Magazine Article | February 15, 2008

Minimize Shrink With Digital Video Surveillance

Source: Innovative Retail Technologies

A digital video management system (DVMS) helps an apparel retailer to proactively address internal and external losses.
A digital video management system (DVMS) helps an apparel retailer to proactively address internal and external losses.

Integrated Solutions For Retailers, March 2008

A 51-store, high-end fashion retailer's move into DVR (digital video recorder) technology was prompted by big plans for growth. "We opened our first store in 2001 and by 2004, when I joined the company, we had expanded to about 32 stores and were poised to open around 20 more in a short time frame," the executive explains. "We're a recognized brand name. I knew that the more stores we had and the more visible we were to consumers, the clearer a target  for theft we'd be. We needed technology to make us proactive, so we could address an LP (loss prevention) issue before it got out of hand."

The retailer wanted a solution flexible enough to interface with its POS system. Simplicity of operation was another key requirement. The LP director wanted the ability to remotely guide authorized personnel through the process of locating and 'zeroing in' on captured images, even via telephone from his car. Of five systems evaluated, the i3DVR Lite system was deemed the best option.

Suspicious Incident Pinpointed During Test
The retailer tested the system in a new store for a few weeks before initiating a nationwide rollout. The outcome of an incident that occurred during the test period provided additional evidence that deploying the solution was likely the right move. A woman approached employees at the test store, claiming that she had previously purchased two bags' worth of merchandise but had left one behind. A visiting district manager conducted a search of images that had been captured at the time of the patron's visit and confirmed that the woman had indeed exited the store with two bags rather than one. "It wasn't clear whether this person was trying to pull a fast one or if she was just confused and had really left her second bag somewhere else, but either way, the system prevented us from paying for her mistake," the executive states.

The trial deemed a success, all stores that opened after October 2004 were equipped with the system. Each store gets a DVR in the manager's office, plus one camera for every two cash registers in the POS area. Other components include a minimum of one camera on the sales floor and one camera apiece at the entrance and in the receiving area. Images, captured by the cameras at a rate of 120 frames per second, are transmitted over coaxial cable to the DVRs in the managers' offices and stored on PCs there. Images can be received in-store, using the system's search engine as an 'index' to frames captured at defined times. Images can also be viewed remotely, via a password-protected Internet site.

"We don't ask anyone to sit and monitor the videos, because we don't want to seem 'Big Brother'-like with our employees," the LP director states. "However, we do go into the system if there's a question that something is wrong."

He adds that at least one of a handful of stores retrofitted with the DVR system has recorded a slight drop in shrink. He says the technology consistently yields even more significant benefits.

"It allows us to be more proactive and identify situations before they escalate," he explains. "For example, if one of our stores is hit by a gang of perpetrators, we can give managers and staff at other stores access to the pertinent recorded images so they know to be on the lookout for the same people."

System Helps Recover Stolen Merchandise
Not long ago, a group of thieves broke into one of the retailer's stores through the back door. By the time the police arrived, the perpetrators had fled the premises with more than 500 SKUs of merchandise. Members of the ring burglarized another store, but were caught in the act. A comparison of images captured during the two incidents allowed police to determine that the same gang had been responsible for both burglaries, spurring them to search the thieves' 'hideout' for stolen goods. The chain eventually recovered nearly 90% of the items that had been stolen.

"Several times, we've been able to use the images from the DVRs as proof of wrongdoing that no attorney could possibly refute," says the LP director.

The technology also yields benefits outside the LP realm. Notably, visual merchandisers use the system to remotely assess displays, then contact stores to provide feedback and/or suggestions for adjustments. "We have never added it up, but the savings in airfare from remote visits is very significant," the executive asserts. In addition, store managers view images to ensure that customers are being serviced properly. Based on these results, the chain will continue to install the i3DVR system in all new stores, as well as to retrofit it into stores that were open prior to the implementation.

For More Information On i3DVR Go To