WHY RETAILERS ARE INCREASINGLY INVESTING IN VIDEO ANALYTICS?

In one of ECR Retail Loss Group‘s large surveys on the development of video technologies in retail, experts paid special attention to the economic and practical justification of their use in the work of retailers. Respondents (owners, managers of retail enterprises) were asked questions about how exactly and why they use video technologies in their stores. Although retail is the main business sector that traditionally invests in video surveillance technologies, the data obtained in the course of the survey raises some questions about the effectiveness and feasibility of such investments.

The rather vague strategic goals of companies to provide control, create a safe environment for employees and visitors are unlikely to be realized with such a tool. To the deceptively simple question: «What is the main purpose of video surveillance in your business?» many respondents tried very hard to give an exhaustive answer: «…to be honest, I don’t really understand what it’s for — in terms of theft, it’s quite limited». For some, the presence of CCTV is seen as an insurance policy in case something goes wrong, with a ‘just in case’ prudence on the part of the business. The visible presence of surveillance creates a sense of security, but not security itself. The economic feasibility of such investments is difficult to assess.

Increase in shoplifting

But the daily losses from shoplifting are very real, with retailers’ losses only increasing over the past six months, a common trend found in many countries around the world.

Tidningen Näringslivet reports that the theft of meat from grocery stores by professional thieves has increased dramatically in Sweden over the past few months, and especially since the beginning of the year. Criminals are increasingly reselling stolen high-value meat products to restaurants. It has also been noted that unscrupulous shoppers pay for one type of meat and take more expensive products off the counter. Some small stores steal beef fillets worth about 100 thousand Swedish kronor (700 thousand rubles) per year, and employees do not immediately detect the theft.

As Insider writes, according to the U.S. National Retail Federation (NRF), retail theft accounts for a significant portion of the nearly $95 billion in annual inventory declines. The CEO of the Walmart chain said in December 2022 that theft levels have reached an all-time high.

Fighting theft and preventing theft is complicated by the fact that many stores’ internal rules prohibit employees from detaining violators for the safety of the employees and other visitors.

And retrospective review of video archives of surveillance camera recordings only provides an opportunity to record the fact of violation or theft.

New technological solutions to reduce losses in retailing

Video analytics technologies, AI, mathematical modeling, digitization and behavioral prediction are ways of developing video technologies for retail, and the possibility of their proactive use. Predictive video analytics embedded in video surveillance systems, an automated system of prediction and notification of the event before theft occurs, preventive intervention of store personnel or security officers will prevent a significant number of thefts and significantly reduce retailers’ losses.