Table of Contents
Table of Contents
Brick-and-mortar retail shops are facing a lot of challenges. From organized retail theft to tighter margins due to inflation, it’s harder than ever to drive profit. Retail video analytics is a way to get new value out of existing CCTV systems. These new insights can help you increase conversion rates through better merchandising and optimized store layouts as well as end discount abuse and return fraud to keep your hard-earned money in the till.
What is video analytics for retail stores?
Analytics refers to the systematic collection, analysis, and interpretation of data. Video analytics is simply an extension of this. That is, it’s the use of video footage, whether in real time or using video retention, in these same processes. Unfortunately, most businesses ignore video data as part of their operational analyses.
Indeed, while academics have focused on video being the biggest source of data, businesses have been slow to adapt to this reality. That’s due to two primary reasons:
- Companies have accepted that security cameras are a “cost center” not “profit driver” for too long and therefore don’t look for new value from their old CCTV infrastructure.
- Video data requires new systems for interpretation and analysis, which means you need to onboard new tools to reap the benefits of this data source.
However, when companies get over this mindset, they find a highly valuable data source that can turn their loss prevention system into a revenue generator.
20 things retail video analytics can do for your business
Retail video analytics provides new value from existing CCTV systems. This value spreads across loss prevention and security, marketing, business insights, health and safety, and customer service.
While the use cases are endless, here are 20 things retail video analytics can do for your retail stores today:
- Count footfalls for true conversion rates
- Optimize staffing through real-time metrics analysis
- Improve loss prevention by pairing video footage with POS transaction data
- Confirm stores are opening on time and not closing early
- Reduce false alarm fines with video verification
- Uncover discount abuse
- Prevent return fraud
- Automate stock level monitoring
- Improve inventory management with Motion Search
- Increase productivity and eliminate time theft
- Utilize heatmaps for better merchandising and store design
- Monitor queue lengths to improve customer service
- Confirm in-store marketing campaigns are implemented
- Analyze customer paths and dwell times
- Optimize lighting and energy use
- Detect and respond to emergencies quickly
- Monitor supplier deliveries and logistics
- Validate cleaning schedules and quality
- Facilitate remote store management
- Reduce health and safety fines with Blocked Exit Detection
Count footfalls for true conversion rates
Footfalls, or people counting, give retailers an idea of how many people are entering and exiting their store, and therefore also the average dwell time. These numbers have long been available to ecommerce businesses, but for brick-and-mortar retail, they are hard to come by and often require expensive and intrusive hardware, such as turnstiles, which disrupt the flow of patrons and can hurt the aesthetics of the business.
This leads many businesses to measure other types of conversion rates. For example, they may choose to look at what percentage of sales are for multiple items, as an indication of upselling and cross-selling efforts.
AI cameras solve this problem by recording the number of people crossing a “virtual tripwire” in their field of view. This gives businesses real insight into their conversion rates so they can test new merchandising, marketing, and sales tactics and then review the results. These data-based decisions can lead to much higher revenue numbers.
"Solink crushes it with data analytics and business intelligence. With your conversion data, I can start to look at why someone didn’t buy anything. Whether the item isn't in stock, we don’t carry it, they couldn’t find it, or no staff member engaged with them. With conversion data, we’ve pushed our inventory up from 34,000 SKUs to 48,000 SKUs. We're adding a lot of variety here because it looks like that is what people want and need. We're trying to do a better job of teaching our team to find every item and help people do the same. I want our security cameras to be able to prove that story, or disprove it. Real conversion rates allow me to evaluate these strategies. Going forward, tracking actual conversions is really important for all physical retailers."
Optimize staffing through real-time metrics analysis
Many staffing issues that arise during a work day are traditionally addressed by new decisions in the following week’s schedule. If Saturdays are trending upwards, then more hours can be added to the schedule for the following Saturday.
Other issues are addressable when the issue is discovered through better labor deployment. For example, when the cash register has a long queue, someone stocking shelves might be asked to open another till.
The faster these issues are addressed, the better the customer experience will be—and it can even lead to more sales. Having a retail push notifications system that can alert you to a higher number of transactions per hour than usual means you can open a second till earlier. Customers who are waiting in line are less likely to get frustrated and give up on their purchase if they see swift action to address delays.
Furthermore, adding a video analytics aspect can help you handle the underlying causes of these delays. For example, the cashier may need further training to handle a high volume of transactions, or a piece of equipment might not be operating correctly slowing down the time it takes to ring in a purchase.
Improve loss prevention by pairing video footage with POS transaction data
Solink automatically pairs video with POS transaction data without the need for a text inserter box. This allows you to search through all of your high-risk transactions in minutes to and then visually review what actually happened.
While not every discount, cash refund, or void is an instance of POS employee theft, they are often the tactics used to steal from a place of work. Retail video analytics gives you the ability to confirm POS procedures are being followed correctly.
Confirm stores are opening on time and not closing early
Staff shortages and time theft can lead to retail stores not being open for the entire planned schedule. In a mall setting, the lost sales can be compounded by fines paid to the property management firm.
Retail video analytics can be used to automatically check every store is opened and closed according to the schedule. Simply set up a motion alert on the storefront security gates for the period around the open and close time to confirm they are opened according to schedule.
Here’s what Rhonda Sondrol, a Pet Valu Franchise Owner, has to say:
“When we don’t have a sale before 10:00, I want to know why. Did the store really open at 9:00 like it’s supposed to, or did it open at 9:30?”
Reduce false alarm fines with video verification
In many parts of the world, law enforcement no longer responds to unverified commercial alarms because as many as 99% are false alarms. Where law enforcement does still respond, hefty false alarm fines are levied.
Verified alarms provide a layer of protection from false alarm fines, while improving emergency response when they are necessary. Advanced video analytics systems give retailers better alarm systems that can differentiate between a late vendor entering the premises and a true threat.
Solink Professionally Monitored Video Alarms protects entire areas instead of just doors and windows, providing better security and a lower cost and without the need for a separate alarm system.
Uncover discount abuse
Discount abuse can be hard to uncover. Any given discounted transaction could be legitimate or an indication of theft. Without an easy way to search through transaction data and then review the paired video, it can be hard to differentiate between legitimate discounting and theft.
Solink Event Search gives retailers the ability to filter through transactions using multiple criteria to narrow down investigations. For example, you could look for large discounts during periods where the manager is not in the store performed by a specific employee. Then, by viewing the video footage of that smaller set of transactions, you can confirm whether the employee is being dishonest.
Prevent return fraud
Return fraud is one of the most common types of retail theft. It comes in many forms, but the most common indicator is a cash return. The fraudster doesn’t want to be tied to the transaction, so would prefer to receive the return in cash rather than applied to a credit card.
As one of the highest risk transactions, video review of cash refunds should be part of any loss prevention work flow. Even when legitimate, these sales-reducing transactions should be minimized.
Automate stock level monitoring
Solink Sidekick AI (in beta for current users) uses generative artificial intelligence (GenAI) to help retailers uncover issues from slip and fall risk to empty or disorganized shelves. By simply asking plain English questions, users can learn about the current state of their stores.
Operational shrink reduction is made possible by improved ordering and inventory management. Since theft and damage can make official inventory counts an overestimate of merchandise stock levels, using only data can lead to popular products being sold out. This leads to lost sales and lower revenue.
Improve inventory management with Motion Search
Another way to improve inventory management is to track down shoplifting incidents. Many retailers focus only on the cost of the lost merchandise. This leads them to assume that, once the stolen merchandise has left the store, there’s little recourse and it isn’t worth the time to investigate the incident fully.
However, the cost of theft can be compounded by improper inventory counts. That product is no longer available to be sold despite still being counted in your inventory management system (IMS). When a customer wants to buy that item and it is no longer available, the store suffers a lost sale that exceeds the loss associated with the theft. That disgruntled customer may then choose not to return to the store, reducing sales long into the future.
Increase productivity and eliminate time theft
Employees not working when they are supposed to is a more pressing issue than ever. “Bare minimum Mondays” and other social media campaigns have made the act of time theft seem virtuous to too many people.
One of the simplest ways to uncover time theft in a store is to use video analytics. Simply skip through motion events on the employee entrance or above the time clock to see exactly when someone is arriving for work or whether “buddy punching” is occurring.
Utilize heatmaps for better merchandising and store design
Retail store design requires an interactive approach. It’s not always immediately possible to understand what will lead to the best sales numbers. Here’s an example from a recent episode of the Solink in the Cloud podcast.
“I can give you a silly example that none of the marketers probably didn't even think of. We have a coffee company that's got a coffee press that, it's not meant to, but it legitimately looks like a big Mickey Mouse. Okay. It really does. It's the way it's formed, it looks like at first glance, like Mickey Mouse. So where they had it on the shelf, kids for whatever reason were pointing this out. It really does look like Mickey Mouse at first glance. One of the things was, when we did the analytics on this, because they were having it moved around according to their analytics, people were touching it, but very few were buying it. When we actually did the review on it, we found the people who were touching it were actually kids who were seeing it and then showing it to mommy who was then at times buying it. So for the shelf placement, they decided to drop it down to the bottom shelf and legitimately their sales went up, as silly as that is.”
Heatmaps can help you understand how customers move around your store. This in turn can provide you with a lot of information, from whether visitors to your store had seen a recent marketing flier to where to place merchandise to improve sales.
Monitor queue lengths to improve customer service
Retail video analytics technology allows you to ask “how many people are currently in queue” and get an accurate count for each of your stores. When lines are long, customer experience drops, and there is even the chance that people give up and leave without making their purchase.
Confirm in-store marketing campaigns are implemented
When the head office sends out new marketing materials, for example front of store displays or new posters, they no longer need to either trust store managers are putting them out or visit the store in person to confirm compliance.
Instead, you can use AI retail video analytics to confirm the display is up. Once you’ve confirmed which stores have, or have not, put out the marketing materials. Then, it’s just a matter of calling up the locations that have not and remind them why it is critical that new marketing materials are deployed.
Analyze customer paths and dwell times
Understanding how customers move through a store and where they spend the most time can provide invaluable insights for improving store layout and product placement. Video analytics enables retailers to track customer paths and analyze dwell times in specific areas.
Achieving this level of insight involves deploying video analytics across the store to monitor and record customer movements. This data helps identify hotspots, bottlenecks, and areas of the store that may be underutilized.
The value comes from using these insights to optimize the store layout, enhance product placement, and improve the overall shopping experience. By aligning the store’s design with customer behavior, retailers can increase sales, improve customer satisfaction, and encourage repeat visits.
Optimize lighting and energy use
How confident are you that the lights are being turned off at night across all of your retail locations? While energy use might not top the list of priorities of loss prevention teams, it is an easy win to achieve.
Scheduling your retail video analytics system to confirm whether lights are turned off thirty minutes after the store closed can help reinforce this budget and environment friendly activity.
Detect and respond to emergencies quickly
Video alarms are a smart security solution and not simply a switch that detects if a door was opened. That means the types of emergencies that can be detected go well beyond a person prying open the front door.
Here’s an example from the Solink in the Cloud podcast of using video alarms to respond to an emergency far faster than would have been possible without retail video analytics.
“If we get back up one more time on the facility side, I've got an amazing story. We received an alarm, a video alarm through a client who's using both ADT and Solink video. We received a call for a restaurant using Solink. The video alarms operator actually said, ‘I don't know what I'm seeing, but it doesn't look right.’ The call was forwarded to someone on my team. They didn't answer. It came to me. I pulled it up on my phone, and I thought it was smoke. I knew it was either smoke or possibly steam. It ended being a hot water pipe that had burst, so it was sending steam up into the camera, which looks like smoke at times. I had them dispatch the fire department. It didn't show up on the panel alarm because it didn't pick it up as motion. We dispatched the fire department. They were able to get into the restaurant and shut off the pipe. The positive about that was my company also handles risk for this department. It ended up being a $6,400 cleanup, but they told us that, had it gone on from 2:00 a.m. to restaurant opening, it would've been in the six figure range.”
Monitor supplier deliveries and logistics
A lot of issues arise during deliveries. Vendor theft is just one of them. For many stores, deliveries are supposed to include placing the items on shelves in the stockroom but drivers ignore this request due to tight schedules. Similarly, a missed shelf can lead to merchandise, sometimes including perishable items, being lost.
Another issue is deliveries arriving outside of receiving hours. In a store with only one employee, showing up during normal business hours could leave the front of the store empty. This is a major loss prevention risk, leads to poor customer service, and can be stressful for an employee who needs to balance competing demands.
Retail video analytics can help you review how vendors are delivering goods and provide the evidence needed to follow-up when things don’t go as planned.
Validate cleaning schedules and quality
Cleaning and maintenance services are critical to creating a safe and welcoming environment for customers. It’s also expensive. However, since this work is usually done outside of working hours for store staff, it can be difficult to confirm the work is being done.
Here’s how Christina Liu, the Operations Manager at 12 Baskets, uses Solink’s retail video analytics solution to confirm maintenance work is done:
"It doesn’t snow very often in Vancouver, so when it does we know. I use the same service after every snowfall, which costs $1600. It was clear they hadn’t come so I called them to dispute the charge. They told us they were there between 12:00 and 6:00 a.m. I couldn’t find them in the video footage, so they gave us a different time window. Finally, I got my money back. It really makes me wonder how many times they didn’t come previously and I couldn’t dispute it."
Facilitate remote store management
Remote access is an essential feature for loss prevention software. As businesses grow from even one to two locations, owners can no longer be at their stores everyday. To make sure things run smoothly, management needs to be able to see how things are going remotely.
For large businesses with thousands of locations, remote monitoring is even more critical. This gives senior managers the ability to keep track of security, loss prevention activities, and sales in real time. By having access on a mobile phone, managers can visit one location while keeping an eye on another.
Reduce health and safety fines with Blocked Exit Detection
Solink Blocked Exit Detection uses AI to detect when an emergency exit route is obstructed. As one of the most common health and safety violations, these alerts can keep people safe in your business while reducing the risk of hefty fines.
Use Solink for retail video analytics
Solink offers a comprehensive solution for retailers looking to leverage the power of video analytics. By integrating seamlessly with existing CCTV systems and POS data, Solink provides real-time insights and analytics that can transform retail operations.
From optimizing staffing and enhancing security to improving customer experience and inventory management, Solink’s platform is designed to meet the diverse needs of retail businesses.
Want to see how your CCTV system can provide new business opportunities? See how Solink can help.
