SDM Magazine: In Retail & Elsewhere, Analytics Ease Shrinkage, Perk Up Profits
Video analytics gain momentum with compelling multi-department benefits for retailers, helping combat shrinkage while offering business insights.
The U.S. Commerce Department reported total retail sales in 2011 were $4.7 trillion, an 8 percent increase over 2010 total retail sales. The retail industry’s sheer size presents a big target for internal and external criminal activity, creating a major issue for retailers — to the tune of $119 billion in shrinkage in 2011, up 6.6 percent since 2010.
Research firm The Aberdeen Group just released a report, “The State of Loss Prevention in Retail: Controlling Losses and Maximizing Profits,” which emphasized the role of analytics as the source of intelligence necessary to protect profitability and combat shrinkage. According to the April 2012 report, “Retailers should begin to define loss as an inability to sustain profit. The only way to pinpoint where these losses reside, and which operations should be redefined, is through analytics.”
The report also states that retailers are learning “they need access to real-time data to stay one step ahead of recurring shrink. By using intelligent solutions to gain insight into loss … they can curb shrink and improve profit.”
Says Al Shipp, chief executive officer, 3VR, San Francisco, “Video is the largest unstructured data that any enterprise has to deal with — in retail or any other vertical. Until today it has been a huge cost shouldered by the security department because you would have to store it and management couldn’t use it. But now we are seeing the shift in getting better information from video and helping industries receive and act on powerful information from video through analytics. Retailers were among the first in to figure out that information coming from the video system could create real business value. In addition to loss prevention, video analytics can help optimize staffing; evaluate promotion and marketing performance; collect real-time shopper data; reduce fraud; and deliver a lower total cost of ownership.”
Excerpt reprinted with permission from SDM, a BNP Media publication. Copyright 2012.