It’s safe to say that 2020 will be a pivotal year for the retail industry. As more consumers turn to e-commerce giants like Amazon for their shopping needs, many traditional brick-and-mortar retailers are feeling the pinch.
In 2019 alone, more than 9,000 retail stores closed down. Some analysts now predict up to 75,000 more retail stores will shut their doors by 2026 as online shopping grows to account for 25 percent of all retail sales.
This kind of intense rationalization means retailers are watching every penny and placing a greater emphasis on customer satisfaction. It’s also renewed interest in technology that can produce data-driven insights in retail, information that can be used to create more personalized products and services and more unique in-store customer experiences.
It may sound like a new concept to some, but video surveillance is one tool that is unlocking many of these valuable business insights.
Moving Beyond Security to Intelligent Video
Retailers traditionally view video surveillance as a security and loss prevention tool. In the event of shoplifting or theft, security personnel can pull the video recording and supply evidence to law enforcement.
This aspect of video surveillance won’t change (in fact, it’s increasingly relevant, as we’ll explore in this article). But beyond security and loss prevention, other more innovative uses for video are now possible thanks to technology integrations and intelligent software applications that can quickly analyze video to pull out relevant business insights.
When combined with analytics, point-of-sale (POS) transaction data, and the right software, video can deliver a wealth of intelligence about a retailer’s operations and customer service, promotional efforts, merchandising success, and more. This information, sometimes called “intelligent video,” can be used to reduce shrink, improve operations, and increase retail profitability.
Harnessing the Power of Analytics
Sound too good to be true? Just think for a moment about the power of accurate customer analytics. For years now, e-commerce retailers have been collecting data on consumer preferences with cookies and other web-tracking tools. Online retailers can tell you what time each consumer visited their site, what pages and products they viewed, and what exactly they purchased. They can then use this information to tailor their site to serve the right product to the right person at exactly the right time.
Intelligent video surveillance can deliver many of these same insights for brick-and-mortar retailers.
By leveraging data from sensors capturing people counting, queue length, and dwell time analytics, today’s intelligent video solutions can uncover total store visits, foot traffic patterns, and even preferred products and promotions.
This allows retailers to better understand how customers move into and around their physical spaces, and what exactly attracts their attention. High-value merchandise and important promotions can be placed in strategic locations in order to maximize sales.
But this is just the start. Because video captures nearly everything that’s happening inside a retail location, it offers an abundance of additional information. Again, with the addition of transaction data and analytics, retailers can learn:
- How many customers are waiting in line, and how long on average they are waiting. This data can help a business determine if they need to hire more staff, or perhaps just add another employee on their busiest days.
- Which of their retail locations see the greatest number of visitors and what date and time each person visited. By comparing this information with POS data, retailers can calculate conversion rates to learn if everyone who visited their business actually purchased something.
- Which employees sell the most of which products, to evaluate promotional success and reward high-performing associates.
All of this information can help retailers set and measure key performance indicators (KPIs) to analyze sales, service, and operational trends over time.
Satisfying Digitally-savvy Consumers
The data insights from intelligent video can also be extended to retail warehouses to help with inventory management.
RFID data, which many retailers use to track products, can be integrated with surveillance video to enable visual investigations into missing inventory and help with stock loss prevention. This type of solution can be extremely useful for retailers that are focused on improving their omni-channel experience. Up to 87 percent of consumers now research their purchases online, and many expect items to be available in-store.
Intelligent video integrated with RFID data can help retailers better tackle the challenges of inventory management in the age of the digitally-savvy consumer.
Controlling Shrink
As mentioned, video surveillance will continue to be a cornerstone of retail security and loss prevention programs in 2020, but retailers that deploy intelligent video can maximize the effectiveness of their LP programs and speed investigations. Because these solutions tie video to each POS transaction, retailers can visually investigate unusual voids, refunds, or exchanges to see what occurred. Product returns, too, can be captured on video, enabling retailers to tackle the growing issue of return fraud, which costs US retailers an estimated $18.4 billion each year.
With these type of integrations, video is “tagged” at each transaction, so retailers can search for specific transactions by date, time, product type, employee, or transaction amount and click through to see the associated video.
With theft, fraud, and other losses from retail shrink now topping $50 billion, using intelligent video at the POS can more than pay for itself over the long-term.
Given that some retailers grapple with large capital expenditures, it’s worth noting that the features mentioned are often available in a hosted or video surveillance as a service (VSaaS) solution. Many VSaaS solutions are available for a monthly fee, and some also offer managed services, alleviating the burden of surveillance device management. With hosted or VSaaS solutions, retailers can rely on their provider for the day-to-day maintenance of the system, including software and firmware upgrades, troubleshooting, and more.
Greater ROI
As 2020 unfolds, the growing use of e-commerce will continue to pose challenges for retailers. But organizations that invest in data-driven technologies can stay one step ahead of the game by tailoring their products and services to meet consumer demand. Today’s intelligent video and VSaaS solutions can offer many of these valuable data insights, in addition to security and loss prevention tools, ensuring retailers get the greatest return on their technology investment.
Net Payne is the chief sales and marketing officer for March Networks, a leading provider of intelligent IP video surveillance and business intelligence solutions used by 300-plus retail organizations worldwide.