In today’s pressurised retail environment, where businesses are obsessed with achieving the edge in terms of price competitiveness and customer retention, there is also another major cause for concern – security.
Particularly, considering current pervasive crime rates, issues such as shopping mall armed robberies, burglaries, physical attacks on retail employees or incidences of verbal abuse, fraud and shoplifting are all hot topics on the retail security and loss prevention manager's agenda.
"These security-related concerns are accompanied by the pressing need to justify and demonstrate the effectiveness of each retail security management programme," Brett Birch, Africa sales leader for GE Industrial, Security.
"Retailers listed on the stock market have to increase profitability, while continuously decreasing prices for consumers. They achieve this through raising operational efficiencies and only spending on items providing measurable benefit," he explains.
According to Birch, budgetary constraints also apply to security spending in the retail sector - far more than in the banking or other vertical sectors of the market.
"In 2002, retailers in the US lost 1,7% of their annual total sales to shrinkage - in financial terms this was a $31,3 billion loss. European retailers in 2004 lost in excess of 1,4% of their total sales to shrinkage, which amounted to 30,7 billion euro," he points out.
The breakdown of these losses is as follows:
US
* 48% due to theft by employees (total of $15 billion).
* 32% due to shoplifting.
* 15% due to administrative/paper error.
* 5% due to vendor fraud.
Europe
* 29% due to theft by employees.
* 48% due to shoplifting.
* 16% due to administrative/paper error.
* 7% due to vendor fraud.
According to Birch, the percentage usage of various loss preventative systems in the US is as follows:
* 94,4% - burglar alarms.
* 73,3% - live, visible CCTV.
* 50,8% - live, hidden CCTV.
* 50,8% - digital video recording system.
* 49,2% - Point of Sale (PoS) data mining software.
* 29,7% - simulated, visible CCTV.
* 17,8% - POS exception-based CCTV interface.
For 'hot' loss prevention systems from 2002-2003, usage was expected to rise by 39% for digital video recording systems. A 26% increase was expected for POS exception-based CCTV interface usage; and a 22% increase in usage for POS data mining software.
According to Birch, typically, the main objectives for the retail security and loss prevention manager include the following:
* Increase the return on investment (ROI) of the video surveillance system.
* Stop false alarms.
* Reduce employee theft and improve the overall store efficiency 24/7.
* Cut costs.
"A full video surveillance system in a large supermarket can cost anything between 1 and 2 million rand and security managers are finding it difficult to justify this expenditure to management, despite the high losses due to shrinkage. The main reason for this is that the amounts being recuperated are marginal compared to the actual shrinkage losses. This is as a result of numerous issues, such as the lack of reporting of losses to the police; and the fact that the majority of complaints reported do not lead to prosecution, due to police inefficiencies or the lack of usable evidence.
So, although no one is challenging the fact that video surveillance is a deterrent, there is a growing concern among retail security managers that they are not getting the full potential out of their investment in video surveillance.
"While there is of course no 'magic solution' to improving the ROI of video surveillance systems, we can propose a series of enhancements that would all contribute to creating more usable pictures," Birch maintains.
These are the following:
* Better picture quality.
* Relevance of recorded images.
* Easy sharing of these images locally or remotely.
* Using video surveillance for non-security related benefits.
Picture quality - No matter how innovating the video recording system is, to be really effective you must start with a clear picture! This is done by improving:
* Light conditions.
* Location of the camera.
* Quality of the camera.
Relevance of the footage - Reviewing tapes or digital recordings and searching for a specific event can be time consuming. Some events are difficult or impossible to trace when they appear no different to the normal conditions.
*Sharing of images - Easily share pictures with the local Police.
Easily access pictures remotely - IP gives you access to live or recorded video anywhere; and allows you to use the existing network infrastructure.
Not just for security - other added benefits for the business such as:
* Disprove public liability lawsuits.
* Monitor flow of customer traffic.
* Help with design of store layout and product placement.
* Monitor the length of queues at checkouts.
"Another advantage of using video surveillance monitoring systems is that it allows for prevention and not just reaction," Birch points out.
"Most of the time, offenders are the same individuals, identified and known by the police. Adequate and efficient video surveillance would make it possible to take a preventative, proactive stance against retail crime by making it possible to alert retail staff as these individuals enter the retail environment; before the offence is even committed," he concludes.
For more information contact Brett Birch, GE Industrial, Security, 021 937 6000, brett.birch@ge.com
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