingly lower costs.
  • Networking, video compression, cloud technologies, and improved broadband speeds have enabled greater remote monitoring by field managers, allowing real-time interventions while central hubs with two-way communications can provide local reassurance through “virtual” visibility and the opportunity to see, send alerts to, and talk to those in many stores, all from one location.
  • The integration of cameras into store infrastructures, including doors, shop alarm systems, refrigeration, point-of-sale registers, EAS gates, lighting, and more, generate new opportunities for value creation. For example, one big-box retailer in the United States is exploring the potential energy savings of being able to remotely turn off the lights the store managers forget to switch off when they lock up and leave the store after closing.
  • Complex data analysis and algorithms made possible by technology advances enable pattern and image recognition, creating new capabilities such as scan avoidance and facial recognition.

While these big changes—moving video from being seen as just a uni-functional piece of store equipment to a technology with enormous potential—are increasingly evident, it is not wholly clear that these new capabilities are being fully appreciated by either store staff or retail executives. As one loss prevention director shared with me, the video loss prevention technology now available to stores is, in car terms, like a Ferrari, yet we are asking it to be driven by novice drivers.

As I visit retail locations, I see this myself as I witness retail security guards and store associates using just 5 percent of the potential capability of the video systems installed. In one example, I was visiting a distribution center of a major UK retailer, where despite investing in over 500 Internet protocol (IP) cameras for the location and a full video management software suite, the security team was still using video as though it were their own DVR system at home.

Further, in those retailers exploring new ways to leverage video, my concern is that as they build their “Ferrari,” it becomes reliant on others who may not have the time, skills, or inclination to drive it.

For example, video can be set up to deliver alerts via text message to security guards or other staff in the stores as and when high-theft items are selected from shelves. This is a terrific capability, one that can deliver the great customer service that thieves hate, but it is reliant on the response of the increasingly scarce and often under-trained security guard or store associate.

In another example, a retailer piloting scan-avoidance technologies that provided the store manager with video evidence of their cashiers not scanning certain items, reported that while this loss prevention technology gave them many more possible cases to investigate than just the traditional point-of-sale exception tool, they simply did not have the time to handle so many cases, nor in some cases the confidence or inclination for this type of work that takes even more time away from delivering great customer service.

To address potential gaps in current and future video capability and capacity, loss prevention leaders could start by defining and aligning their organizations to a five-year strategy and business case for video. This exercise can help identify the many different drivers of value to the organization and the financial benefits they deliver. Some will be hard to quantify, such as staff feeling safer or the marketing department knowing the number of shoppers turning left or right on entering the store. However, others will be easier to quantify, such as productivity savings from moving to remote monitoring or reducing energy bills by turning off the lights store managers forget to switch off.

With the use cases identified, the capabilities required to execute and the head count needed to deliver can then be calculated. Without doubt, a broad range of skills will be needed to manage video. For example, there will be a need for highly skilled individuals who know how to fully leverage video for monitoring purposes. There will be those that know how to organise and deliver an efficient and effective remote monitoring centre, and there will be those who can sell and promote video as a capability to other functions in the organization.

Some organizations may consider some of these competencies, shopper insights being one example, as ones they believe their organizations can uniquely develop and deliver themselves for competitive advantage, while other competencies such as the remote video monitoring of stores by security guards may be viewed as a task that could be outsourced.

While the overly simplified approaches to developing and delivering a video strategy laid out in the points above will be different for each organization, what I think is inescapable is the conclusion that video is now an advanced technology and not simply a piece of store equipment, and as such it needs managing, and most importantly, a strategy needs developing to build capability and capacity so that its potential is fully exploited.

The LP industry is fortunate to have attracted the attention and the investment of loss prevention technology vendors, both from well-established names as well as new start-up companies, all of whom believe they have big, new ideas to help resolve the industy’s problems.

While many of the technologies they have already brought to the industry have led to improvements and a positive return on investment (ROI) for their clients, I believe the industry can do a better job together to help inform the loss prevention technology expert of their emerging problems and the specific requirements and aspirations for new solutions.

The recent report by Professor Adrian Beck and Dr. Matt Hopkins on mobile self-scanning provides a perfect example of retailing research that provides technology experts with exactly these requirements. In their report, they document a case study that demonstrates the problem and how losses on the transactions that used a mobile self-scanning device were found to be four times higher than the traditional process where a cashier will scan the goods at a traditional POS system and then take payment from the shopper before they leave the store.

To mitigate this problem and the risk of non-scanning, they identified the opportunity to increase awareness to would-be thieves of the potential risk of being caught not scanning at all points of shopper journey from starting the app to leaving the store. Across this journey, they identified that some controls already exist—for example, at the beginning only loyalty card holders can use the app, and at the end, random audits are performed. However, the unmet need is in the middle of the journey—in the store itself when the scanning (or not) of products occurs.

To address this gap, they identified three broad categories of solutions and 13 different technology ideas. For any technology expert reading this report, there could not be a clearer articulation of the unmet need and the requirements for new technology.

 

But mobile self-scanning is just one problem where the industry has unmet needs and aspirations for better technologies. I believe that the role of groups like the ECR Europe Shrink and OSA group, the UK forums established by ORIS, and RILA in the United States should be to bring together the industry to more deeply research the current problems all retailers face and to articulate, just as the mobile self-scanning report did, the unmet needs and the aspirations for new technology solutions.

This content is excerpted from an article that originally appeared in LP Magazine Europe in 2015. It was updated July 6, 2017.

Loss Prevention Magazine updates delivered to your inbox

Get the free daily newsletter read by thousands of loss prevention professionals, security, and retail management from the store level to the c-suite.

What's New

Digital Partners

Become a Digital Partner

Violence in the Workplace

Download this 34-page special report from Loss Prevention Magazine about types and frequency of violent incidents, impacts on employees and customers, effectiveness of tools and training, and much more.

Webinars

View All | Sponsor a Webinar

Whitepapers

View All | Submit a Whitepaper

LP Solutions

View All | Submit Your Content

Loss Prevention Media Logo

Stay up-to-date with our free email newsletter

The trusted newsletter for loss prevention professionals, security and retail management. Get the latest news, best practices, technology updates, management tips, career opportunities and more.

No, thank you.

View our privacy policy.