29 Jan Using video solutions for expansion
Store owners are using video to do more than just cut losses, thanks to a new generation of AI-powered and end-to-end solutions writes Dennis Choi, General Manager, IDIS Middle East & Africa.
For store owners, reducing shrinkage always comes at a cost – but where video systems are concerned, today we are seeing those costs becoming much less of a burden, and the decision to invest becoming easier.
This is not because up-front video equipment is becoming cheaper. It’s because today’s solutions demonstrate clearly better value over longer lifetimes, with superior performance, maintenance and usability.
And more importantly, video is no longer designed just to reduce losses and instead has become a tool that supports active business growth. This makes it a much more appealing, and exciting, proposition and retailers understand that.
In a growing number of projects across the region, we are seeing store owners using video to support their growth plans – opening new outlets, and managing operations more effectively to increase both sales and profits.
Two developments are key to this. More effective remote monitoring and the integration of video analytics with ERP software are allowing owners to analyse, understand, and improve the performance of local managers and staff, refine their operations, and push up the profitability of every store.
Less bad news
In the past, the business case for retail video solutions had to be based largely on how well and how quickly they would reduce losses. Faced with the need to install a new system or upgrade an old one, retailers could only ask how quickly it would ‘pay for itself’ by cutting shrink. In this world, the only good news that businesses could hope for was that there would be less bad news.
While there were other benefits too — including reducing the store’s exposure to bogus accident insurance claims, and deterring violence and aggression against staff – these were still focused on reducing risks and solving problems that retailers would rather not have. This put video firmly in the category of a grudge purchase.
Video integration with ERP
But today, a growing range of benefits has been added, thanks to the emergence of analytics, and easier integration with retailers’ ERP software — those systems that underpin the management of key aspects of the business, both front-end and back-office processes, including inventory management, purchasing and supplier management, POS, payments, and order processing.
Up until recently, integrating video in this way was difficult and therefore expensive. This was because retailers needed separate software solutions, from different vendors, to operate their video, for video analytics (people counting, queue monitoring etc.), for ERP software and the integration itself. This often involved up to four separate suppliers, made deployment complicated, and virtually guaranteed compatibility issues.
Now, off-the-shelf, all-in-one solutions remove the need for multiple vendors. Instead, retailers can have a video system with all the key analytics they need, that links seamlessly with their ERP software. Reducing the number of suppliers involved helps strip out costs and removes complexity.
Thanks to technological advances, seamless integration, and more attractive options for deployment, retailers are discovering the advantages of streamlined all-in-one video solutions that deliver multiple positive benefits. They allow video data to be analysed alongside data from other core business systems, to support growth, not just to reduce risks and prevent losses.
Five Steps to Cutting losses and building retail profits with AI video
Understand which AI video features will contribute to profitability
Automated people counting and heat mapping can now be handled by proven AI video analytics, replacing manual collection and analysis of data. Inevitably, AI does this job more accurately and at a lower cost. Solutions with at-a-glance dashboards make it easy to unlock new value from metrics such as the sales performance of each store, measured against peaks and troughs of customer flow. Metrics from people counting, transmitted via VMS, and collected in a server for sharing with a retail ERP solution, will allow easy analysis of sales turnover and visitor numbers by day, month and week.
This makes it possible to drill down into the factors that typically affect profitability, such as comparative store performance, the effectiveness of marketing campaigns, product management, and staff efficiency. Armed with this better understanding, businesses can focus management attention on areas of the operation that need improvement including staffing levels, staff training, store location, merchandising activity including promotional testing, stock handling, customer service etc.
Manage workloads by balancing centralised control with branch-level autonomy
There are advantages to sharing responsibility between the central office and local branch managers; for example, some tasks are better handled at the branch level, including on-the-spot incident investigations and cooperation with local law enforcement agencies. Systems can be designed so that footage is recorded locally while the overall system is controlled and managed centrally, using enterprise-level VMS.
This allows day-to-day security functions to be delegated to local teams, while senior managers have overall control and can use AI analytics to review trends and activity across the whole business. And even though some security functions and day-to-day store operations may be delegated, the head office still has full oversight. To allow easy transaction auditing by senior loss prevention managers or business owners for example, an HDMI Encoder can enable video and POS integration, with cash register transactions being overlaid on video footage and time synched with all recorded video data.
Ask for a proof of concept demonstration
A POC demonstration is often the best way of assessing how much value a system upgrade will deliver; it can reveal unexpected benefits too. For example, a POC trial can not only demonstrate the impressive image quality and blind spot-free coverage that’s now possible with the latest 5MP and 12MP cameras (bullets, domes, fisheyes, multi-imagers, etc.), but it will also show the expanded capabilities of the VMS.
It’s not unusual for an ageing and underperforming system to be given impressive new life simply by migrating it to the latest VMS – an easy upgrade that not only retains existing devices but unlocks the latest AI functionality, and also makes future phased upscaling with new cameras easily manageable.
Target AI capability to exactly where you need it
AI analytics can be added to your system in a targeted, affordable way by choosing from the range of flexible options now available, including Edge AI cameras, add-on AI Box devices, and enterprise VMS with full AI functionality. Cost and complexity are not barriers to the adoption of AI analytics.
Develop a standardised system design across multiple stores
Adopting the same configuration across multiple stores is an approach that ties in well with the business model of most retail chains. This is based on scaling up operations by replicating successful templates, expanding reach by repeating a successful formula and keeping operations manageable as they grow. We are seeing many projects now that exemplify this thinking and demonstrate that significant savings can be delivered and replicated across multiple outlets, particularly where those outlets share a common layout.
The profile of businesses taking this approach varies considerably, ranging from independent stores and local outlets up to international brands with hundreds of stores. The size of the outlets varies too, from 50 to 100sqm, up to multi-floor department stores. In each case, store owners discover that, in the video data that their systems capture, they own a valuable resource.