There are a number of important benefits – beyond loss prevention analytics – that can be derived throughout the organization from implementing DVR camera systems. Following are some of the highlights by business area. [Editor’s Note: These observations were excerpted from “Leveraging DVR System Analytics Throughout the Organization,” which was written by Jen Richard, then of West 49 stores, and originally published in 2010.]
Store Operations. The traffic-conversion aspect of DVR analytics was our initial focus because it is the quickest win; it is easy to support operations with the implementation and a clear ROI will be simple to calculate.
In the long term and with POS integration, we had the opportunity to leverage the DVR camera system analytics as a multi-dimensional retail tool (MDRT). I borrowed this term from my colleague and friend, Andrew Buchanan (formerly at Mark’s Work Wearhouse). It’s been a great way to convey DVR benefits to all of the department silos within our retail team.
People Counting. Store operations could leverage people count aspect of video analytics for traffic-conversion data. The data helped to identify, confirm, and improve what we know about proper sales floor coverage and employee productivity. A new metric could be added to our arsenal of sales KPIs thanks to this tool, which enabled the store operations team to drive sales and maximize their payroll budgets.
In the past, we knew sales for each store, but we had no idea how many customers came in and did not make a purchase. With traffic conversion, we can challenge store performance levels and make necessary changes to improve sales-conversion percentages.
One of the primary benefits of the analytics software is that it is smart enough to know the difference between harmless motion, such as a poster swaying, and threatening motions, such as a person approaching a secure area. From a retail traffic counting standpoint, it distinguishes the direction of human movement, which allows us to have a clean customer traffic count of those who entered our store, without falsely including the exit of the customer to our count, which can happen with traditional beam-sensor technology.
We can also use video to demonstrate the service behavior that works versus the behavior that shows opportunity for improvement. For days where conversion is low, we can spot-check customer service and provide photos or video segments to demonstrate that
• Service was great, but the product didn’t compel the customer to buy today, or
• Service was not optimal and therefore impacted the customer’s shopping experience at our store.
These real store examples make a huge impact on building associate training, customer awareness, and positive selling behaviors.
Dwell Time. With the POS integration, operations could leverage human recognition aspect of video analytics to assess customer dwell time and sales conversion by department. For example, in our shoe department, if we confirmed the number of customers visiting that section, how long the customers linger, and compare that to our shoe sales at the register, then we could confirm if our conversion rate was good, or if adding better sales coverage in the department would help increase shoe department sales at the register.
In another example, we could leverage dwell-time information to determine how long customers had to wait in line before they were cashed out.
We could also tie the DVR traffic information into our updated time-and-attendance system. With the completion of the HR system update, we had the ability to layer traffic count into its scheduling function. The traffic conversion data helps to define the store schedule, even to the level of identifying which departments require a focused coverage based on the dwell-time information.
Marketing and Advertising. In the short term, marketing and advertising could leverage people count aspect of video analytics to confirm if their campaigns resulted in a lift in foot traffic. Marketing and advertising want to confirm if there was a spike in traffic and/or sales after an advertisement is run to determine whether or not a particular marketing campaign pays off.
They are also interested in using basic traffic conversions to determine if television, radio, or billboard campaigns had any impact on the volume of customer traffic to a specific region or during a specific time period. Sales results alone are not a true or complete measurement for their success. They may have successfully increased foot traffic to the location; however, there may not have been a significant sales lift because allocation levels were poor or customer service was poor.
These factors are a concern to our business, but the lift in traffic to the store tells us that a marketing campaign was actually a success. In the long term and with POS integration to our DVR software, marketing and advertising could leverage human recognition aspect of video analytics to assess customer dwell time and sales conversion by department. This enabled them to confirm that their marketing campaign did impact customer traffic and flow to the area of promotional focus within the store and that the customers shopping in those areas converted to additional sales at the register.
Merchandising and Planning. In the long term, planning and visual merchandising groups could the leverage human recognition aspect of video analytics to see where customers are going in the store and how long they are staying in at fixtures, tables, and specific areas of the store. They can use dwell-time analytics to guide higher margin goods to the fixtures or areas of the store where customers spend the majority of their time.
This benefit will take longer to coordinate and establish parameters for reporting so that decisions to remerchandise can be made quickly to impact sales. What may be the end result is a proven footprint of fixture placement for high-margin goods in our stores. This had a potential influence on the type of visual displays we created, could confirm if hanging or folding product is more effective in getting customers to linger longer, and could identify what is attracting them to the area. If we weren’t converting in certain areas, we could determine the reason why, such as price point, sizes, color options, customer service, or other issues.
Resource Protection. In the short term, video analytics allowed us to identify and investigate issues quickly, which increased our recoveries and reduce ongoing loss. Another benefit when it comes to loss prevention analytics is the ability to detect possible training deficiencies before the mistakes get out of hand. We could also use the missing-object capabilities of DVR analytics on our high-ticket items, such as watches, sunglasses, and headphones.
In the long term and with POS integration to our DVR software, our resource protection organization could also leverage human recognition to set up specific areas for heat-mapping detection, which flags transactions where the customer is not present. We could also leverage POS text overlay to help identify issues with employee collusion, such as free-bagging, where more product is passed off to an accomplice than is rung through the register. This type of theft is a huge risk in our retail environment.
This article was excerpted from “Leveraging DVR Camera System Analytics Throughout the Organization,” which was originally published in 2010. This article was updated October 5, 2016.