Visual Intelligence

Surveillance video can be used to improve chain-wide operations from a central location.

I recently heard a senior retail executive complain that when it comes to managing stores, he "can measure everything but can't see anything." Despite the fact that all of his stores have video cameras in place, he still spends a significant portion of his time traveling to different stores and assessing areas of underperformance.

As a security professional, I see this scenario time and again, particularly in the retail environment. Surveillance cameras are installed, but then the video is never harnessed for purposes beyond security and surveillance at the individual store. Of course, surveillance cameras are useful in catching shoplifters, keeping watch after hours or making sure that checkout lines don't get too long. However, placing cameras in strategic locations can allow them to serve multiple purposes, such as providing security and reducing loss at the local level, as well as generating key operational insights at the corporate level.

Going back to the concept of video analytics we introduced in our previous installment (in PG's March 2013 issue) — that IP-based video is data and can be gathered, stored and analyzed just like any other electronic information — there's a wealth of information hidden in stores' surveillance video that can be tremendously informative to senior management.

Most grocers already collect a lot of business intelligence from point-of-sale (POS) systems, time-and-attendance systems and even smart shelf sensors. However, all of this information, in aggregate, is unstructured data, meaning that it's not especially useful unless put into context. Video can provide that much-needed context, and solutions from business intelligence companies are giving grocers the ability to put everything together. The software links video from surveillance cameras to these other retail systems, and suddenly executives are able to get actionable insights into customers' shopping behaviors that they previously could have received only through on-site visits.

Customer Service

Most grocers, particularly those operating multiple stores, strive to provide customers with a consistent shopping experience. No matter which store a customer visits, the look, feel and service level should be the same as at any other location, and the shopping experience should always be positive. However, this is easier said than done.

Every grocery chain has some stores that perform better than others, even within the same geographic area. Even a single store can struggle with sharp differences in sales from day to day. However, management can often correct these inconsistencies quite easily if it has the right insights.

Retail software can harness IP surveillance video, match it with highs and lows in sales data, and queue up any POS exceptions — for example, unusual discounts, no sales and large refunds — for senior management's review. Now, instead of traveling from store to store, troubleshooting problem areas, managers can access reports and video online to see where stores are excelling and where they're struggling.

For example, an underperforming store might not have enough stock on its shelves, which discourages customers from browsing. Or there may be too many employees scheduled for breaks or non-customer-facing activities during the store's busiest times, frustrating shoppers who can't find help. Managers can even play back video of the POS exceptions to look for clues in customers' body language. For example, was a voided transaction due to a simple mistake, or did the customer become angry and storm out before paying for the merchandise?

No matter the cause, linking video to other store data helps management better analyze these situations, identify problems and opportunities, and then take action. Aggregating this information across stores can help create a set of best practices that makes the customer experience more consistent and positive across the grocery chain.

Food Safety

Just as with POS transactions, video from strategically placed IP surveillance cameras can capture all kinds of correct and incorrect procedures, which can then be used for instruction across the entire chain of stores.

Food safety, for example, is always a major concern, and grocers should consider having surveillance cameras in areas where food is prepared and handled. Senior managers can use video to "spot-check" work areas to ensure that every employee at every store follows the proper food safety procedures.

In case contamination does occur, video can aid in the investigation by helping to determine the severity of the problem, which employee — if any — is responsible and what action is needed. For example, finding that a store employee intentionally ground plastic wrap into packages of meat would require more severe action than the discovery that a new deli employee mistakenly returned day-old meat to the case.

Video can also help minimize food safety liability at the corporate level. Remember the Domino's Pizza incident from 2009, in which two North Carolina employees intentionally defiled food and posted a video online? If surveillance footage of the kitchen had been available, Domino's management could easily have verified whether contaminated items were actually thrown away or whether they were sold to unsuspecting customers. Surveillance cameras may even have kept the situation from happening in the first place. As it was, Domino's had no evidence either way and had to endure a highly public media fire-storm over the indiscretions of two employees.

Merchandising

As every grocer knows, properly merchandising a store can have a major impact on that location's profitability. However, making the best merchandising decisions has traditionally been more of an art than a science, requiring a good amount of trial and error to find the right mix for each store.

Thanks to IP surveillance cameras, it's now easier for senior managers to make strategic merchandising decisions. Just like weather maps show which parts of the country are hottest and coldest, heat-mapping technology can be combined with surveillance video to show which parts of a store are "hot" (attracting a lot of customer traffic) or "cold" (attracting little to no customer traffic). This helps managers analyze the flow of customers through a store and make decisions regarding layout, design and merchandising. Combining a heat map with POS data can also help determine why specific areas of the store are over- or underperforming. For example, an underperforming aisle might often become too congested, resulting in low sales because customers can't browse or access merchandise without a hassle. On the other hand, a "hot" zone could be the perfect place for a high-margin, best-selling product.

This same concept can be applied to promotional displays. Placing an IP surveillance camera above a display allows management to measure — and then replicate — what attracts customers and generates the most sales. This analysis can be useful in negotiating with consumer packaged goods companies, which pay a premium for the best store locations. The cameras can then be used to ensure that stores comply with product placements, which is an added value to CPG companies.

Business Strategy

While security and loss prevention are still the most common uses for IP video systems, retailers are now beginning to harness the technology as a business strategy tool. Linking IP surveillance video to other store data gives senior managers the insights they need to make more intelligent business decisions, and this dramatically improves efficiency and profitability across all stores.