Magazine Article | May 17, 2007

DVR, Exception-Reporting Software Offer Quick Payback

Source: Innovative Retail Technologies

This grocer yielded a 30-day payback on its exception-reporting software and DVR (digital video recorder) solution.

Integrated Solutions For Retailers, June 2007

Most providers of LP solutions claim a retailer will identify sufficient cases within 30 days of implementation to pay for the software. And, to their credit, swift paybacks are reality for most retailers when implementing LP solutions. At Balls Food Stores, this was certainly the case, as the retailer now quickly identifies perpetrators and generates solid evidence of wrongdoings. Balls Food Stores owns 16 Price Chopper and 13 Hen House grocery stores in Kansas and Missouri. Its Director of LP, Jerry Lutjen, and its Corporate LP Manager, Jeff Gaines, created a team and a system that globally monitors the POS, store entrances/exits, and the perimeter of store locations to minimize loss.

Store locations were monitored using VCRs, but the quality of video was poor, because tapes were used repeatedly and saved for only short periods. During an investigation, Gaines or Lutjen traveled to store locations to conduct videotape research of events. Finding this process inadequate, Gaines' first step in controlling losses was to install DVRs to record digital video in all stores. Five years ago, Gaines tested DVRs to prove their worth to his superiors. "We selected DVRs from i³DVR International, Inc. because they could be used with third party software, whereas the other DVRs tested could not," says Gaines. "We wanted to use VNC [virtual network control] software to update PCs remotely from headquarters. We also wanted to use a device called iBoot to ensure the DVRs were running properly and allow a remote reboot if necessary."

Lutjen created an exposure plan, installed the DVRs, and later installed additional cameras to improve coverage. Most stores have 32 cameras, which are handled by two DVRs; however, larger stores require extra coverage and use 48 cameras and three DVRs. Specific store areas including POS registers, cash offices, high-dollar items (e.g. meat, liquor), and entry and exit doors are monitored by the cameras.

DVR, POS Integration Is Valuable
While DVRs improved the quality of video at stores, Lutjen searched for an exception-reporting system to integrate with the captured video. He and Gaines selected XBR Store Analytics from Datavantage, a subsidiary of MICROS Systems, Inc. While the initial integration with the DVRs was months longer than Gaines originally expected, the integration was profitable. Gaines used a shareware program called K9 from Tardis to synchronize the date and time on all servers/PCs running Windows 98 or 2000 (Windows XP has the 'net command' feature, which synchronizes time), time clocks, DVRs, POS registers, and biometric systems. American Digital Security, which is Balls Food Stores' camera and DVR vendor, convinced i³DVR's parent company to write an application to link the date, time, store, and transaction number between cameras and the exception-reporting software. Gaines' team now launches video from the exception-reporting software via a link that accesses a table listing the site codes for each store, camera, DVR, and register.

While Gaines feels the benefit of Balls Food's LP solution progressed as the system improved, the retailer realized a payback within 30 days of the DVR and exception-reporting software installations. "We spent approximately $5,000 for our first DVR, but the first investigation following its installation helped identify a case worth $261,058 which immediately set the groundwork for future installations," says Gaines. "Once we integrated the POS and DVRs, we soon realized that the software would allow us to better manage investigations. We began to recover our investment by swiftly identifying problems and preventing them from developing into losses."

Gaines deployed an intranet site for employees to report questionable behavior performed by other employees or customers. When a report is submitted, investigators place a short movie clip of related video on the retailer's LP Web page and send an alert to store management requesting that they view the video clip. This quickly disperses details of security alerts to other locations. In the past, substantiating events on videotape was cumbersome and time-consuming without high-quality video and a link from the exception-reporting software. The next step for Gaines and Lutjen is to trickle 'live' data from the POS terminals into the exception-reporting software, thus eliminating the existing 24-hour delay of this data transfer.

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