Loss prevention equipment is going beyond catching the misdeeds of shoppers and employees. Cameras, monitors and other devices are also helping to improve customer service and identify operational issues.
by Kim Ann Zimmermann
Snagging shoplifters and ne’er-do-well employees giving their friends discounts is the sexy side of loss prevention. Behind the scenes, there are networked video cameras, monitors, exception reporting tools and other equipment and technologies to provide backup and help loss prevention professionals with some of the legwork involved in catching thieves.
As in many areas of the supermarket, the loss prevention department has had to do more with less, especially when it comes to the equipment that supports its efforts to reduce shrink. Add to that the fact that retail crime has risen as more shoppers have been struggling to afford groceries, and the loss prevention department has been stretched to capacity.
While industry observers anticipate that loss prevention budgets will loosen up a bit in the coming year, spending is expected to remain fairly tight. To justify increased investments in security equipment and technology, supermarkets are evaluating equipment that will do more than just catch thieves. They want to use cameras, monitors and alarms that will enhance the shopping experience—by alerting store personnel if long lines are forming at the checkout, for example—and target unintentional shrink—by identifying issues such as cashiers ringing up promotional items incorrectly.
“Many retailers are feeling the pressure to return to profitability,” says Derek Rodner, vice president of product strategy for Camden, N.J.-based Agilence, Inc. “While they are looking at actions such as reducing shifts and closing stores, they are discovering that they have to find other ways to get back to profitability. One area they are investing in is equipment and technology to prevent shrink. There has been a stagnancy for the past couple of years and now there is some pent-up demand.”
Agilence’s Hawkeye POS video auditing solution identifies losses caused by operational errors, promotion execution, systemic errors and associate fraud, Rodner notes.
Loss prevention equipment is being leveraged across all areas of many organizations, which is making it easier to justify the expenditures, Rodner says. “Cameras, for example, aren’t just for the loss prevention staff to monitor shoplifting. They can be used for monitoring activity at an endcap, for example, to see if a particular promotion is driving traffic.”
One of the most significant advancements in loss prevention technology in recent years has been the addition of Internet Protocol (IP) video surveillance cameras that can stream live video over the Internet to enable remote monitoring.
According to the recently released Surveillance Survey Report, 87% of retail companies that currently use analog technology for surveillance are now considering migration strategies toward network video. The survey was conducted by the Gainesville, Fla.-based Loss Prevention Research Council and sponsored by Axis Communications, a Chelmsford, Mass.-based provider of networked video solutions.
“We’ve certainly come a long way from the limitations of analog video,” says Jackie Andersen, retail business development manager for Axis Communications. “The barriers to entry are being reduced as the cameras are becoming a lot more affordable and offering a lot more functionality.” Many retailers are repurposing their existing analog video surveillance cameras by adding video encoders that digitize analog video signals over an IP network such as a local area network, Intranet or Internet, she says.
Axis’ network cameras can be used in portrait mode, which helps support uses for the cameras beyond loss prevention. “The portrait mode provides a more meaningful view of the long aisles in grocery stores, providing better support for marketing and merchandising efforts, such as monitoring customer traffic,” she says.
Some retailers are looking to cover more areas by putting multiple megapixel cameras in one housing to provide 180-degree or even 360-degree views, according to Sergio Collazo, director of sales and marketing for Irvine, Calif.-based Toshiba America Information Systems. “This enables remote monitoring to provide better customer service,” he says.
He says this could provide retailers with real-time information about the number of customers waiting in line.
While industry experts expect more retailers to gather high-end surveillance video to be shared remotely, some say that storage and compression technology needs to be upgraded. “The technology for recording and storage has not kept up with the cameras themselves,” says Jocko Catucci, president of A1 Solution, based in Providence, R.I.
Like surveillance cameras, public view monitors are also getting drafted to provide security as well as promotional messages, according to Lee Pernice, director of retail marketing for Orlando, Fla.-based ADT Security Services, Inc.
“Retailers are recognizing that public view monitors provide a nice combination of security and promotional opportunities,” she says, adding that the company has had success placing its 8-inch public view monitors on shelves in areas with high incidences of theft, such as baby formula.
“This is really a neat application, as it can be placed on the shelf and can play any type of promotional information until the customer breaks the beam and then it becomes a public view monitor,” she says. “It is a good security application and smart retailers will use it to also generate advertising dollars.”
Monitors aren’t the only pieces of equipment providing security at the shelf. Fixture manufacturers are developing systems to strike the right balance between protecting the merchandise from theft and making it readily available to shoppers.
“Gone are the days of locking away products behind security screens and glass doors,” says Tony Kadysewski, marketing communications manager for Trion Industries, Inc., a fixture manufacturer based in Wilkes-Barre, Pa. “Any need to search for a sales associate to access a product is the kiss of death to sales. Modern anti-theft strategies invite the sale while minimizing the loss. Products that limit ‘sweeping’ and provide a staging area for customer-accessible product while protecting backstock are viewed as being among the best options.”
Alison Valiulis, public relations coordinator for the Intelligent Loss Prevention division of Southern Imperial, Inc., the Rockford, Ill.-based fixture manufacturer, agrees that retailers are looking for shopper-friendly solutions at the shelf level. “The security of merchandise that is locked or kept behind the counter often comes at the expense of sales, especially in categories like health and beauty where consumers expect convenience,” she says. “Emerging loss prevention solutions remain tough on shrink while safely returning critical products to open merchandising.”
Kadysewski says anti-theft fixtures provide viable and inexpensive loss prevention solutions in various departments. In addition, he says most manufacturers will consult on the most appropriate solution and even provide free samples for hands-on evaluation. “If you deal with the manufacturer, there is always the possibility of ‘custom-from-stock’ modification of existing offerings to better suite your specific need and environment,” he says.
The impact of loss prevention fixtures can vary depending on the type of security systems being used, according to Robb Northrup, Southern Imperial’s marketing manager. “Many of the security items such as box wraps, cable locks or soft tags, are designed to work with most grocers’ existing EAS system, if they are using one,” he says. “ The main considerations are in maintaining an inventory on loss prevention items and managing their implementation and re-use throughout a store or product section.”
While public view monitors and fixtures protect high-theft items such as HBC products and baby formula, bottom-of-basket systems are scanning the bottom of shopping carts, another area where losses can occur.
Alec Hudnut, CEO of Evolution Robotics Retail, Inc., based in Pasadena, Calif., says losses at the bottom of the basket can quickly add up for a grocer.
“What we are consistently seeing is that before installing our LaneHawk BOB [bottom-of-basket] system, supermarkets are experiencing losses of 0.1% at the bottom of the basket,” he says. “A typical checkout lane doing $10,000 a day in sales is losing $10 a day on items at the bottom of the basket that are not rung up. Multiply that by the number of lanes and add in the already slim margins that supermarkets are operating under, and that’s significant. When LaneHawk goes in, that is reduced 80% to 90%.”
He explains that the LaneHawk system does not need a view of the entire bar code of an item. The system’s proprietary image recognition technology, called ViPR, sees and identifies the item at the bottom of the basket. The UPC codes of the recognized items are sent to the POS and the item is added to the transaction. “The system needs to view just a small piece of the package—about 5% to 10%—to identify the item.”
The company also offers LaneHawk InCart, which recognizes items left in the basket of the shopping cart, and ShelfHawk, which provides store personnel with real-time alerts when it detects shelf-sweeps.
He says the ShelfHawk system can also alert stores when there are out-of-stock situations or issues with planogram compliance.“This provides a benefit beyond loss prevention,” he says.
The ViPR technology is also being used in the development of tunnel scanners, Hudnut notes, which can recognize the items as they go through a tunnel-like device instead of having to have the barcodes individually scanned.
Another company expanding its loss prevention technology into other areas is San Diego-based Carttronics LLC. The company is using the same technology in its Carttronics’ Cart Anti-Theft Protection System (CAPS) cart retention system for preventing carts from leaving the parking lot to prevent “push-out” thefts, where shoplifters roll a cart full of merchandise out the door without paying. Founder and CEO John French explains that Carttronics’ Push-Out-Prevention System (POPS) uses the company’s patented locking caster and networked radio frequency components to communicate to each cart to stop a shoplifter from leaving the store if he or she has not paid for the items.
The company also offers a bottom-of-the-basket monitoring system. Carttronics’ Bottom of the Basket System (BOBS) uses machine vision technology to ensure all items on the lower tray of shopping carts are seen rung up at the point-of-sale. Each point-of-sale equipped with BOBS includes a smart programmable camera, video touchscreen and wireless link to Carttronics’ server for image storage and compliance auditing, French says.
The company is also developing a system to monitor hand baskets to ensure that the items are paid for as the shoppers leave the store, according to French.
Since many of Carttronics’ applications are built on a network platform, it is easy to expand the use of the system without significant investment, French says. “The BOBS system, for example, requires the addition of cameras at the checkout stands, but overall there is minimal investment to add applications,” he says. “The system is remotely monitored, freeing up store staff, and can be used for asset management.”
Going forward, experts say grocers should be looking toward solutions that can maximize their merchandising space while making it easy for honest shoppers to purchase product. “The area of loss prevention is a constantly growing area with more innovative solutions coming out every day,” says Southern Imperial’s Northrup.