The Intelligent Store. Now.

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Leveraging Video Analytics to Boost Total In-Store Performance

Retail Store Optimization

The Intelligent Store. Now.

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R etail organizations have been us-ing video surveillance as a valuable

tool to combat shrinkage, which can account for more than 1.6% of retail sales for some U.S. organizations, according to the Global Retail Theft Barometer. Shrink rates, up 6.6% in 2011, are the result of increased shoplifting, employee fraud and or-ganized retail crime, reaching $119 billion worldwide. In 2011, retailers spent $128 billion for retail crime and loss prevention (LP), which amounts to about $200 per family. Additionally, 58.4% of North American retailers re-port increased losses from organized retail crime.

Nevertheless, there is a light at the end of the theft tunnel. Skimming,

employee theft and identity theft are continuing threat vectors that can be minimized using sophisticated video analytics and IP camera technology. But video not only helps avoid busi-ness losses, it is also a key compo-nent of business growth.

“In order to remain competitive with a growing variety of shopping alterna-tives, retailers must seek new ways to deliver the most value, revenue and loyalty,” said Brendan O’Meara, Managing Director of the Worldwide Retail Sector at Microsoft Corp. “To do so, they must harness the increasing volume and availability of data using technology to process large amounts of data into meaningful reports and insights as quickly as possible.”

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Video is now moving from its LP core competency to real-time analytics — business intelligence that provides

“see-it-in-action” information that’s invaluable for marketing and merchan-dising professionals. 3VR, which pro-vides the Video Intelligence Platform, offers five ways to use video to en-hance total in-store performance:

1 Study real customers with real products in real time

Can retailers really optimize market-ing placements and determine that they made the best decisions? What changes would be made if a retailer could review customer behavior around special-offer products, such as whether they compared that item to another brand, picked up the item, or bought more than one product? Can any trend be identified based on cus-tomer behavior?

According to Mark Rose, SVP of Sales for BrightTag, retail analytics let organizations track each con-sumer’s unique browsing and buying behavior, giving a better picture of shoppers who are more ready and likely to buy. “Along with receiving insights on channels being used to browse and buy, retailers can use an-alytics to track behavior and engage-ment…which adds greater depth to customer profiles.”

Video analytics, and plug-ins that identify demographic information, allow retailers to monitor customer behavior with products. The data collected becomes important when considering promotions and in-store displays. The ideal approach is to use a video platform with sophisticated features that allow these capabili-ties minus countless hours of review, video search and more. Today’s intelli-gent video platforms make it efficient and easy.

“Along with receiving insights on channels being used to browse and buy, retailers can use analytics to track behavior and engagement…which adds greater depth to customer profiles.”

— Mark Rose, SVP of Sales for BrightTag

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2 Measure impressions for in-store promotions

Facebook and Google measure the effectiveness of social media with impressions. With quantitative and vi-sual findings, video adds visual confir-mation and application for retailing ad-vertising and promotional campaigns. Using retail analytics that measure customer traffic and dwell time, re-tailers can track the increase in store traffic due to an advertising campaign. Additionally, video can be used to measure how long a customer stands in front of a promotional display or end-cap, thus calculating impressions. These analytics can provide reports with data that can be correlated with point-of-sale (POS) information.

3 Optimize staffing by seeing customers

Retailers continue to be frugal through challenging economic times. One of the highest costs for retailers is people — those who must provide top-quality customer service and increase sales. The challenge is optimizing employee and store-level resource allocation. It’s a relentless balancing act to know how many associates should and shouldn’t be in a store per hour, per shift, and per

day. Retailers need advanced tools to best analyze their stores for overstaff-ing and understaffing. One answer: counting customer traffic using video.

On-demand, real-time video delivers a clear, substantiated picture of what’s happening in a specific store. Video, provided through existing cameras from the ceiling and at the point of sale, shows you the exact traffic numbers, monitors queue lines, and sends alerts to store managers if prescribed lengths are exceeded. Based on accurate, real-time data, the manager can assign the appropriate number of staff per shop-per. By having accurate counting data along with POS data, video end-users can calculate and measure the impact of a local promotional campaign.

By combining the uses of analytics and business intelligence tools, line managers are equipped with the tools they need to improve daily decisions about staffing, pricing, promotions, replenishment and seasonal buys.

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4 Reduce fraud with alerts and exception-based reporting

Loss prevention professionals are con-tinually investigating potential fraud vs. errors from sales associates, vendors and others. The process may take months and can be lengthy and ex-pensive. An intelligent video platform expedites the investigative process and offers “alerts” when “funny busi-ness” is identified. Ultimately, video adds accuracy and timeliness to loss prevention efforts.

An intelligent video platform should provide two primary types of real-time, exception-based reporting:

• Alerts: Alert a team regarding spe-cific types of POS transactions where fraud and theft are key prob-lems. Alerts can be configured when certain transactions occur, or if sales transactions are not corre-sponding to programmed variables. These alerts are sent to the LP team, which can view and review behavior at a specific checkout line.

• System health monitoring: Setting up an alert that shares malfunc-tion severities (low, medium and high), and what is and is not work-ing, such as cameras or failing hard drives, helps a retailer avoid a major disruption. Imagine the dollar loss of a power surge that takes down the POS system and requires the store to close, then what?

The Intelligent Store. Now.

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5 Justify cost, lower total cost of ownership.

Visual LP and merchandising is excit-ing and retail-worthy, but no retailer selects technology without cost analy-sis. This requires a review of overall surveillance system costs such as ini-tial purchase, physical administration, operations, staffing, bandwidth, stor-age, and hardware/software upgrades. Additional costs can turn into a major loss if systems, drives or point-of-sale systems shut down.

Video surveillance systems and IP cameras have brought security into a much-needed digital age. The prolifera-tion of video has also resulted in orga-nizations adding video management systems to manage video. However, when companies want to use video analytics for real-time business intel-ligence, they have to add hardware or pay for additional licenses. With the 3VR platform, costs are reduced through its platform approach deliv-ered on standalone video manage-ment software or on a hybrid appli-ance. Retail organizations benefit from the video analytics, data integration and enterprise search, reporting and management features that 3VR offers with its comprehensive platform.

The ultimate question is, “What is the total cost of ownership?” A comparison between current systems vs. the 3VR platform shows a retailer advantage.

The 3VR Video Intelligence Platform allows a retail Loss Prevention team to manage thousands of locations, and solve and protect their organiza-tions against shrinkage, skimming and employee theft. The 3VR platform can grow with a customer, providing better return on investment with the ability to add video analytics to that same platform and run enterprise reports. Current systems cost more for less and rarely have any analytic capabilities beyond loss prevention. 3VR delivers an innovation that solves retailers’ problem of tight budgets while advancing LP and visual busi-ness intelligence, all at a lower total cost of ownership.

The Intelligent Store. Now.

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Visual Retailing Works

Video, offering visually accessible store-level performance, makes mar-keting and merchandising more effec-tive and quantitative. It’s a win-win: retailers gain the ability to leverage existing systems and already allocated costs to triple the value of the video technology. It’s a triple play — video for loss prevention, video for market-ing, and video for merchandising — which positively impacts customer services and sales.

This whitepaper has delivered 5 key benefits of using video to improve business processes, in addition to enhancing loss prevention:

1. Evaluating promotion and mar-keting performance

2. Collecting real-time shopper data 3. Optimizing staffing

4. Reducing fraud

5. Delivering a lower total cost of ownership

Video offers potential for retail business growth. Data matters. Video is a must-have for retailers seeking to quantify their marketing and merchandising decisions.

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3VR VisionPoint Analytics for Retail3VR uses the power of Video Intelligence to allow retailers to optimize operations by responding quickly to customer needs and market trends. Using our best-in-class Vid-eo Intelligence Platform, 3VR VisionPoint Analytics for Retail offers an end-to-end retail optimization solution. Through a cus-tomizable dashboard, merchants can gain a 360-degree view of customers across shopping channels and adjust goals to maximize overall business performance. Based on real-time intelligence fitted to their organizations, decision makers can

quickly find answers to questions around comp-store sales, SKU profitability, queue efficiency, store layout and more, and then take the appropriate action to boost profits. Combined with award-winning loss prevention features, the 3VR solution converts each brick-and-mortar location into The Intelligent Store. Now.

Learn More

Contact 3VR at 877-387-6061 or info@3VR.com to learn how you can optimize operations and boost shopper satisfaction by creating The Intelligent Store. Now.

3VR Inc., 475 Brannan Street, Suite 430, San Francisco, CA 94107Telephone: 877.387.6061 | Website: www.3vr.com/retail

What is Video Intelligence?

Video Intelligence is a technology that mines video streams for ac-tionable data without the need for users to watch the video. 3VR’s Video Intelligence Platform combines video analytics, context integration and social intelligence to deliver the vital information needed to construct successful in-store displays, product place-ment, promotional offers and queue management strategies. The three pillars of our platform combine to provide a complete solution that will move merchants toward operating The Intelligent Store. Now.

Video AnalyticsA set of tools and algorithms that analyzes video feeds and extracts important information. 3VR analytics include a whole range of plug-ins that detect colors, faces, shapes, motion and direction, demographics, mood, behavior, and more.

Context IntegrationEnhances the video data by putting it in context with data from other sources such as POS, inventory, ERP or RFID tags, to provide a richer and more relevant picture of the retail environment.

Social IntelligenceAllows store, operations, merchandising and marketing managers to share their findings across a specialized social network for optimal trend analysis and promotional impact.

Video Intelligence