by Adrian Beck
It is hard to overestimate the extent to which video technologies are now becoming embedded in societies around the world in general and within retail in particular. Indeed, estimates suggest that global retailing could be spending as much as $2.2 billion on video technologies by 2023. In many respects, this is not surprising – its use is not only longstanding, but also increasingly ubiquitous – it is hard these days to find a segment of retail space that is not under the gaze of some form of video system. Indeed, retailing has been at the forefront of the use of what are often called Closed Circuit Television (CCTV) systems since the 1970s and 1980s. Primarily deployed as a crime prevention and detection tool, and initially based upon analogue technologies, it is now going through a period of considerable and remarkable change, driven by a rapidly changing technological and social context.
This has led to the potential role and capability of video technologies in retailing beginning to expand beyond its traditional role as merely a facilitator of safety and security to one covering a much wider range of retail activities, including managing the retail environment and playing a role in enhancing business profitability. Moreover, the recent rapid growth in the development of video systems that can potentially provide an ‘analytic’ capability – in effect building some form of automation into the viewing, reviewing and responding process, has further heightened interest in utilising these systems more broadly across retail environments. Indeed, talk of video-based Artificial Intelligence (AI) and Machine Learning (ML) technologies being the next ‘big’ transformative change in retailing is currently dominating many trade shows and future gazing deliberations.
However, whether their introduction and use currently makes sense or are indeed the most appropriate interventions to address the pressing and varied concerns of retailing, is certainly open to debate and critical review. Indeed, there is a general paucity of available information on the overall role video technologies might play in supporting the endeavours of the retail industry. Given this, the ECR Retail Loss Group commissioned research to look carefully at: how current and future video systems can/might contribute to the retail environment; the benefits they can bring; the lessons that can be learnt from those currently using them; and the ways in which this investment can be maximised to have the greatest effect.
The study draws upon in-depth interviews with representatives from 22 retailers based in the US and Europe, with collective sales of nearly €1 trillion, equivalent to approximately 12% of their retail market, and operating in over 57,000 retail outlets. In addition, interviews were carried out with representatives from five major video technology providers.
Given that retailers have been using various types of video technologies for the best part of 45 years, it may seem odd to spend research time asking the deceptively simple question: to what purpose do retailers use them? However, evidence of ubiquity does not always translate into uniformity of purpose nor understanding of rationale. As summarised in Figure 1, the study found that retail use of video technologies could be grouped in to eight use cases.
The most common use cases were focussed upon passive forms of utilisation – delivering deterrence, providing reassurance and ensuring that users were in compliance with specific legal requirements. Since, its early incarnations, video systems have been employed to try and deter would-be miscreants – make them think that there is an elevated risk that they will be caught either in the act, or subsequently due to their images being recorded and reviewed. What the research found is that this generalised ‘deterrent’ capability is thought to have a fading impact, mainly due to familiarity and ubiquity, and has been superseded by attempts to make the deterrent effect more personalised. This was found in the increasing use of Body Worn Cameras, Face Boxing technologies on Public Display Monitors and the use of Personalised Displays at Fixed Self-checkout machines.
There was relatively little evidence of retailers using their systems to any great extent for real time monitoring – the costs of employing staff to do this was not regarded as a good Return on Investment in most day-to-day situations. There was significant use of systems in Reactive mode, principally to undertake reviews driven by other exception reporting systems and explicitly reported events such as slips and falls by staff and customers. Using video systems to generate a response was found in some retailers where there was an elevated risk of violence occurring – video operators being alerted to live events and having the capacity to intervene in various ways, such as audio warning.
Overall, the research found a complex web of use cases, some of which were clearly covered in the original plans for the video system, while others had developed more organically as various retail concerns and problems emerged. As will be discussed later, the lack of an overarching and clearly articulated plan for the use of video in retail businesses can lead to significant problems when it comes to ensuring that the system is well designed and fit for purpose.
As a term, ‘video analytics’ has become the next ‘big’ thing to supposedly transform the retail landscape. Hearing promises that AI and ML will revolutionise the industry are not hard to find although pinning down how this will materialise remains more challenging. All the respondents to this research had had some form of experience of utilising various types of video analytic, most with varying degrees of success. As one respondent put it: ‘The thing with video analytics is that there have been claims, promises, suggestions for years and years that it can do all kinds of things and inevitably with lots of it, it ends up being Emperor’s new clothes’. However, there was also a growing sense that the capability was beginning to improve: ‘We are right at the cusp of discovering just what can we do with these systems; there are a lot of technologies that are emerging to the point where they can begin to scale’.
The most commonly used security and safety-based video analytics were motion-based triggers, particularly alerting when intruders entered prohibited spaces or high-risk products were moved. In addition, there was considerable use and experimentation around the use of analytics to help manage the growing problem of self-scan related losses, such as non-scanning and mis-scanning. While some respondents to the research had tried facial/feature recognition technologies, and were generally excited by what they might be able to deliver, all were deeply concerned about the potential public relations car crash that was likely should they declare active use. In addition, there were on-going concerns about how it would be operationalised, particularly when many retailers were trying to reduce the number of circumstances when store staff were brought into potential conflict situations.
There was also evidence of using video analytics to generate business intelligence, with good examples being shared of ways in which customer service could be improved, and of course as the COVID-19 pandemic has swept across the retail landscape, monitoring and counting customers.
But, it is also a technology that presents many challenges and the research documents the various hurdles retailers face in trying to get video analytics to work well. Of concern is ensuring that video analytics do not generate too many False Positives and what the study called Overload Positives, where a poorly designed analytic generates a flood of data, creating a real risk of alarm fatigue. Respondents also flagged up issues about the challenges of scalability – the criticality of context-specific factors being considered when systems are being installed in any given location.
In addition, the research found that the efficacy of most video analytical systems is compromised by two other factors – the clarity with which the objective of the analytic can be defined and the degree of retail complexity within which it will be asked to operate. As the retail environment becomes more complex and demanding, and the link between a stated objective and an outcome trigger becomes blurrier and more ill-defined, then the likelihood of False and Overload Positives becomes more of a reality (Figure 2).
For example, the objective of identifying shop thieves in certain retail environments from their behaviour is complex and difficult – many of the ways in which they act increasingly mirror the activities of normal shoppers. In addition, the growing use of different types of self-scan systems and the encouragement of shoppers to bring their own shopping bags makes the identification of errant behaviour extremely challenging. Designing a reliable video analytic that will generate a high proportion of True Positives in this type of scenario seems at best optimistic. More positively, where the link between objective and trigger can be more clearly identified and the context simplified, then the prospects are more promising. For instance, identifying when a person enters an unauthorised space that is currently not in use is a relatively easy situation for an analytic to be successfully deployed.
Unless these three factors of scalability, complexity and clarity are not carefully managed and monitored, then there is a real danger that many video analytics could become mired in the Crying Wolf Syndrome – subject to retail ridicule, labelled a costly distraction and generating mountains of unusable data. It is therefore important that developers of these technologies move cautiously, responsibly and realistically.
Strategic Trends in the Use of Video Technologies in Retailing
The study also identified a series of strategic trends in the way in which retailers are using video technologies.
For the most part, this research found a general lack of a co-ordinated and cross-organisational approach to the strategic use of video technologies in retail companies. While the Loss Prevention function was typically the titular head, this was often more a consequence of historical legacy rather than a considered corporate mandate. As such, establishing why and how video technologies should be employed across a retail business to facilitate the meeting of key company goals is not easy. Too often, video investments are unnecessarily uni-dimensional, their potential poorly communicated, and insufficient attention given to maximising the value that could be derived from a more coherent integration strategy. This inevitably leads to technological overlap, redundancy and under performance.
It seems clear, therefore, that retail organisations should actively anoint a ‘video technology tsar’ to positively and proactively lead on the current and future use of these systems. Their role would involve at least five interrelated activities. First, develop a clear and co-ordinated strategy for a pan-organisational utilisation of video technologies. Secondly, ensure that the business speaks with ‘one voice’ to avoid duplication of effort and investment. Thirdly, ensure that all parts of the business not only understand the potential of what video systems may offer, but also actively facilitate their access to them. Fourthly, establish clear parameters and methodologies for how the value of investing in video technologies can be measured and understood. Finally, take full accountability for maximising the ROI for any and all video technologies procured by the business.
While the Loss Prevention function will no doubt remain the dominant user of video systems within a retail business for the foreseeable future, it does not necessarily follow that they must take on this role. The move towards greater use of IP-based video systems and the value and importance of system integration, may mean that the IT function increasingly takes a much more involved role and could therefore take on this leadership responsibility. They may well adopt a more dispassionate approach to what it could be used for and who owns it, as well as ensure greater connectivity. No doubt organisational culture, localised specialisms and historical responsibilities will all need to be considered when making this decision, but the key is that the role of Video Tsar is established, recognised and empowered.
A key development that became apparent as this research progressed was not only the growing use of centralised video monitoring stations, but also the increasing breadth of the activities being undertaken by these facilities. In and of themselves, centralised monitoring stations are not necessarily a new development – distributed fire and burglar alarm systems in retail buildings have been brought into Alarm Response Centres (ARCs), often provided by third party companies, for many years. In addition, some larger retailers have operated full time security centres where they monitor and respond to incidents occurring across their estates. However, the growing availability and use of networked video systems has encouraged more retailers to begin to establish video-based centralised command centres within their own businesses.
While video technologies have been, and largely continue to be, focussed primarily on issues relating to safety and security, and this is unlikely to change much in the foreseeable future, what is likely is that the overall use of video technologies will grow. This will be influenced by three factors. First, the retail context is likely to encourage more utilisation and not less. Pressures brought about by growing competition, rising costs (particularly labour) and shrinking margins will see retailers looking to a range of technologies to meet these challenges.
Secondly, the applicability of video technologies will further grow. This can be seen in the way in which retail developments such as self-scan technologies have created a new set of risk challenges that may be ameliorated by the application of video technologies and analytics. Finally, the growing capability of video technologies will mean that they can begin to be utilised in ways that were not previously considered possible or appropriate. For instance, the growing networkification and centralisation of retail video systems is enabling innovation in the way in which the problems of burglary and violence may be addressed.
Video systems are increasingly being viewed as one of several data sources that retailers can access and analyse to improve their operations and business profitability. As such, the value of integrating video data with other data feeds to improve value was a readily apparent trend in those taking part in this research. For some this was part of the growth of the Internet of Things (IoT) and the value that can be had from enabling various objects to communicate, including video technologies. For others it was the way in which better decisions could be made when multiple data sources could be accessed, combined and analysed. Certainly, when it comes to the growing utilisation of video analytics, especially in complex environments where the likelihood of Overload Positives is high, or the risk of a False Positive is unacceptable, then combining video data with other data sources would seem a useful strategy. A key trend, therefore, will be technology providers working with their retail partners to ensure that, wherever possible, video data is fully integrated into the broader organisational information web to maximise impact and value.
While the presence of video systems in retailing is now almost ubiquitous, it is a technology that can be difficult to justify purely in terms of a definitively identifiable ROI. Part of the challenge is the intangibility of some of the desired outcomes of using these systems, such as customer and staff reassurance and the deterrence of crime. It can be hard to put a concrete monetary ‘value’ on what these are worth, and in some respects, it may not be desirable to try. However, this research has singularly struggled to identify many retail companies that have developed a systematic approach to capturing the various ways in which their investments in video systems have secured value. Too often, the approach is piecemeal, partial and incomplete, driven in part by a lack of strategic oversight as detailed earlier, but also by the disparate ownership of various systems with a retail business.
In addition, it is driven by a lack of a coherent understanding of the overall purpose of any given investment in video technologies. When the use case is wrapped in blurry and imprecise expectations, such as reducing crime and detecting persistent offenders, then it should come as no surprise that the key performance indicators (KPIs) are equally fuzzy and unclear. More encouragingly, it is possible to identify a range of KPIs that can be measured to begin to assess the overall contribution of various video systems, but without a clear cross-functional plan to consolidate the various ways in which video generates value to an organisation, the route to making a persuasive business case for future investment will continue to be challenging, undermining opportunities for further utilisation, innovation and integration.
A final key trend that emerged from this research was a growing realisation that unless the retail business fully understands how it wants to benefit from an investment in video technologies, then system designs will continue to be ad hoc and poorly configured.
In many respects, this is linked to the need for somebody to take overall cross-organizational ownership of the video strategy – be a Video Tsar – to ensure that desired outcomes are matched against system requirements. This was evident from some of the responses to this research: ‘If you don’t know what you want the system to deliver, how can you design a system in the first place?’. Others lamented the outcome of not adopting a systematic approach to the procurement and use of video systems: ‘… our store ceilings look like a showroom for video cameras – so many different unconnected systems; just looks a mess’.
Part of this process is not only understanding what the technology can deliver now and to a degree in the future, but also engaging in an educational/listening/training exercise with the rest of the business. Does the rest of the organisation understand the potential of what video technologies might deliver, and what are the future priorities of various retail functions? While future proofing is never an easy task, developing a clear and considered organisational strategy for how video technologies may be used to benefit the profitability and productivity of a business will be a key first step in ensuring that any proposed video system design is fit for purpose.
Retailing is a constantly evolving and dynamic industry, hard wired into the economies of most countries. It is also an increasingly competitive and complex environment, demanding businesses to not only be agile and responsive to the needs of their customers, but also make use of a growing array of technologies. While video systems have been used by retailers for many years, primarily to deliver security and safety, this new ECR research provides a stimulus to think more creatively now, and in the future, about how its role can be further developed to enable retailers to meet their core goals of satisfying customers and returning a profit.