Interface Systems

Video Monitoring Use Cases

Matt Smitheman — Fri, 29 Mar 2024 10:18:44 +0000

Matt Smitheman

Senior Solutions Consultant

Business Security Remote Video Monitoring Video Analytics

8 Video Monitoring Use Cases for Retail and Restaurant Chains

Video monitoring has become the first line of defense for asset protection and loss prevention teams at retail and restaurant chains. Use cases for video monitoring are already well understood and they cover the most common threats – burglary, robbery, shoplifting, vandalism, and internal theft.

However, what is not understood is to what extent video monitoring addresses these risks and what else can be accomplished by video monitoring in the context of current technology innovations.

This blog post offers loss prevention or asset protection teams insights on how a combination of advanced video monitoring technology along with a well-trained monitoring team can not only deliver a wide range of business security services but also offer advanced operational insights, and improve employee morale.

1. Stop Shoplifting

After the brief, COVID closure-induced lull, shoplifting is now a growing threat for retailers. According to the Council on Criminal Justice, shoplifting incidents rose 22% between 2022 and 2023. For a habitual shoplifter, the presence of video cameras is just a speed bump and they find ways to cleverly hide their deeds and identities with Covid hold over masking or meticulously plan their act. Hence, traditional video monitoring solutions have limited applications other than identifying perpetrators if the camera device choices and installations are properly set up.

However, if video monitoring by a remote monitoring team is enhanced with the ability to issue voice-down commands, shoplifters can be stopped in their tracks even before they commit shoplifting and, in many cases, force them to rethink their choices even after they pocket the merchandise.

Shoplifting is a crime of opportunity and it ends the moment the shoplifter realizes someone is watching them. The overt security presence in the form of a voice-down commend either recorded or live has a significantly better impact on shoplifters who are accustomed to video surveillance.
When live video monitoring can be requested on-demand by a store employee who has direct access to a remote command center via a security phone, suspicious actions by anyone at the store can be spotted and acted upon. Remote security staff can then deliver targeted voice-downs that can sometimes describe the person committing a crime or issue a general command about the security presence.
Remote video monitoring and voice-downs can also be timed to align with key moments of the day when shoplifting spikes. For example, convenience stores near schools see a spike in security incidents when the school ends for the day in the afternoon. That’s when “gangs” of teens walk into a store and start pocketing merchandise.

Issues in Combating Shoplifting

How Video Monitoring Can Help

Shoplifters are no longer deterred by passive surveillance.
Live 24/7 video monitoring may still require action on the ground when a shoplifter is caught in the act.
Involving employees in confronting or stopping shoplifters is risky and often not encouraged by the store operators.
The presence of security guards increases the risk of confrontation, life threat, and liability claims exposure.

Periodic virtual tours with live voice-down commands can demonstrate “active” security presence and deter shoplifters.
Using security phones or concealed panic buttons, employees at the store can request live monitoring and voice-down anytime they see suspicious activity.

2. Deter Smash and Grab

Smash-and-grab incidents have become a serious threat for many retailers and even restaurants. Some of the worst affected states like California have increased spending on law enforcement to combat smash-and-grab incidents in the state that’s forcing retailers and restaurant chains to close down operations in high-risk areas.

In situations where smash and grab is already in progress, the standard operating procedure at most retailers is for employees to back off and not confront the criminals. If a security guard is present on site, the situation can become more challenging as the guard may be targeted by the gang as they seek to subdue any potential threat to their plan.

Remote video monitoring with interactive capabilities can make a difference in minimizing losses and providing a greater chance for law enforcement to apprehend smash-and-grab perpetrators.

Remote surveillance with periodic voice-downs announces active security presence to those casing a location. With interactive monitoring, employees can request active monitoring using the security phone if they suspect anyone at the store acting suspiciously such as asking where the most expensive items are kept.
When remote monitoring is combined with live voice-downs, criminals know they are under surveillance and law enforcement is probably on their way. This can help minimize damage and loss as the perpetrators look to leave the premises quickly.
Remote video monitoring enables faster information dissemination to internal loss prevention teams, mall security, and law enforcement. This can be valuable in securing nearby locations proactively or improving the chances of apprehending criminals.

Issues in Combating Smash and Grab

How Video Monitoring Can Help

Gangs operate with impunity as SOPs in most consumer-facing establishments focus on employees stepping aside and directing customers away from gangs.
There is no way to stop gangs from casing the location.
The presence of security guards increases the risk of confrontation, life threat, and liability claims exposure.
Real-time information about gangs is usually not available for law enforcement or mall security to take action.

Alert the central station to seek active surveillance assistance or initiate voice-downs based on the situation that’s unfolding while staying away from harm’s way.
Deter casing with frequent remote virtual tours accompanied by voice-downs.
Gain complete situational awareness and pass on valuable information to security teams and law enforcement.

3. Prevent Vandalism and Loitering

Retail and restaurant chains across the US are battling incidents of smash-and-grab, break-ins, and vandalism. Brands with downtown locations are facing additional headwinds in the form of fewer footfalls, homelessness, vandalism, and vagrancy. With retailers cutting back on hiring, more retail employees are working alone in high-risk situations.

While retailers and restaurant brands have complete control inside the four walls of their stores, they have little or no control over what happens outside and in the perimeter. In downtown locations abetting back alleys, potential troublemakers can find hidden spots to congregate or engage in nefarious activities.

While remote video monitoring can offer 24/7 surveillance inside and outside the store, its effectiveness can improve exponentially with AI-enabled cameras that can accurately detect people or vehicles. Automated detection of unauthorized presence of vehicles or people can be augmented by automated voice-downs, strobes, and lights to ensure prompt action is taken to mitigate risks.

An intelligent voice-down solution that plays out pre-recorded messages when the AI camera flags a security threat can deliver a wide range of security outcomes:

Detects threats autonomously and plays appropriate pre-recorded messages, optional strobes, and/or lights.
Customizable for diverse use cases - after-hour drop-offs, loitering, vagrancy or illegal encampments, vandalism, and unauthorized parking.
Plays a sequence of follow-up messages based on the subject’s compliance with warning messages. Helps in shortening any undesirable activity before it causes major damage.
Handles non-security tasks too - welcome greetings for customers during business hours or remind employees about operating procedures.
Can be integrated with the command center for live video monitoring and voice-downs and give store employees the means to contact the command center for real-time monitoring or voice-down.

Difficulty in Securing the Perimeter

How Video Monitoring Can Help

Monitoring the entire perimeter of a store or restaurant for potential security threats such as loitering, vandalism, and casing is not always foolproof as it requires either a security guard on-site to make frequent rounds or have remote monitoring teams review live video feeds at all times.
Human monitoring for large perimeters (both onsite and offsite) is prone to errors and lapses.
Employees may end up confronting loiterers or vandals. This might escalate the situation or put them in harm’s way.

Offer continuous and proactive security presence with AI-enabled video monitoring augmented with voice-downs and lights.
Trigger voice-downs to announce security presence based on automated threat detection or alarm events such as glass-break alarms.
Deploy 360-degree, always-on monitoring with no gaps.
Eliminate the need for employees to directly interact with troublemakers.
Benefit from versatile applications that go beyond securing the premises.

Find out how Interface uses AI-enabled cameras to deliver autonomous video monitoring that stops crime before it happens.

Learn More

4. Enhance Post-Incident Response

Consumer-facing businesses with retail locations bear the brunt of social or civil unrest. Way back in 2020, when the country was swept by widespread social unrest, thousands of store locations were looted or vandalized.

While there are several ways to proactively deal with the safety and security of people and merchandise in the event of social unrest, how can retailers, restaurants, and other consumer-facing businesses deal with the aftermath of unrest? The same question applies to more frequently occurring incidents such as robberies, floods, or smash-and-grab attacks.

“While we cannot always control what happens outside of our stores and facilities, we can shape the culture within”, remarked the then-CEO of Macy’s speaking about the 2020 race riots.

At a time when employees are on the edge and customers are apprehensive about visiting stores that are recovering from recent attacks, video surveillance coupled with interactive monitoring capabilities such as voice-downs, can mitigate anxiety among employees and customers.

For example, remote business security service providers like Interface help customers address this issue by adopting the following protocols:

Demonstrating live security presence 24/7 using a combination of video and interactive monitoring greatly improves the work environment and customer experience, especially in the aftermath of violent incidents.

Aftermath of a Security Incident

How Video Monitoring Can Help

Employee anxiety about safety at the location.
Higher perceived risks when opening or closing the store.
Diminish customer footfall and reduce time spent at the store.

Demonstrate security presence by increasing the frequency of virtual walkthroughs and conducting live voice-downs to reassure employees and customers.
Act as eyes and ears for employees opening the store or closing the location.

5. Boost Employee Retention

A recent survey conducted by Motorola found that 2 out of 3 retail workers had expressed concerns about their safety at work. In another survey by Verkada that included all consumer-facing businesses, 50% of those surveyed declared they were considering leaving the employer if they did not improve safety.

At a time when retail and restaurant businesses are already reeling from high employee turnover, increasing incidents of crime and violence at the workplace only make this problem acute. Boosting safety by deploying security guards is expensive, unreliable, and often negatively impacts the perceived safety as new customers may see guards as a sign of trouble.

Remote video monitoring with interactive capabilities can address these challenges.

Remote video monitoring augmented with periodic voice-downs reassures employees and customers about a constant security presence.
Offering employees multiple options to immediately seek attention overtly or discreetly (such as using security phones and hidden panic buttons) greatly alleviates security concerns.
Interactive video monitoring services like on-demand security escorts during store opening, closing, or trash runs add to the sense of safety among employees who may be operating alone.

Employees feel safer when they can interact with a live security professional on demand or notice that someone is proactively checking in on them. It’s a “warm safety blanket” that boosts morale and improves employee retention.

Challenges in Employee Retention

How Video Monitoring Can Help

Increasing incidents of disruptive customers, vandalism, vagrancy, and violent crimes force frontline employees to quit.
Employees fear for their safety when working alone during night shifts when there is no one available to seek help.

Offer continuous and proactive security presence with remote video monitoring.
Augment video monitoring with periodic voice-downs or on-demand voice-downs to announce security presence.
Give employees the option to virtually summon security presence for carrying out high-risk tasks.

6. Monitor Overnight Construction or Renovation

Retailers and even restaurant chains understand the importance of customer experience in bringing back customers and increasing the basket size. For example, Walmart spent about $9 billion in the last two years to renovate over 1400 stores. Restaurants too are revamping their locations with expanded drive-thrus and streamlined dining areas.

The bottom line is that consumer-facing multi-site businesses will have to deal with periodic overnight construction activity at some of their locations. Securing the locations when you have a third-party construction crew on the premises is a tricky challenge especially when you have valuable merchandise, equipment, or inventory at the same location.

Just deploying a security guard to watch the construction crew is expensive and has several drawbacks. Security guards may not be able to maintain vigil and ensure compliance all the time, they may show up late or need to schedule their breaks properly.

If remote video monitoring capabilities are already available at locations where overnight construction is scheduled, it throws open a variety of options for the business to monitor if the construction crew is compliant and everything in the location remains intact.

With remote video monitoring and interactive monitoring capabilities, businesses can:

Schedule temporary remote virtual tours when the crew is working on-site to ensure the crew is not violating any policy (leaning against a display unit, not covering up their boots, to name a few).
Make available interactive monitoring capabilities for the construction crews to check in on a need basis such as when leaving the site for a break or coming back in.
Check if all the entry and exit points are secured at all times.
Deliver live voice-downs on a need basis to ensure compliance.
Record videos of compliance and policy violations to create an audit report for the business which can also be shared with the construction company to ensure better compliance and safety at the location.

Remote video monitoring allows multi-site businesses to track and monitor construction safety at hundreds of locations at a time at a fraction of the cost of hiring security guards. In addition, the recorded video serves as a powerful audit and training tool for the construction crew and the loss prevention or asset protection teams.

Issues in Monitoring Overnight Construction

How Video Monitoring Can Help

Need for deploying expensive security guards at every location.
Last-minute guard replacement challenges or no-shows.
No tangible value in terms of learning or best practices is possible.

Replace security guards with an advanced solution at a fraction of the cost for the duration of the overnight construction project at any number of locations.
Service is always available as per the construction schedule.
Intervene in real-time with voice-downs to address safety issues or policy violations.
Audit locations for compliance or policy violations by construction workers. Share audit reports with stakeholders for remediation.

7. Manage Unattended Direct Store Deliveries

Unattended Direct Store Deliveries (DSD) is a popular restocking model in several retail categories like grocery, beverages, and large restaurant chains. This delivery model involves a supplier or distributor to ship the products directly to the store every night for restocking the location.

The DSD model is cost-effective for the business provided it’s managed properly. Because deliveries are unattended and made by third-party drivers when the restaurant or store is closed or running with a skeletal staff, there is an increased risk of theft, liability claims, or accidents.

A video monitoring solution that’s integrated with access control and intrusion alarms at the location can address these risks comprehensively.

Assign specified time slots for 3rd-party drivers to access the backdoors for restocking.
Track all instances of backdoor opening and closing and record video evidence every time the door is opened.
Track exceptions such as door open outside scheduled delivery slots, open doors, and movement of delivery personnel outside designated areas.
Minimize fraudulent liability claims by 3rd-party drivers.
Minimize the need for expensive security guards.

Challenges in Monitoring Unattended Deliveries

How Video Monitoring Can Help

Completely reliant on 3rd-party drivers to ensure every delivery is done as per the rules and policies governing unattended deliveries.
Absence of irrefutable evidence in case of injuries, theft, property damage, or inventory damage.

Enforce access to the facility only at predefined time slots and capture evidence of compliance by integrating video monitoring with access and alarm systems.
Record exceptions and use video evidence for training, claim management, or process improvement.

8. Audit Business Operations

Monitoring store or restaurant operations is a complex challenge for brands, especially for those with numerous locations and diverse formats. To ensure compliance with corporate standards and brand guidelines, retailers and restaurant chains deploy on-site auditors who may conduct planned or even unscheduled audits at different locations.

Onsite audits, while being effective, have inherent limitations. It’s expensive to deploy auditors on-site when there are thousands of locations to manage. The auditors can’t observe what’s happening while remaining discreet in areas where customers are out of bounds.

Video monitoring can address these issues. Because almost all parts of the store or restaurant are under video surveillance for security purposes, it makes a lot of sense to start auditing the location by observing the security footage.

Some of the areas that can be easily audited using video monitoring include:

Safety and Security: Store opening or closing procedures, delivery management, bank runs, cash movement.
Customer Experience: Employee uniform compliance, clearing shopping carts, clearing spillages and debris, cleaning tables and surfaces.
Merchandising: Stock-outs, display guidelines, promotions compliance.
Staffing: Queue lengths, dwell times, staff on the floor.

Did you know? Interface offers advanced business analytics solutions (including remote audits) for retail and restaurant chains. Find out how your security cameras can do a lot more than what you thought was possible.

Learn More

Challenges in On-Site Audits

How Video Monitoring Can Help

Site audits are expensive.
On-site auditors may not be able to perform discreet audits at all times.
It is difficult to deploy auditors at all locations.
Site audits can be disrupted due to external factors such as poor weather, transport disruptions, or pandemics.

Leverage existing security camera infrastructure and minimize the need to deploy on-site auditors to dramatically reduce costs.
Conduct discreet audits at scale for any number of locations or schedule audits based on operational cadence.
Audit any location at any time of the day or week and under any circumstance.
Capture screenshots screenshots from the video recording or live video to go with the audit reports.
Extend the use of security cameras beyond the core security use cases to accelerate ROI from any camera hardware upgrade that may be needed.

Make Your Security Cameras Work for You

Schedule a free business security consultation to find out how Interface can help you discover what loss prevention teams have always been missing.

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About the author

Matt Smitheman

Senior Solutions Consultant

Matt Smitheman is a veteran in the remote video monitoring and physical security industry, He is a trusted advisor for large multi location retail and restaurant businesses on their comprehensive security strategies. He has enabled companies to enhance their customer and employee safety, maintain compliance, and mitigate risk.

Network Modernization – A Practical Guide for Multi-Site Enterprises

Bud Homeyer — Fri, 23 Feb 2024 05:59:31 +0000

Bud Homeyer

Chief Operations Officer

Managed Network & Voice PCI Compliance Restaurants Retail

Network Modernization – A Practical Guide for Multi-Site Enterprises

What’s Driving Network Modernization in Multi-Location Enterprises?

Multi-site enterprises and consumer-facing brands such as retail and restaurant chains have bounced back from the shock of COVID-19. In hindsight, the winners are those retail and restaurant brands that could adapt to dramatic shifts in customer preferences, high frontline staff attrition rates, and a slew of unexpected physical security and supply-side challenges.

The only way businesses can deal with future uncertainty is by investing in human capital and technology infrastructure that can support rapid changes in operating models.

Here are the key reasons why network connectivity and security hence take center stage in any program that aims to build an agile multi-location business.

Industry Disruption

Why Network Modernization is Needed

Challenges in Hiring & High Employee Turnover

According to the National Restaurant Association, the restaurant industry is currently operating with a labor shortfall of 540,000 employees. The US Bureau of Labor Statistics reported the annual average total separation rate for the retail industry was 5% compared to 3.9% across all industries in May 2023.

Boost Employee Productivity

Retail and restaurant operators have to keep a sharp focus on boosting employee productivity at every touchpoint and automating mundane activities. A scalable network backbone is critical to deploy time-saving productivity and collaboration applications and improve application performance.

Changing Customer Expectations

According to Brandwatch, in 2023, consumers are placing a lot more emphasis on convenience. There is a 12% increase in social media chatter about convenience and shopping experience compared to the previous period.

Create Superior Customer Experiences

Restaurant brands have to reimagine the dining space with a focus on enhancing the speed of service, offering greater convenience, and a wide range of digital ordering services. Similarly, retailers have to invest in delivering superior in-store experiences and last-mile fulfillment across channels. None of these are possible without the underlying network and connectivity infrastructure.

Rising Food Prices and Inventory Glut

The US Department of Agriculture reported that the restaurant consumer price index in July 2023 was 7.1% higher when compared to the same period in 2022. This has impacted both retailers and restaurants. Rising prices also mean unsold inventory. Markdowns and discounts help move them but leave a serious dent in the bottom line.

Invest in Streamlining Operations

Retailers and restaurant brands want to streamline every aspect of their operations to cut costs. Economies of scale are needed in the entire supply chain and the underlying tech infrastructure to take advantage of standardized processes. Well-designed network backbones can optimize operating costs and support advanced analytics solutions to streamline the business.

Violence & Theft

Business locations, especially those in high-risk areas, face significant threats in the form of violent customers, robbery, and gun violence. Internal theft and cash handling risks have historically been a concern for retail and restaurant operators

Invest in Intelligent Security Solutions

Retailers and restaurant chains have to invest in intelligent security systems that provide advanced warnings and are capable of zeroing in on anomalies across millions of POS transactions. This requires investment in a wide range of cloud-based, AI-enabled sensors and data analytics. None of these applications can be deployed with outdated network infrastructure.

As multi-site businesses attempt transformative initiatives, they are faced with practical issues that go back to network design, labor-intensive network operations, management protocols, hardware procured from diverse vendors with differing capabilities, and network security vulnerabilities across the infrastructure.

Employees are becoming more mobile, accessing the network from various locations and endpoints beyond corporate IT control. They are also connecting to public clouds for essential business applications like Office 365.
IoT devices, widely distributed in remote and unsupervised locations outnumber human-controlled endpoints opening the door for new security threats.
Cloud service providers have expanded their presence across numerous branches, which connect directly to the cloud, bypassing corporate data centers.
With ever-tightening Payment Card Industry (PCI) requirements and data privacy regulations, restaurants and retailers face tremendous risk when migrating data from on-premise POS to cloud-based solutions that offer easier integration with inventory management, online ordering platforms, and the extended supply chain.
Support for bandwidth-intensive applications such as video management systems and devices with edge computing capabilities that deliver critical real-time data on store operations (such as security cameras) can be challenging when the last-mile connectivity is not properly handled.

The goal of any network modernization program should not only take into consideration the evolving technology solutions that drive transformation but also aim to create a resilient technology operating system that can change rapidly without creating bottlenecks in the future.

Challenges in Managing Legacy Network Infrastructure

There aren’t clear-cut answers. Most likely, retail and restaurant chains always have some part of the network designed decades ago and other parts that were added recently.

Outlets with legacy network components can still run online ordering operations, support in-store applications, and manage their supply chains. The real problem is in administering the network and the penalty it imposes through inefficiencies, downtime, latency, and security vulnerabilities. The limits of what a network infrastructure can support efficiently determine whether a network upgrade is needed or not (Refer to Exhibit 1).

Flat Network Architecture

Restaurant chains with a flat network architecture face significant challenges as the business grows and new requirements emerge.

1. Limited Segmentation

Without dividing the network into security zones, all devices and systems within the organization, such as point-of-sale (POS) systems, employee workstations, and guest networks, are interconnected. This lack of segmentation increases the attack surface, making it easier for an attacker to move laterally across the network. For example, a malware infection in a POS system could spread to the corporate network, compromising sensitive data and systems.

2. Increased PCI Audit Scope

In a flat network, the scope of the PCI audit expands, encompassing the entire network infrastructure, rather than just specific segments. This can increase the complexity and cost of compliance efforts.

3. Weakened Access Control

Without segmentation, it becomes challenging to implement role-based access controls, network segmentation based on user roles, or least privilege access principles. This can result in unauthorized access to critical resources, data leakage, and a higher risk of insider threats.

4. Performance and Scalability Bottlenecks

A flat architecture can hinder performance and scalability. Broadcast and multicast traffic, typically limited to individual segments, can quickly propagate throughout the entire network, leading to congestion, reduced bandwidth availability, and degraded performance.

5. Difficult Troubleshooting

Lack of segmentation makes it challenging to pinpoint the root cause of network problems. This results in increased downtime, extended troubleshooting efforts, and potential business disruptions.

Manual Failover

Manual failover relies on the availability of personnel to identify and respond to network failures promptly. There are serious risks of not upgrading to automated failover systems.

1. Limited Scalability

As the network grows in complexity, manually managing failover becomes increasingly challenging. The need for human intervention in every failover event can limit the network’s scalability and agility.

2. Increased Operational Complexity

Implementing manual failover requires detailed documentation, well-defined processes, and trained personnel who understand the failover procedures. It also increases the reliance on specific individuals or a limited group of staff members with the necessary expertise.

3. Prone to Human Error

There is an increased risk of human error during the transition, such as misconfiguration or oversight, which can lead to service disruptions or unintended consequences. Human error becomes more likely in high-pressure situations, potentially impacting the network’s availability and stability.

Centralized Network Security

Some retail and restaurant chains continue to rely on the security infrastructure at the data centers to do the heavy lifting. This approach can stifle application performance and increase network administrative complexities.

1. High Latency

Routing all traffic through the data center for security scans can increase latency and reduce the performance of internet-dependent applications, affecting productivity and user experience.

2. Increased Network Complexity

Implementing a centralized traffic backhauling architecture requires complex network configurations, including routing, load balancing, and secure tunnels to redirect traffic to the data center for security scans. This complexity can make network management and troubleshooting more challenging.

3. Limited Local Response Capability

Backhauling all traffic for security scans to a central data center can limit the ability to respond quickly to local network security incidents. Any network threats or anomalies that require immediate attention or localized mitigation experience delays due to the traffic redirection and the need to wait for security scans performed in the data center.

Legacy Routers, Modems, and Firewalls

Basic routers, modems, and consumer-grade firewalls lack advanced security functionalities, such as deep packet inspection, intrusion prevention systems (IPS), or advanced threat protection. This leaves the network vulnerable to sophisticated attacks and exploits targeting higher layers of the network stack.

1. Insufficient Traffic Visibility

IT teams may struggle to identify and address anomalous or malicious traffic patterns, making it harder to detect and respond to security incidents promptly.

2. Limited Scalability

As the network expands with additional branches, devices, and users, legacy routers, modems, and firewalls may struggle to handle the increased traffic volume and advanced security requirements. This can lead to performance issues and network bottlenecks.

3. Limited Support and Vendor Updates

Basic routers or consumer-grade firewalls often receive limited vendor support. This can result in outdated firmware, unpatched vulnerabilities, and a higher risk of security incidents due to the lack of ongoing security updates and patches.

Unmanaged Switches and Network Installation

Unmanaged switches offer limited or no visibility into network traffic and lack advanced monitoring features. Using them often results in ad hoc cable installations that hinder maintenance, troubleshooting, and overall network management efforts.

1. High Failure Rates & Poor Manageability

Unmanaged switches typically have a lower build quality that can lead to higher failure rates, increased downtime, and the need for frequent replacements.

2. Limited Scalability and Security

They lack features such as VLAN support, access control lists (ACLs), or traffic segmentation, which are essential for implementing network security policies and isolating different segments of the network.

3. Cable Loops and Performance Issues

Without proper cable management and oversight, unmanaged switches can contribute to cable loops leading to network broadcast storms, increased network congestion, and degraded performance.

Legacy WiFi Technologies

Businesses relying on legacy WiFi technologies are saddled with lower speeds, and limited bandwidth compared to newer standards like 802.11ac or 802.11ax (Wi-Fi 6 and Wi-Fi 6E). They may not offer the same level of coverage as newer standards resulting in dead zones or areas with weak signals within the premises.

1. Lack of Support for Critical Applications

Modern restaurant and retail chains often rely on various advanced applications and technologies like mobile point-of-sale (mPOS) systems, inventory management systems, order management systems, kitchen automation systems, and IoT devices. Legacy WiFi technologies may not offer the necessary capabilities to support these applications efficiently, limiting the potential for digital transformation and innovation.

2. Inability to Support High Device Density

As the number of devices connecting to WiFi networks continues to rise, legacy WiFi technologies may struggle to handle the increased device density as they operate on crowded and congested frequency bands, such as 2.4 GHz. This can lead to interference from other devices using the same frequency, resulting in degraded performance and unreliable connections.

3. Security Vulnerabilities

Legacy WiFi technologies may lack the advanced security features available in newer standards. This leaves the network more susceptible to unauthorized access, data breaches, and other security threats.

How Business Needs Can Be Mapped to Network Modernization

According to a 2023 retail industry CIO survey by Gartner, 35% of retailers surveyed cited “growth” as their priority, 27% said they will focus on customer experience, and 20% of the retailers surveyed are doubling down on technology modernization. In the restaurant industry, customer convenience and labor shortage were the key drivers for modernization. According to a survey of 300 restaurant operators by SpotOn, 75% of all restaurants surveyed planned to invest in technology modernization in 2023 to combat key labor shortages and offer better customer experience. These business imperatives are completely reliant on network modernization as highlighted below (Refer to Exhibit 2).

Business Drivers

Network Improvement Needed

Support for increasing transaction volumes, new store openings, and geographic expansion.

Ability to launch new locations using network templates and automation.

Minimize network downtime to ensure uninterrupted POS transactions and customer service.

Redundancy and fault tolerance mechanisms to mitigate the impact of hardware failures or network outages.

Strengthen network security to protect sensitive customer data and payment transactions.

Compliance with industry regulations, such as Payment Card Industry Data Security Standard (PCI DSS).

Enable smooth integration of online and offline channels to support unified commerce.

Connect in-store systems with ordering platforms, inventory management, and customer relationship management (CRM) systems. Support the integration of IoT devices for inventory tracking and layout analytics.

Improve visibility and connectivity across the supply chain for inventory management, logistics, and order fulfillment.

Build integration with vendors, suppliers, logistics, and delivery partners for real-time data exchange and coordination.

Elevate customer experience at the restaurant and the store.

Deploy reliable and fast Wi-Fi for customers and enable mobile device usage. Support dynamic or personalized menu boards, and enhance drive-thru and checkout experiences.

Streamline network operations, reduce maintenance costs, and optimize network resource utilization.

Monitor network performance, security, and compliance from a single dashboard.

Network Transformation Case Studies

The below case studies for a hypothetical multi-site business highlight two different approaches to upgrading the network based on business requirements.

Expand Drive-Thru and Phone Orders for a QSR

FeastOn was operating in a highly competitive QSR segment with a growing digital footprint. The company wanted to deploy a cloud-based POS integrated with an online ordering system, improve its ability to handle phone orders, and expand drive-thru services.

Network Requirements

FeastOn IT team identified the need for a high-availability design with 4-hour hardware replacement, WAN failover, redundant 48 port POE switches, 1 access point (guest and company use), VoIP with 4-6 corded phones, loud ringer, caller-ID integration with POS, integration of phones with text messages for order management. They required the ability to deliver drop-free calls during a WAN failure and to keep online orders (web and POS integrators, 60-70% of all orders) working while running on their backup connection. The current POS integration required a single public IP address that could be used over any circuit at each location for this to work.

Solution

FeastOn implemented two different network solutions based on traffic volumes and the growth potential of the location. One set of locations had a 4-hour hardware replacement SLA and the other set of locations came with a high-availability design that did not require immediate hardware replacement. The solution also included a cloud gateway SD-WAN solution that ensured phone calls did not drop during network failure and orders were able to flow seamlessly via the POS integrator that switched to the backup circuit. There were extra redundancy factors added to protect against any cloud gateway failures. This solution provided FeastOn with both WAN and hardware resiliency and met all application and phone failover requirements. This setup allowed them to continue to use some older POS setups while they transitioned to the cloud-based POS in phases.

Eliminate Downtime and Improve Network Security for a Retail Chain

QualityM realized that store operations were always hobbled by patchy network infrastructure nationwide. Network downtime was commonplace, network security management was a headache, and the legacy POTS phone system kept customers unhappy. PCI compliance kept them on their toes because of poor network design.

Network Requirements

QualityM hired a managed network services vendor to come up with a requirement for WAN redundancy, next-day hardware replacement, secure POS traffic, managed next-gen firewall, 24 port switch, two access points (guest and company use), and three cordless phones with an auto attendant that rings a group of phones to place orders.

Solution

The managed services vendor implemented a broadband circuit with automatic failover to an LTE backup. Every store had a single next-gen firewall, a 24 port switch (4 port POE injector used for the APs to keep cost down), and three cordless phones with auto attendant setup. The POS firewall sat behind the next-gen firewall in its security zone. This allowed the POS to use the WAN redundancy setup and still be secure from other network devices, which were separated into four other networks. This network design provided QualityM with a WAN-resilient and secure network.

Thumb Rules for Network Modernization

Irrespective of business needs or management expectations, there are several key factors and objectives retailers need to consider when evaluating network modernization solutions including:

Design the network to ensure high availability and minimize downtime.
Implement redundant network components such as routers, switches, and firewalls to prevent single points of failure.

Incorporate backup connectivity options, such as failover to secondary circuits or LTE backup, for uninterrupted operations.

Design the network to accommodate future growth and increasing network demands.

Consider the scalability of network devices, bandwidth capacity, and network architecture. Plan for potential expansion, new store openings, and increased customer traffic.

Conduct a thorough assessment of each store’s infrastructure and requirements. Ensure sufficient power supply, cabling, and physical space for network equipment.

Address any environmental factors that may affect network performance, such as temperature control and ventilation.

Evaluate and negotiate contracts with bandwidth providers to ensure reliable and cost-effective network connectivity.

Establish Service Level Agreements (SLAs) for uptime, latency, and bandwidth guarantees.

Maintain ongoing communication and relationship management with providers to address any issues or changes.

Assess existing contracts with vendors and hardware providers that are no longer needed.

Plan for a smooth transition to new vendors and hardware, including contract termination and equipment returns.

Ensure proper coordination between the network design and procurement/contract management teams.

Prioritize critical store applications, like POS (point of sale), inventory management, and sensitive IP traffic.

Allocate appropriate bandwidth and network resources to ensure optimal performance for these applications.

Implement QoS mechanisms to prioritize real-time traffic and minimize latency or packet loss.

Implement robust network security measures to protect sensitive customer data and maintain PCI DSS (Payment Card Industry Data Security Standard) compliance.

Utilize firewalls, intrusion detection and prevention systems (IDPS), and secure remote access mechanisms.

Apply secure segmentation to isolate critical systems and restrict unauthorized access.

Optimize network bandwidth utilization by leveraging caching, compression, and content delivery networks (CDNs).

Implement traffic shaping and bandwidth management techniques to prioritize business-critical applications and limit non-essential traffic.

Segment the network to enhance security, improve performance, and isolate different store functions.

Separate guest Wi-Fi networks from the corporate network to ensure data confidentiality and prevent unauthorized access.

Segment store operations, point-of-sale, and back-office functions to limit the impact of potential security breaches.

Provide reliable and high-performance Wi-Fi connectivity throughout the store premises.

Plan for adequate coverage and capacity to support customer Wi-Fi, mobile devices, and IoT deployments.

Implement secure guest Wi-Fi with captive portals, authentication, and encryption mechanisms.

Develop a detailed migration plan outlining steps for transitioning from the legacy network to the new infrastructure.

Conduct thorough testing and validation of the new network before the switchover. Plan for minimal disruption to store operations during the migration process.

Roll out a proof of concept (POC) at a limited number of stores to validate the effectiveness of the network design.

Measure the performance, reliability, and security of the new infrastructure in real-world scenarios.

Gather feedback and insights from store staff and IT teams to refine the design before full-scale implementation.

Implement network monitoring tools to proactively identify and troubleshoot network issues.

Utilize network management systems to centralize network configuration, monitoring, and reporting.

Ensure real-time visibility into network performance, availability, and security events.

Adhere to industry-specific regulations such as PCI DSS, GDPR, and HIPAA, based on the retail chain’s operations.

Design the network to meet compliance requirements and implement appropriate security controls.

Maintain audit trails, access controls, and security documentation to demonstrate compliance.

Provide training sessions to educate retail staff on the new network infrastructure and its benefits.

Offer guidance on network usage, security best practices, and troubleshooting common issues.

Ensure that staff members understand how to utilize new applications and tools enabled by the upgraded network.

In-House Vs Managed Services Providers for Network Modernization

Can retailers and restaurant brands choose to implement complex network modernization projects internally or should they choose to work with managed service providers? While there will always be opportunities for in-house network transformation projects, most Businesses are choosing to partner with managed network services vendors. According to Gartner, “Enterprises struggling to balance expense reduction with greater WAN and LAN agility and performance are increasingly turning to managed network services.” Also, the need to lower capital spending and gain access to specialized skillsets needed for digital transformation make managed network services vendors a compelling option to consider. Here are some additional insights on what’s driving retailers to hire managed network services vendors.

The demand for diverse network management skill sets and the ability to hire and retain employees with specialized network engineering skills can be a tough challenge for enterprises who would rather spend the time and money to strengthen core business operations and build products or services.

For example, a medium-sized retail chain or a restaurant chain looking to design and roll out an SD-WAN solution will probably need highly skilled network engineering talent during the initial design and roll-out phase. Once the solution is stable, the IT organization’s focus will be on ongoing maintenance and periodic updates.

Network technologies are increasingly becoming complex and involve integrating solution components from a diverse set of hardware, software, and bandwidth providers. Implementing a sophisticated network connectivity backbone for optimal business application performance will involve a mix of third-party vendors and OEMs specializing in different aspects of the solution. Troubleshooting performance issues with a POS machine at any location can involve packet tracing across multiple devices, networks, and the ISP serving the location. Coordinating troubleshooting involving multiple vendor entities can be a significant drain on the internal IT team’s productivity. It can even compromise routine tasks that the IT team is primarily responsible for due to lack of time.

Retail and restaurant chains manage hundreds of geographically dispersed locations or branches. Relying just on internal capabilities and skill sets to manage IT/network operations is not practical for a multi-location enterprise. It’s not feasible for internal network engineers to travel across states or international borders to set up or troubleshoot network issues at branch locations.

In addition to managing a complex security environment, enterprises have to also comply with various data management regulations that are directly related to how secure and compliant the underlying network is. Compliance regulations such as PCI and SOX impose a significant burden on retail IT teams that are focused on complex network modernization challenges. Most retailers face significant cybersecurity challenges as they embrace the cloud and grapple with a combination of lower-than-average staff focused on security operations and inventive cybersecurity attacks that target POS and loyalty management systems.

The urgent need to transform business operations is felt a lot more in consumer-facing industries such as retail. In most cases, investments and upgrades in network technologies cannot be handled in-house due to the lack of skills or tools needed for such complex projects across multiple locations. Multi-location enterprises have complex networks that are often difficult to upgrade. Managed network services providers with proven expertise and the backing of the solution providers or hardware vendors are well suited to pilot untested technologies, demonstrating ROI before implementing the solution on a large scale.

For a more in-depth understanding of why businesses should hire a managed network services provider, please read this informative blog post.

Ready to Upgrade Your Network?

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About the author

Bud Homeyer

Chief Operations Officer

Bud Homeyer is the Chief Operations Officer at Interface Systems. Having worked as an IT and security leader for leading consumer-facing brands like Michaels, Brinker, and Bank of America, Homeyer has a proven track record of solving complex enterprise-wide challenges to drive growth, productivity, and profitability. He spearheads Interface’s efforts to help customers embrace new technologies while minimizing risks.

Unmasking Organized Retail Crime: Strategies for Countermeasures

Sean Foley — Sun, 23 Jul 2023 10:50:07 +0000

Sean Foley

Senior Vice President, Customer Success

Tyson Johns

Senior Vice President, Security Monitoring Operations

Business Security

Unmasking Organized Retail Crime: Strategies for Countermeasures

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Organized Retail Crime (ORC) has emerged as a significant threat to the retail industry.

According to the 2022 National Retail Security Survey, there was a 26.5% spike in ORC between 2020 and 2021 and 70% of retailers surveyed believed the threat of ORC had increased during the past five years.

Big-box retailers and large-format grocery stores are especially vulnerable to ORC gangs as most items are unsecured inside the store and the staff cannot be actively manning every corner of the store. Recently, the CEO of Target announced that ORC may contribute as much as $500 million in losses in 2023.

The impact of organized retail crime extends beyond financial losses for retailers.

Organized retail crime poses multi-dimensional threats to retail chains:

Affects consumers through increased prices
Poses safety risk due to stolen and tampered goods
Imposes additional strain on an already stretched law enforcement
Undermines the overall security and customer experience

The absence of comprehensive federal legislation specifically targeting ORC, the high cost of deploying loss prevention teams specifically to target ORC gangs, combined with the decriminalization of low-level offenses in certain states, has created an environment where the benefits of engaging in such criminal activities far outweigh the risks.

This blog post explores the factors contributing to the surge in ORC and proposes effective countermeasures to mitigate this escalating problem.

What is ORC?

ORC refers to coordinated and premeditated criminal activities specifically targeted at retail establishments. ORC involves professional criminals or organized groups that engage in theft, fraud, or other illegal activities within the retail sector. Unlike individual shoplifting incidents, ORC typically operates on a larger scale, targeting multiple retail stores or chains.

ORC groups employ various tactics to carry out their criminal operations. These can include organized theft of merchandise, return fraud, gift card or loyalty points scams, cargo theft, counterfeiting, identity theft, and other similar activities. The stolen goods are then sold through various channels such as online marketplaces, pawn shops, or underground networks.

What distinguishes organized retail crime from individual acts of theft is the level of organization and sophistication involved. ORC groups often exhibit centralized coordination, with members specializing in specific roles within a structured hierarchy. This division of labor allows them to efficiently carry out thefts, distribute stolen goods, and launder the proceeds.

Pawn shop operator in Missouri pleads guilty to $3 million scheme to sell over 100,000 stolen items online

The former operator of a Kansas City, Missouri pawn shop pleaded guilty in federal court to engaging in a $3 million scheme to fence more than 100,000 stolen items and sell them on eBay.

Stolen property worth 'hundreds of thousands' seized in bust of Las Vegas fencing operation

Investigators in Las Vegas seized "enough stolen property to fill a 30-foot moving truck" in a recent bust of a suspected fencing operation, by the Las Vegas Metropolitan Police Department.

3 men arrested in fencing operation

LVMPD Organized Retail Crime Section and Homeland Security Investigators conducted a search warrant where they located and recovered hundreds of thousands of dollars in stolen property.

SFPD seize $200,000 in stolen retail items as part of fencing-operation bust

Police in San Francisco announced an arrest and the seizure of nearly $200,000 worth of stolen over-the-counter medication and personal care products.

Over $1M in merchandise recovered after retail theft operation in Oakland

Over $1 million worth of merchandise was recovered after authorities deemed it was connected to a retail theft operation in Oakland, the Dublin Police Department said on Twitter. A theft worth $1,500 was reported at an Ulta Beauty store in Dublin, which led to a search warrant for a fence operation* in Oakland.

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ORC - Operating Model & Gang Roles

ORC gangs have well-defined organizational structures with specialized roles and responsibilities.

The source of stolen goods touches every node in the retail supply chain:

Internal theft or pilferage from warehouses
Cargo theft from distribution or delivery companies
Online fraud such as identity theft
Counterfeiting
Flash mobs and gangs to target retail stores
Thieves that target e-commerce deliveries at consumer residences
Internal theft in collusion with store employees

In order to pull off a profitable ORC operation, a typical ORC gang has a clearly defined set of roles and responsibilities.

Ringleaders

ORC Ringleaders orchestrate and lead criminal activities. They recruit and organize networks of thieves to carry out these activities, coordinate operations, select targets, and devise tactics to evade store security measures. They identify new targets and establish connections with fences or illicit markets for profit. Ringleaders also plan long-term strategies and devise the modus operandi to capitalize on security vulnerabilities.

Boosters

Boosters actively engage in stealing merchandise from retail establishments. They work under the direction of ringleaders, carrying out thefts and other illegal activities. Their primary role is to physically steal merchandise and provide it to the ringleaders, cleaners, or fences for further distribution or sale.

Fences

Fences purchase stolen merchandise from criminals or work as a part of ORC gangs to facilitate the sale of stolen goods via online platforms, underground networks, flea markets, pawn shops, or even direct sales to consumers who may or may not know the origin of the items.

Cleaners

Cleaners remove or alter identifying marks or security measures from stolen merchandise. Their role is to “clean” the stolen goods, making them more difficult to trace back to their original source or retailer. They do this by removing security tags, altering serial numbers or labels, repackaging items, or modifying appearance to make the stolen merchandise appear legitimate.

Money launderers

Money launderers disguise the illicit origins of funds obtained through ORC operations. They employ various methods to legitimize the illegally gained proceeds. These include cash smuggling, breaking down significant sums of cash into smaller deposits (aka “smurfing”), routing money through shell companies, invoice manipulation, or using cryptocurrencies.

What’s Driving ORC?

There are three primary factors fuelling the growth of ORC gangs in the US, namely the low risk involved in orchestrating the crime, the absence of data and legislation, and loss prevention gaps in retail chains.

Low-Risk, High-Reward Crime

“Organized retail crime is more than petty shoplifting, and the economic impact has become alarming. Professional thieves and organized criminal rings are building a business model by stealing and reselling products, increasingly online through marketplace platforms like Amazon or Facebook.”

Michael Hanson, Senior Executive Vice President of Public Affairs for the Retail Industry Leaders Association

Where there is demand, there is a “business” opportunity.

In late 2022, Roni Rubinov, an ORC gang leader operating a pawn shop in New York was caught with nearly $4 million in stolen goods from CVS and Sephora. Police in San Francisco shut down a fencing operation that made over $500K per year for the criminal involved in selling stolen over-the-counter medications and personal care products.

According to a report published by ACAMS and Homeland Security Investigations, ORC gangs cater to consumer demand for deeply discounted products across a wide range of categories using online marketplaces.

The table below from a joint report published by NRF and K2 Integrity shows the top products that are likely stolen available on Craigslist and Facebook.

While there is definitely money to be made by ORC gangs, states have begun raising the threshold for felony thefts making smash-and-grab-type crimes less risky for the perpetrators.

That’s not all.

Law enforcement and state governments grappling with overcrowded prisons and budgetary cuts are taking steps to reduce intake into prisons.

According to a recent National Retail Security Survey, “the majority (70.8%) of respondents reported either a moderate increase (36.6%) or substantial increase (34.2%) in ORC case values in areas that increased felony thresholds.”

The same report also mentions that 54.6% of survey respondents reported an increase in repeat offending associated with pretrial detention and cash bail reforms.

Lack of Data and Fledgling Legislative Initiatives

One of the key reasons behind the rise of ORC is the absence of comprehensive federal legislation explicitly targeting this type of crime. Most law enforcement agencies across states do not track ORC separately. ORC crimes are clubbed with burglary, shoplifting, and theft. While there is a growing realization about the seriousness of ORC, this issue hasn’t received the attention it deserves from legislators and law enforcement yet.

Here is how the NRF summarizes the problem:

“There are significant deficiencies in the availability of consistent and consolidated data regarding ORC. The fragmentary and disorganized state of data on ORC across national, state, and local authorities, and the lack of standard centralized information on ORC from the retail industry, present difficulties in building a nuanced understanding of ORC’s national and regional prevalence, and operational trends.

The lack of quality data has stymied efforts to raise public awareness about the scale and consequences of ORC, according to a former law enforcement official, who noted that ORC presents an intelligence problem for law enforcement authorities and retailers.”

However, there seems to be a growing realization among state government and law enforcement about the ripple effects of ORC if left unchecked. Thirty-two states including states like California, Florida, Texas, and Pennsylvania that account for a big chunk of ORC and retail theft have either passed ORC legislation or are in the process of enacting one.

The Combating Organized Retail Crime Act of 2023 proposes to establish a coordinated multi-agency response to tackle organized retail theft.

“Stores throughout American communities have not been spared from a national crime wave. These organized theft rings have been developing new tactics to pilfer goods, causing economic harm to American businesses and putting consumers at risk while funding transnational criminal organizations throughout the world. These criminals are exploiting the internet and online marketplaces to stay one step ahead of the law, and it’s time the law catches up. This bill improves our federal response to organized retail crime and establishes new tools to recover goods and illicit proceeds, and deter future attacks on American retailers”.

Senator Chuck Grassley

However, initiatives like these are offset by legislative setbacks. For example, a proposal to fix the loopholes in Prop 47 that raised the felony threshold in California for theft to $950 was scuttled in 2022 and never saw the light of day. In some states, the felony threshold is much higher. For example, in Texas criminals can get away with misdemeanor charges if the value of the stolen items is less than $2500.

To curb the brazen sale of stolen goods on online marketplaces, the US government passed the INFORM (The Integrity, Notification, and Fairness in Online Market Retail Marketplaces for Consumers) Act as part of the Consolidated Appropriations Act in December 2022. The new law requires high-volume, third-party sellers on online marketplaces like Amazon and eBay to submit mandatory information such as bank account numbers, government-issued identification, and contact information. In addition, online marketplaces must publish the seller’s business name, physical address, and contact information for the consumer’s benefit and offer consumers a means to flag suspicious sellers online.

However, initiatives like the INFORM Act are easy to circumvent. A vast majority of fencing operations involve using a legitimate business or a store. Organized gangs function like any other business and have the capability to overcome regulatory hurdles.

Retail Loss Prevention Gaps

By themselves, retailers cannot stamp out ORC as the issue is driven by socio-economic upheavals, legal issues, law enforcement constraints, and other challenges that retailers don’t control. However, there are several resource and technical constraints within retail organizations that create opportunities for criminals to continue their nefarious activities with impunity.

According to the 2022 Retail Security Survey, over 43% of retailers surveyed increased their loss prevention budget to spend on capital equipment. This data also highlights an important issue that loss prevention teams face, i.e. a chronic lack of high-quality security infrastructure.

Some of these gaps include:

Legacy Security Cameras: Outdated or malfunctioning surveillance cameras that may not capture clear images or provide adequate coverage. Poor video quality can make it difficult to identify shoplifters or monitor employee behavior effectively.
Insufficient Camera Coverage: Camera placement can result in blind spots or limited coverage making investigations challenging. Also, camera placement or its capabilities may not keep pace with store layout changes or redesign over a period of time.
Cumbersome Video Sharing: In the absence of a centralized video management system, accessing video footage and sharing video evidence with internal stakeholders or law enforcement becomes a challenging and time-consuming process.
Outdated Alarms: Ineffective alarm systems due to delayed maintenance cycles or outdated technologies can hurt retailers. Too many alarm vendors and non-standard alarm management protocols can result in improper alarm maintenance and difficulty for employees to keep up with diverse alarm management protocols.
Lack of Sensor Integration: Loss prevention teams often use multiple security systems, such as CCTV cameras, alarms, access control systems, and electronic article surveillance (EAS) tags. Important alerts or suspicious activities can go unnoticed if these systems are not integrated or monitored effectively.
Inability to Keep Up With Business Changes: COVID forced major changes to the way retailers operate. Some of the most notable shifts were a massive growth in e-commerce, BOPIS (Buy Online and Pickup in Store), and curbside services. Loss prevention teams are now stretched thin as they have to secure the stores beyond their four walls and create the technical infrastructure to tackle cybersecurity and online fraud as well.

ORC gangs not only target stores, but they also pick out security vulnerabilities in the entire supply chain right from the port. This places a significant burden on loss prevention teams as they are responsible for securing every critical point in the supply chain that’s controlled by the retailer. These include warehouses, distribution centers, and shipments to stores.

As retailers brace to fight back against ORC, their focus should be on preventing crime before it happens by implementing early detection capabilities, rolling out advanced surveillance capabilities, securing high-value merchandise, and training employees to handle external theft. All of these efforts should be backed by information sharing between retailers, field investigations, and coordination with law enforcement. A daunting challenge indeed.

Is ORC a Victimless Crime?

No, organized retail crime (ORC) is not a victimless crime. ORC involves theft, fraud, and illegal activities targeting retailers and their customers, resulting in significant financial losses and potential harm. While the immediate victims may be the retailers who suffer from stolen merchandise, increased costs, and disrupted operations, there are broader impacts as well.

ORC can lead to higher prices for consumers as retailers attempt to recover their losses, potentially affecting individuals and communities with limited financial resources. Additionally, ORC can create an unsafe environment for employees and customers, as criminals engaged in these activities may resort to violence or other criminal acts to achieve their objectives. Furthermore, the profits generated from organized retail crime can be used to fund other illegal activities, posing risks to society as a whole.

How Retailers Can Tackle ORC

The 2022 Retail Security Survey found that a majority of retailers surveyed (68.5%) did not have an ORC investigation team. Without investigations and intelligence sharing with law enforcement, it is impossible to pin a crime on an ORC gang. The only way forward for retailers would be to eventually invest in building an ORC investigation unit.

So how should a retailer go about setting up an ORC investigation unit?

Review ORC Capabilities to Address Gaps

The most important requirement for setting up an ORC investigative unit will be a clear management mandate and budgetary support to make it happen.

Assuming there is a consensus to get the ball rolling, the first step in setting up an ORC investigative unit is to evaluate the current capabilities of the loss prevention and asset protection teams.

Key factors to consider during the evaluation include:

Availability of investigative talent that can be nurtured to spearhead the ORC investigation team.
Historical data on theft and crime, results of past investigations by law enforcement, details of the perpetrators, and possible patterns or correlations.
Availability of training material and a policy to encourage employees to get certified.
Availability of technology platforms needed to access security events, conduct OSINT (Open Source Investigations), and share data internally and with law enforcement to coordinate apprehension and recovery.

Train the ORC Investigation Team

Loss prevention teams are trained to operate within the four walls of the store and apprehend a criminal before they leave the store. However, ORC investigations require a completely new set of investigative skills and an ability to operate outside the store. That’s why a multi-dimensional training program is needed to equip the ORC investigation teams with the skills they need to succeed.

The scope of the training program can include:

Investigative Techniques and Tools: Conducting online investigations, utilizing open-source intelligence (OSINT) tools and techniques, field surveillance techniques, gathering and analyzing digital evidence
Identifying and Documenting ORC Crimes: Recognizing common ORC methods and patterns, identifying and documenting stolen merchandise, analyzing financial transactions and patterns, creating effective case reports and documentation
Collaboration and Information Sharing: Building relationships with law enforcement agencies, establishing partnerships with other retailers, sharing information and best practices within the team and industry
Coordinating with Law Enforcement: Understanding law enforcement procedures and protocols, presenting evidence, and working towards successful prosecutions
Understanding Legal Matters: Overview of relevant laws and regulations related to ORC, legal procedures for conducting investigations, privacy considerations
Physical Security and Loss Prevention: Store layout and security considerations, effective use of CCTV cameras and other security measures, strategies for preventing and deterring ORC activities
Crisis Management and Response: Developing an emergency response plan, handling high-risk situations and incidents, and coordinating with internal and external stakeholders during crises

What Are the Roles & Responsibilities of an ORC Investigator?

Initiate, conduct, and manage ORC investigations, utilizing field tactics and surveillance techniques to gather intelligence and determine the scope of the investigation.

Utilize data analysis tools and exception reporting to identify potential ORC theft and fraud issues impacting company assets.

Collaborate with the ORC Analyst to review POS and non-POS exception reports for identifying and linking organized retail crime activities.

Prepare detailed investigative plans and maintain accurate documentation of investigations in the case management system.

Work closely with law enforcement agencies, providing intelligence and evidence to support successful prosecutions.

Develop and maintain positive relationships with internal teams, including AP, supply chain, and e-commerce, to coordinate investigations and drive theft and fraud elimination efforts.

Represent the company at conferences, ORC meetings, and other industry events.

Stay updated on nationwide ORC patterns and trends, bringing insights to the team and implementing relevant training and programs.

Collaborate with state, local, and federal law enforcement agencies, participating in interviews, search warrants, and surveillance operations.

Engage with local and state government entities, retailers, and industry organizations to advocate for and support ORC legislation.

Implement Technologies and Tools

Utilizing robust processes and cutting-edge technologies can significantly enhance your ability to detect, prevent, and respond to ORC incidents. Some of the critical tools or infrastructure needed to accelerate ORC investigations and successfully recover stolen goods include:

Video Surveillance Systems: Implement a high-quality video surveillance system at your retail locations, distribution centers, or warehouses to capture evidence of ORC activities. This can include IP cameras, video analytics software, and centralized monitoring stations.
Case Management System: Case management systems can be used to track and manage investigations, store case-related documents and evidence, and facilitate collaboration among team members. Vendors include Agilence and ThinkLP.
Digital Forensics Tools: Invest in digital forensics software and hardware tools that extract, analyze, and preserve digital evidence from various sources, such as computers, smartphones, and surveillance systems. Vendors include Cellebrite and Magnet Forensics.
Open-Source Intelligence (OSINT) Tools: OSINT tools enable your investigators to gather information from publicly available sources online. Examples include social media monitoring tools, web scraping tools, and online database search platforms. Vendors include Flashpoint and LifeRaft.
RFID Solutions: Upgrade RFID for Electronic Article Surveillance (EAS) to add Electronic Product Code (EPC) capabilities along with video integration to not only track the product but also capture the faces of people who may be conducting a smash-and-grab job. With EPC capabilities, any fencing investigation on the field can be expedited with handheld EPC RFID tag readers.
Data Analytics and Pattern Recognition Tools: Utilize data analytics tools to identify patterns, trends, and anomalies in sales data, financial transactions, and inventory management. These tools can help detect potential ORC activities and provide insights for investigations. For example, POS exception reporting solution from Interface can detect anomalies in sales data.

Collaborate & Share Information

To effectively combat ORC, retailers must establish partnerships with industry associations, law enforcement agencies, and other relevant stakeholders. Collaboration facilitates the exchange of intelligence, best practices, and emerging trends, enabling a proactive response to the evolving nature of ORC.

ORC Databases: Retailers can work together to create ORC databases that track known offenders, stolen merchandise descriptions, and patterns of criminal activity. Sharing this information among retailers helps identify trends, patterns, and individuals involved in ORC, allowing for better prevention and faster response. Industry associations can play a crucial role in facilitating such information-sharing platforms and fostering collaboration among retailers.

Partnership with Law Enforcement:Close collaboration with law enforcement agencies is vital. Retailers can establish direct lines of communication with local police departments and establish a protocol for reporting ORC incidents promptly. By sharing surveillance footage, suspect descriptions, and other relevant evidence, retailers can assist law enforcement in their investigations and increase the likelihood of arrests and successful prosecutions.

Training Store Associates: Education and awareness play a pivotal role in preventing ORC incidents. Retail employees should receive comprehensive training on recognizing ORC indicators, understanding theft patterns, and implementing effective prevention techniques. Training programs should include topics such as identifying common ORC tactics, customer engagement strategies, and the importance of accurate documentation and reporting. By equipping employees with the necessary knowledge and skills, retailers empower their staff to play an active role in preventing ORC incidents and protecting the business.

Workshops: Additionally, retailers can conduct regular workshops and seminars involving law enforcement experts and loss prevention specialists. These sessions can provide updates on the latest ORC trends, best practices in security measures, and insights into the modus operandi of organized retail crime groups.

List of Anti-ORC Associations in the US

Buy Safe America Coalition

List of 48 state associations working to fight ORC

Minnesota Organized Retail Crime Association

National Anti-Organized Retail Crime Association

National Retail Federation

RC Investogator’s Network

Retail Industry Leader’s Association

Proactive Security Measures to Combat ORC

Stopping an ORC theft before it happens and ensuring sufficient evidence is recorded when it happens can dramatically improve a retailer’s ability to minimize the negative impact of ORC

AI-Enabled Cameras

AI-enabled cameras can detect suspicious behaviors, such as unusual movements, repeated visits to high-value merchandise areas, or sudden large group gatherings. This real-time monitoring can also be designed to trigger alerts when suspicious behaviors are detected enabling onsite or remote security teams to take steps to minimize loss and keep customers away from harm’s way.

License Plate Recognition

In addition to AI-enabled cameras, Automatic License Plate Readers (ALPR) can be installed in parking lots and entrances to track vehicles and flag those associated with past ORC activities. These systems capture license plate information and compare it against a database of known offenders, alerting security personnel when a vehicle of interest is detected.

Facial Recognition

Facial recognition software can be employed to aid in the identification of known perpetrators. By comparing captured facial images against databases of known criminals or shoplifters. Security personnel can quickly identify individuals involved in ORC activities and notify law enforcement. Some states have placed restrictions on facial recognition but the tide is turning. States like New Orleans and Virginia have reversed the ban on the use of facial recognition for tracking criminal activity.

Autonomous and Automated Voice-Down

Automated voice-down (AVDs) announcements can convey a constant security presence, increasing the perceived risk for “boosters” (ORC street-level thieves). AVDs can be designed to function autonomously by leveraging AI-enabled cameras that can detect the presence of people or vehicles with 99.99% reliability.

These announcements can include messages like “Attention, shoplifters will be prosecuted to the fullest extent of the law” or “This store is equipped with advanced surveillance systems.

Think twice before committing a crime.” AVDs can be integrated with strobes, lights, access control systems, alarm systems, and remote command centers to trigger proactive security measures or alert staff and remote security professionals monitoring the site.

Interactive Monitoring

Interactive remote monitoring that leverages cameras, microphones, and speakers allows virtual security professionals operating from remote command centers to conduct virtual walkthroughs, evict loiterers, issue voice-downs to warn people who may be acting suspiciously, and interact with store employees directly as needed. This model offers discreet security coverage and an upgraded “eye on the sky” that can not only see but also interact in real-time.

To further enhance security, retailers can implement measures such as improved lighting in parking lots, clear signage indicating active surveillance, and store design that’s free of hidden sections or aisles. These visible security measures not only act as a deterrent but also provide reassurance to customers, creating a safer shopping environment.

Take the Fight to ORC Gangs

Interface’s virtual security guard, intelligent voice-downs, and personal protection monitoring solutions can level up store security to fight the bad guys.

Get a Free Consultation

There Is No Right Way to Combat ORC

While the broad approach that most retailers take to combat ORC involves setting up specialized investigations teams, some retailers have taken a different path.

Victoria’s Secret never set up a separate team to spearhead ORC investigations and instead trained its asset protection (AP) associates at all locations to tackle ORC crimes. This approach eliminates potential coordination issues between ORC teams and AP teams, an opportunity for AP team members to develop their skills, and a tighter relationship with local law enforcement.

While retailers may choose distinctly different approaches to take on ORC, there is now an overwhelming realization that ORC poses a significant threat to the retail industry, affecting businesses, consumers, and communities at large. By understanding the factors contributing to the rise of ORC, adopting proactive security strategies, and collaborating with industry leaders and law enforcement, retailers can mitigate the impact of this criminal activity.

About the authors

Sean Foley

Chief Revenue Officer

Sean Foley is the Senior Vice President for Interface Security Systems, LLC.  With Interface since 2012, Sean has worked with large, distributed enterprises, particularly in the retail, casual dining and quick service restaurant markets on implementing next generation security strategies.  Mr. Foley is a leading subject matter expert in asset protection technologies and a resource to loss prevention teams for some of the most recognizable brands in the U.S.

Bud Homeyer

Chief Operations Officer

For the past 22 years, Tyson Johns has led the growth and development of Interface’s premiere interactive monitoring services that secure and protect America’s top retail and restaurant brands. Johns oversees the two Interface Security Monitoting Centers in St. Louis, MO and Dalals, TX. Johns is a security industry thought leader and brings deep expertise in intervention techniques, situation analysis, crisis intervention, operational leadership and central station management.

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Customer Experience

Workforce Experience

Supply Chain Optimization

Digital Transformation Projects Can Create Security Vulnerabilities

Retailers’ data lakes are attractive targets, often combining detailed identity and demographic data with credit card information.

8%

percent of consumers are confident that retailers will be able to navigate the challenges of a data breach

Retailers are apparently more likely to pay off ransomware attackers. Of those that experienced such an attack, 51% paid the ransom directly (versus 37% of their peers in other industries).

Retailers surveyed tend to have smaller SOCs than their peers

4 Four basic security policies are needed for today's enterprise

14% of organizations complied with all four requirements in 2018

Only 9% of organizations complied with all four requirements in 2021

Retail Cybersecurity Threats Targets , Actors & Implications

Targets

84%

attacks include one of the following –
System Intrusion, Social Engineering, Basic Web Application attacks

Threat actors

87%

External actors

13%

Internal actors

Data lost

45%

Credentials

27%

Personal

25%

Other

25%

Payment

Data compromised

45%

Credentials

27%

Personal

25%

Other

25%

Payment

Retail Cybersecurity Threats Targets , Actors & Implications

Retailers are betting big on enabling employees to work from anywhere. Convenience is now offered in the form of:

BYOPC (Bring Your Own PC)
BYOD (Bring Your Own Device)
CYOD (Choose Your Own Device)
COPE (Company Owned Personally Enabled)
COBO (Company Owned Business Only)

The top compromised asset varieties were

40%

respondents said mobile devices are their company’s biggest IT security threat

31%

respondents agreed that mobile device threats were growing faster than other threats.

How Can Retailers Secure Mobile Devices?

Cybercriminals Are Checking Out POS

Cybercriminals Are Checking Out POS Retail chains face a variety of security challenges, from connected POS systems and devices to online ordering and delivery applications. Self checkout solutions in the Retail Environments setting could generate $430 billion to $520 billion in economic value in 2030.

Adoption of self checkout use cases is expected to increase from a relatively low 15 to 35 percent of organized retail today to 80 to 90 percent in 2030.

In store purchases are vulnerable to fraudulent purchases according to 49.3% of retailers. Multichannel purchases (bought online and picked up in store) are vulnerable to fraudulent activities according to 18.8% of retailers. (NRF, 2020)

POS applications are directly connected to credit card data, loyalty management applications, and inventory management systems. They are easily accessible to anyone and retailers struggle to manage the sheer number of in store terminals, self service kiosks, mobile payment devices, and phone based payments directly from customers.

Scamsters rely on shimming and man in the middle (MITM) attacks to impersonate EMV credit cards at the POS.

In 2019, an employee clicked on a malicious link in a phishing email and downloaded a Remote Access Trojan. The attackers used the Trojan to move laterally into the merchant's PoS environment where they deployed a RAM memory scraper for harvesting payment card data.

Data Breaches are Expensive

$ 3.28 M

is retail industry’s average cost of a data breach (IBM Cost of Data Breach Report, 2022)

How Can Retailers Secure POS?

Encrypt all POS data end to end
Implement EMV and NFC technologies
Whitelist applications to run on a POS system
Keep your POS software up to date
Segment the POS network
Address PCI DSS compliance gaps proactively
Physically secure POS devices including mobile POS devices
Watch out for unusual transactions
Integrate security camera with POS transactions

Cyberattacks on the Cloud

50% of retailers surveyed have a cloud first policy for new applications compared to 38% of organizations across other verticals.

Cloud misconfiguration accounted for 15% of the breaches and costs the company $4.14 million on average.

Malware targeting Linux environments rose dramatically in 2021—a surge possibly correlated to more organizations moving into cloud based environments, many of which rely on Linux for their operations.

Cloud Security Maturity

Sky High Cost of Cloud Security Breaches

How Can Retailers Secure the Cloud?

Loyalty Programs and Gift Cards

22%

consumers shop exclusively with retailers to take advantage of loyalty programs.

$140 billion

Estimated value of loyalty points in the US

$100 billion

Estimated value of rewards that go unclaimed

$ 259B by 2026

The gift card market in the US will increase from US$172 billion in 2021 to reach US$259 billion by 2026.

5X

number of gift card cyberattacks when compared to other targets

Impact of Loyalty and Gift Card Fraud

01

Estimated value of rewards fraudulently redeemed each year $1 billion

02

The FTC estimates an based on 64,000 consumer complaints that amount to a collective loss of $233 million.

03

Any data breach involving loyalty management applications could potentially attract regulatory fines under the provisions of the California Consumer Privacy Act (CCPA) and GDPR

Loyalty account takeover fraud is a ticking timebomb. According to Forter, As fraudsters accrue more account data during this period, merchants should remain vigilant. Fraudsters are breaching accounts and stealing personal data, using this time to age the accounts they steal. They are taking the time to build the account’s reputation, making it more difficult for rules based systems or manual review teams to detect a hacked account from a legitimate one.

How Can Retailers Minimize Loyalty and Gift Card Frauds?

Implement a robust data analytics system to flag suspicious transactions.

Enforce password policies and encouragemultifactor authentication.

Limit the personal data needed to enroll in therewards program.

Regulate access to loyalty managementsystems and implement a zero trust securityframework.

Accelerate Retail Digital Transformation with Interface

Interfaces managed network services can help retail chains proactively address cybersecurity threats and accelerate digital transformation. Interface handles design, implementation, and maintenance for all services. With Interface, retail chains can improve security, eliminate operational complexity and focus on innovation.

Retail Network-Technology in a-Box

PCI-compliant LAN, WAN, Firewall, SD WAN, and VoIP in one standardized package

Managed SD WAN

Turnkey network-as a service to deliver network security and optimal performance

Managed SASE

Unified ZTNA, FWaaS, SWG & SD-WAN solution

PCI Compliance

Interface simplifies PCI compliance for businesses

Schedule a Free Consultation

1. https://www.bdo.com/BDO/media/Report-PDFs/Digital%20Transformation/2021 Retail Digital-Transformation-Survey_Web.pdf

2. https://www.mckinsey.com/business functions/mckinsey-digital/our insights/iot value set to accelerate through 2030 where and how to capture it

3.Verizon Mobile Security Index 2021

4.Fiserv

5. https://www.splunk.com/en_us/form/state of security/thanks.html

6. https://www.splunk.com/en_us/form/state of security/thanks.html

7.2022 Verizon Data Breach Investigations Report

8. https://www.verizon.com/business/resources/reports/mobile security-index/

9. https://www.mckinsey.com/business functions/mckinsey-digital/our insights/iot value set to accelerate through 2030 where and how to capture it

10. https://www.akamai.com/blog/security/understanding point of sale security

11. https://www.darkreading.com/attacks breaches/visa warns of targeted pos attacks on gas station merchants

12. https://www.experian.com/blogs/ask-experian/what is an emv chip/

13. https://www.splunk.com/en_us/form/state of security/thanks.html

14. https://www.ibm.com/security/data breach/threat intelligence/

15.IBM Cost of Data Breach Report 2022

16. https://www.globenewswire.com/en/news release/2022/03/23/2408637/28124/en/United-States Gift Card and-Incentive Card-Market Report 2022
Market is-Expected to Grow by-9 5 to Reach 188 832 7 Million in 2022 Forecast to 2026.html

17. https://www.forter.com/blog/loyalty-program protection/

About the author

Steve Womer

SVP, Engineering

Steve has a passion for simplifying the complex. He has been designing and supporting secure network infrastructure solutions for distributed enterprise brands for the past 17 years. His current mission at Interface Security Systems is to ensure customer solutions are built with the highest levels of security and performance with an overarching theme of standardization and scalability. 

7 Groundbreaking Drive-Thru Concepts and Trends for QSRs in 2024

Steve Womer — Mon, 09 Jan 2023 14:43:26 +0000

Steve Womer

SVP, Engineering

Business Intelligence Restaurants Video Analytics

7 Groundbreaking Drive-Thru Concepts and Trends for QSRs in 2024

Introduction

What’s Propelling Restaurant Drive-Thru Innovations?

The first-ever restaurant drive-thru concept was launched way back in 1947. Red’s Giant Hamburg drive-thru allowed customers to drive up to a window to place orders and receive their food. Since then drive-thrus have consistently delivered a significant chunk of the revenue in the QSR (Quick Service Restaurant) category.

COVID-19 has accelerated the need for restaurants to have a comprehensive drive-thru strategy in place and focus on drive-thru innovation. This was primarily driven by:

Heightened anxiety about health and safety
Need for greater convenience and flexibility to order food

By the end of 2021, every major restaurant brand reported significant drive-through sales growth and drive-thru accounted for 52% of the customer traffic share for QSRs.

This trend is not just restricted to QSRs. Even full-service chains, cafes, and pizzerias that have traditionally invested in dine-in spaces are expanding drive-thru options for customers. Recently, Applebees revealed that they are planning to aggressively roll out drive-thrus to strengthen off-premise service capability.

Restaurant brands are now investing in a suite of technology solutions and drive-thru concepts that delivers an amazing customer experience across the customer engagement lifecycle for the drive-thru channel.

Upgraded online and mobile ordering
AI-driven digital menu and order confirmation boards
Bluetooth sensors and mobile apps for personalized drive-thru experience
Diverse mobile and online payment options
Dynamic menu and menu rationalization based on complexity and inventory
Kitchen automation

Gamification to improve employee engagement
Video management systems to access customer interaction videos for training
POS with forced prompts or modifiers to upsell related items or premium toppings
Automated check-in alerts for employees to serve customers with pre-orders

Computervision to track order assembly and packaging
Advanced speakers and microphones with noise suppression technology
Secure identity validation at drive-thru pickup window

In 2024, having a drive-thru is no longer a secondary growth strategy. QSRs that had already bet big on drive-thru services are now accelerating drive-thru automation to tackle one of the biggest challenges to running a profitable restaurant – wage and commodity inflation.

1. Expanded Drive-Thru Lanes

In June 2022, Taco Bell launched the Taco Bell Defy which boasts of four drive-thru lanes, food delivery lifts that eliminate direct contact between customers and employees, and interactive audio-video technology for customer service. Separate drive-thru lanes for app pre-orders, drive-in customers, and third-party delivery agents allow Taco Bell to maximize the speed of service and minimize wait times.

Brands like Panera, McDonald’s, Burger King, and KFC are rolling out updated restaurant designs with increased drive-thru capacity and smaller dine-in areas.

Adding additional lanes is not the only option to increase drive-thru throughput. Tim Hortons has launched tandem drive-thrus that come with two sets of digital menu boards and intercom in a single lane designed to take orders from two cars at a time.

Adding additional drive-thru lanes can be challenging as restaurants have to proactively address points of customer friction, manage traffic volumes, and enable seamless integration with POS systems.

Here is an extract from an article that summarizes the real-world challenges that Schlotzsky’s experienced when they piloted a double-drive-thru, with one drive-thru on each side of the restaurant.

“When you have two menu boards where you’re taking orders at the same time, we really had to figure out how that flows through into our kitchen. And when two menu boards are taking orders at the same time, we had to equip our drive-thru make station with a headset so that they could listen to both the first drive-thru lane and the second drive-thru lane, and start the production of those products before the guests finished ordering.”

“In the early days of launching this double drive-thru, Schlotzsky’s employees had to train customers that were going to the pickup lane because the service counter is now on the passenger side, which is not what customers are used to. The store needed to go back and modify signage and striping on the asphalt to make directional flow clear to customers and improve traffic confusion.”

2. Intelligent Outdoor Digital Menu Boards (ODMBs)

Outdoor digital menu boards play a critical role in helping drive-thru customers make an informed choice of what to order and speed up the drive-thru experience. The latest generation of digital menu boards are connected to the cloud and have the ability to dynamically change the menu and pricing based on diverse input from other restaurant applications.

Some of the recent innovations in personalizing the drive-thru experience include

Digital menu boards linked to mobile apps that rely on the phone’s location data to trigger menu board personalization when the customer drives up to the restaurant location.
Speciality Bluetooth devices integrated with the drive-thru speaker post to trigger menu board personalization, enable the customer to redeem reward points, and make payments using their mobile phone.
Machine learning-driven menu boards not only suggest a personalized menu based on the purchase history, external factors (such as the weather), or daypart, but also optimize the menu to eliminate order processing complexity.

McDonald’s implemented Dynamic Yield’s personalization platform to offer a dynamic menu at their drive-thrus. In the US, McDonald’s is able to show menu items based on factors such as time of day, real-time restaurant traffic information, and popularity to help provide an enhanced customer experience.

Restaurant Brands International, the parent company of QSR brands such as Burger King, Tim Hortons, and Popeyes had already started rolling out personalized ODMBs in 2021 across thousands of locations.

3. Gamification for Drive-Thru Employees

Serving customers at the drive-thru can get monotonous for employees. Critical performance metrics such as average speed of service and order value are reviewed periodically by the manager or supervisor and employees get to hear about it only when they fall short of the productivity benchmarks or for training purposes. Gamification of drive-thru tasks addresses this problem and significantly improves employee participation and engagement.

HME’s ZOOM Nitro’s drive-thru optimization system allows restaurants to gamify drive-thru service for engaging employees.

Source

Here are some of the ways gamification can improve employee engagement and productivity:

Drive-thru leader boards can show where employees stand compared to their colleagues and introduce a positive competitive spirit at work.
Restaurant chains can conduct friendly contests between locations with bragging rights and offer rewards as an upside for top-performing locations.
As critical metrics are now transparent and available for all employees in real-time, employees readily take ownership of performance improvement plans.

I3 International’s drive-thru leaderboards offer real-time performance snapshots of drive-thru employees giving employees and restaurant managers a live drive-thru customer service performance update.

4. Computer Vision and Video Analytics at the Drive-Thru

Video feeds from the cameras in the drive-thru area can be analyzed by computer vision algorithms in real-time to improve sales, improve order accuracy, reduce chargeback claims, flag food safety issues, and track line dropouts before purchase.

Computer vision can read license plates of cars and even identify the age profile of the occupants inside the car. This data is useful to recognize repeat customers and show a personalized menu or offer exclusive perks as the customer pulls into the drive-thru digital menu post.

I3 Internation’s video analytics platform can recognize repeat customers by reading the number plates of cars at the drive-thru. Once a repeat customer is identified, the platform will automatically display relevant information to the employees at the drive-thru to recommend favorite products and offer a personalized guest experience.

Video cameras can identify repeat customers at the drive-thru by reading the registration plates

Source: i3 International

2. Ensuring order accuracy has a direct impact on sales performance and customer loyalty. Computer vision and AI applications connected to cameras in the kitchen can pinpoint mismatches in order assembly before the items are delivered to the customer.

3. In addition to identifying customers, computer vision can track drive-thru line dropout data. This information when mapped to dayparts, locations, weather, and day of the week can uncover valuable insights for QSRs. These insights can help restaurants optimize menu complexity and staffing, or even re-design the drive-thru lanes.

Presto Vision’s software allows restaurants to improve drive-thru sales and delight customers.

Source

4. A Deloitte study has found that customers are willing to pay a premium if they can see evidence of cleanliness and safe food handling practices. Computer vision and AI applications can spot instances when prescribed food preparation and handling processes are not followed so restaurants can train their employees better and ensure complete safety compliance.

5. AI-Based Voice Assistance

Voice is a critical component of the drive-thru customer experience, and hence more QSRs are investing in installing advanced two-way audio communication systems at the drive-thrus that are designed to

Reduce outbound (kitchen noise) and inbound noise (traffic or engine sounds), to improve order accuracy and eliminate delays due to miscommunication or poorly understood order details.
Use automated audio alerts for employees to manage customers at the drive-thru, curbside pickup slots, or 3rd-party delivery pickups.

With AI-enabled voice technology, voice can now go beyond just improving communication. It can potentially reduce the need for employees to handle all the drive-thru transactions. This is especially useful in a tough labor market where staffing and retention are significant challenges confronting QSRs. Here are the various ways AI-enabled voice automation is being used by QSRs and fast-casual restaurants.

Chipotle had already rolled-out Amazon Alexa reordering skill way back in 2019 for Chipotle customers who are already a part of the loyalty program. They later expanded AI-based voice ordering for phone orders as well. With the recent roll-out of dedicated drive-thru pick-up windows (aka Chipotlanes), Chipotle customers who order ahead using voice or app can drive up to the pickup window and drive out in under 12 seconds.
In 2019, McDonald’s acquired Apprente, an AI-based technology that can engage in conversations with humans to improve drive-thru order accuracy. McDonald’s piloted the technology in 2021 at 24 drive-thrus in the Chicago area and reported about an 80% success rate. The technology is being further tested and upgraded with the help of IBM before a system-wide roll-out.
Wendy’s is leveraging Google Cloud to roll out a combination of AI-enabled voice technology along with computer vision that’s designed to take orders at the drive-thrus and send the transcribed order details directly to the kitchen and POS.

Presto claims to offer AI-enabled conversational technology that can only take drive-thru orders but also upsell, recommend items with shorter preparation time, and recommend items based on past orders. The Presto voice solution has diverse applications that go beyond drive-thru. These include inventory management, phone orders, tableside ordering, and staff training.

6. Automated Drive-Thru For App Orders

“McDonald’s is piloting a drive-thru concept that completely eliminates the need to have any customer-facing staff. Customers who choose to dine in, place orders via self-service kiosks, and robots bring the order from the kitchen. For those who want to use the drive-thru, the only option available is by ordering ahead via the app.

When customers order ahead via the McDonald’s app with push notifications enabled and location access turned on, food preparation is timed to the customer’s estimated pick-up time. Once the customer reaches the restaurant, they pull into the order ahead drive-thru lane to pick up their order that’s delivered via conveyor belt.

McDonald’s is piloting an automated order ahead drive-thru lane at one of their Texas locations.

Source: McDonald’s

The concept of ordering ahead and picking up at a special lane at the drive-thru is not a new concept. What’s novel with the McDonald’s location is the absence of customer-facing employees. As hiring for restaurant jobs and retaining employees becomes tougher, and wage inflation going through the roof, a conveyor belt bringing the order directly from the kitchen to the drive-through pickup point could probably become a mainstream solution.

7. Restaurant Robotics & Future Contactless Drive-Thru

The National Restaurant Association (NRA) paints a grim view of the labor shortages that continue to plague the restaurant industry in the US. According to NRA, “Despite the steady employment gains during the last 2 years, eating and drinking places are still 450,000 jobs (or 3.6%) below their pre-pandemic staffing levels. That’s the largest employment deficit among all U.S. industries.” To combat this challenge, some restaurants have already started deploying robots not only for kitchen automation but also for customer service. It’s just a matter of time before drive-thru customers have an entirely contactless experience when kitchen automation and service automation technologies mature.

A new crop of restaurant robot companies have all graduated their products from the design or prototyping phase to deployment at restaurants.

Robotic Arms – Ally, Nala, Miso
Bartender Robots – Makr Shakr, Cecilia.ai
Bowls and Salad Maker Robots – Chowbotics, Spice, Beastro, Autec
Food Delivery Robots – Starship, Neuro, Kiwibot
Robot Waiters – Bellabot, Matradee, Servirobot
Pizza Robots – Picnic, Piestro, Zume
Coffee Shops – Cafex, Rozum, Artly, CookRight

Prominent restaurant brands are piloting robots or have already deployed them in the first set of locations.

Sweetgreen launched its Infinite Kitchen technology at its Naperville, Illinois restaurant which leverages automation to dispense greens and other ingredients precisely in bowls moving along in an assembly line.

Other established restaurant brands such as Chipotle, White Castle, and Wing Zone have all deployed Flippy, a kitchen robot that automates fast food preparation.

New restaurant brands are launching in 2024 that have embraced an automation-first strategy. For example, Steve Ells, the former CEO of Chipotle is launching a new chain named “Kernel” in the New York area in 2024. Every location will have just 3 employees supported by robots.

We expect these technologies to find a way to the drive-thru in late 2024 or in 2025 as the technology is perfected and real-world ROI is established.

Groundwork Needed for Drive-Thru Innovation

There are some critical issues in the QSR industry that can potentially derail new drive-thru initiatives. Interface recommends restaurant brands to carefully consider some of these challenges proactively before expanding drive-thru operations.

1. Network Capacity

Designing the physical space and logistics of managing the traffic often takes center stage in drive-thru design while the network side of the solution may take a backseat. Network design and capacity to support mobile POS transactions, sophisticated IP cameras with edge computing capabilities, intelligent ODMBs, order confirmation systems, and perimeter security sensors (such as alarm systems) play a critical role in the successful implementation of cutting-edge drive-thru concepts.

2. Network Security

Personalized drive-thru experiences are enabled only when customers share personal data and convenience is possible only when diverse payment options are supported. As a result, drive-thru concepts have opened up a world of network security vulnerabilities that need to be addressed upfront.

3. Accidents and Claims

Even successful drive-thru concepts have a problem – too many drive-thru customers and spill-over vehicle queues that potentially disrupt neighboring businesses or cause ‘drive-thru rage’. Collisions, liability claims, and employee injury (especially when walking up to cars in the drive-thru lane as done by some QSRs like Chick-fil-A) are potential issues to watch for.

4. Backend Bottlenecks

Considering the success of a drive-thru implementation is contingent on the speed of service and order accuracy, getting the kitchen operations right is an absolute necessity. Integrated kitchen display systems that are connected to the POS and inventory management system can help QSRs handle the increased order volume reliably.

5. Operational Complexity

According to the Franchising Economic Outlook report, the US will have about 192,000 franchise QSR establishments by the end of 2022. While the franchising model offers a proven brand and template for growth, key network and security infrastructure are managed by the franchise owners. This creates operational complexity as standards of implementation and solutions may vary across the chain which imposes barriers to innovation.

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About the author

Steve Womer

SVP, Engineering

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6 Game-Changing Retail Technology Trends in 2024

Bud Homeyer — Sun, 08 Jan 2023 18:04:49 +0000

Bud Homeyer

Chief Operations Officer

Business Intelligence Retail Video Analytics

6 Game-Changing Retail Technology Trends in 2024

Digital Transformation in the Retail Industry

Introduction

The retail industry has already undergone significant transformation in the last decade as prominent retail brands invested heavily in digital transformation underpinned by cloud computing advances and widespread acceptance of e-commerce.

The pandemic in 2020 and the subsequent reopening of the economy have further accelerated changes driven by changing customer expectations and non-traditional demands of Millenials and Gen Z customers. Retailers have no option, but to continue investing in new technologies and stay ahead of the curve.

We look at six emerging yet important retail technology trends that retailers should evaluate in 2023.

1. Contactless Stores

What are contactless stores

Contactless stores refer to a suite of technologies and customer experiences that retail chains have implemented to minimize friction or delays experienced by customers at various touchpoints and minimize human contact in the entire buying experience.

Technologies and processes that enable a contactless buying experience include e-commerce, buy online and pick up in-store (BOPIS), self-service checkout kiosks, NFC-based payment cards, mobile wallets, and cashier-less checkout experiences such as Amazon’s Just Walk Out.

What are the key drivers for contactless stores?

While e-commerce, BOPIS/Curbside, and contactless buying experiences are not new, COVID-19 accelerated the roll-out of contactless technologies and delivery models as customers and retailers pivoted to overcome social distancing norms and safety concerns.

According to Visa, tap to pay transactions in everyday segments in the US, including grocery and pharmacy, have grown more than 100% over the last year (2019). 31 million Americans tapped a Visa contactless card or digital wallet in March 2020, up from 25 million in November, with overall contactless usage in the US growing 150% since March 2019.

According to Square, “Mobile wallets have accelerated in popularity due to the low- or no-touch interactions customers can make in order to complete transactions. And for businesses, the tap-to-pay technology can reduce wait times at checkout.”

eMarketer estimated that BOPIS sales revenue in the United States grew 107% in 2020 and will continue to grow upwards of 15% till 2024.

Technology implications of implementing contactless stores for retailers

Depending on the extent and scope of contactless store implementation, retailers may have to review bandwidth availability, LAN/WAN/Wi-Fi capabilities, network security, and security camera coverage at the store.

Cashierless stores require a bevy of technologies to work together. Computer vision, artificial intelligence-enabled cameras, RFID strips, infrared lead sensors, microphones, and mobile apps work together to offer the convenience of walking in and leaving the store without checking out.

POS system may need an upgrade to offer additional payment options and integrate POS with sensors. In some implementations (such as Amazon’s Just Walk Out), the concept of POS, as we know it today, may not even exist as a virtual shopping cart is updated in real-time as the customer adds items into the basket.

Self-checkout, digital wallets, and BOPIS require a recalibrated approach to loss prevention to address theft and online frauds. According to Visa, “Unlike conventional online orders, a BOPIS transaction may contain less information to leverage in assessing the risk of the order (for example, a BOPIS order may not contain a shipping address). Unlike conventional in-store transactions, a BOPIS transaction doesn’t benefit from the secure capture of the payment, like chip-on-chip or tap-to-pay methods.”

Customer privacy concerns can become an issue when every customer is uniquely identified and tracked throughout the store. While mobile loyalty apps and guest wifi systems are already tracking customer behavior in-store, advanced contactless stores rely on enhanced customer movement tracking which may raise uncomfortable questions regarding customer privacy.

2. Artificial Intelligence (AI) Enabled Security Cameras

What Are AI-Enabled Cameras?

AI cameras use artificial intelligence to make sense of the videos being recorded. They can be programmed to detect certain types of objects or human activity, movement, removal of objects, read license plates or even recognize faces.

AI-enabled security cameras can boost the effectiveness of remote video monitoring or surveillance.

Security operators monitoring the feeds can get real-time alerts when the camera detects any of the anomalies the AI program is trained for thereby allowing security teams to act before a crime is committed.

AI-enabled security camera systems offer a searchable footage library making it easy to quickly find footage of relevance and doing away with the need sift through hours of recorded footage during investigations.

Advanced AI-enabled security cameras have deep learning capability and can become progressively good at recognizing patterns and detecting anomalies in the video being recorded.

Interface’s autonomous Anti-Loitering System includes an intelligent IP camera that uses artificial intelligence to detect people or vehicles and play customizable pre-recorded warning messages.

What Are the Key Drivers for AI-Enabled Cameras?

A recent market study concluded that the global AI camera market was worth $7.4 billion in 2020 and is further projected to reach $33.3 billion by the year 2027, growing at a CAGR of 24.0%.

A combination of factors is driving up demand and use for AI-enabled cameras.

A study conducted by PwC showed that US companies accelerated investments in AI technologies in the wake of the COVID crisis. According to PwC, “AI leaders are building a virtuous cycle, sometimes called a flywheel: AI leads to better products, increased productivity, and superior customer experiences.”

AI technology has matured in the last few years to a point where anyone can access AI frameworks and pre-built solution components on popular public clouds like AWS, Azure, and Google Cloud Platform. The ROI of implementing AI-enabled cameras is now compelling resulting in increased adoption.

The U.S Bureau of Labor Statistics estimates that the labor market for investigation and security services is expected to grow by 6.5%. However, security monitoring service providers are finding it challenging to hire and retain security professionals. AI-enabled cameras can address this issue by delivering increased productivity and improving the quality of monitoring jobs by eliminating monotonous tasks.

5G rollout is turning out to be a catalyst for the growth of sensors with edge computing capabilities. Sophisticated cameras with AI capabilities on 5G networks can push more high-quality video streams faster for further processing and analysis resulting in superior monitoring outcomes.

Technology Implications of Implementing AI-Enabled Cameras for Retailers

Enterprises looking to upgrade analog cameras can take one of the below approaches to executing the transition.

Replace analog cameras with IP cameras (with AI capabilities) along with the cabling. This is a “rip and replace approach” and the investment needed will depend on the number of sites and number of cameras that need to be replaced.

Replace the cameras without replacing the coaxial cables is an option worth considering if the cable runs are complex. In this case, IP to coaxial cabling adapters can push the videos into a video management system.

Start with proven AI security solutions before advancing to solving complex problems that might require additional sensors and sensor fusion. AI use cases such as intruder detection during off-business hours, and loitering in the perimeter area is proven and can deliver ROI faster.

AI security cameras can improve productivity and enhance the effectiveness of the monitoring team and cannot necessarily replace human monitoring. AI solutions do not understand the context of the visuals being recorded and require human review to take vital decisions.

3. Retail Video Analytics

What Is Retail Video Analytics?

Retail video analytics is a relatively new category of retail applications that leverages technologies such as computer vision and AI to capture real-time information from security camera footage.

Most retail chains have installed security cameras at all their stores. These security cameras record vital information that can be used to gain valuable operational insights about retail operations and customer behavior inside the store.

Data that can be captured with video analytics include – customer movement or flow, customer engagement with products and shelves, the effectiveness of the store layout, the impact of online promotions on foot traffic, customer service experience at the checkout, and compliance issues related to product display, spills, and cleanliness.

What Are the Key Drivers for Retail Video Analytics?

There are three primary factors driving the adoption of retail video analytics.

There was a massive shift in retail consumer behavior due to COVID-19. Retailers that had the capability to predict and react to these changes fared better than those that were too slow to respond. Retail video analytics can help retail chains move beyond descriptive analytics and implement predictive analytics to answer questions in real-time such as “What window display unit maximizes footfall conversion for a specific store format?” or “How many checkout counters should be opened between 5 pm to 7 pm on a Friday for a particular location to minimize checkout times?”
According to PwC, “Success at the shelf is no longer about the depth and breadth of inventory, but rather creating engaging experiences for customers.” Creating engaging customer experiences calls for real-time access to customer behavior data in the context of the store design or layout, time, and a slew of external contextual factors.
Profit margins are tight even as retailers retool their operations to cater to changing customer expectations. The only way retailers can find the right business model is to release products in the shortest time possible, gain tactical insights in real-time, and validate the success or failure based on measurable customer actions. Retail video analytics allows retailers to rapidly identify correlations (For example, “what’s the impact of a new layout on sales?”), validate the hypothesis (For example, does a new layout increase sales at all locations or at all store formats?), and consistently implement changes across all locations (For example, are all locations implementing the new layout as per the specifications?”).

Technology Implications of Implementing Video Analytics for Retailers

Implementing a retail video analytics solution is not a complex initiative. However, the real challenge is in identifying the right metrics to track and having the capability to draw meaningful inferences. From a retail IT organization perspective, here are the top considerations when implementing retail video analytics.

The primary sensor for gathering data from a video is the security camera. Security cameras are installed with loss prevention as the primary use case and the installed cameras may not necessarily meet the data gathering requirements for a video analytics project. Camera upgrades and new installations may become a necessity.

The ROI of a retail video analytics implementation is directly dependent on the ability to fuse data from multiple data sources to identify correlations and frame hypotheses about customer behavior. Solutions with well-documented API and integration capabilities should be preferred.

Video analytics solutions can track customer movement, product interactions, and behavior inside the store. When used in conjunction with AI-enabled cameras with facial recognition capabilities, retailers can run the risk of violating customer privacy.

Retail video analytics can be used by diverse departments or teams in a retail organization. Loss prevention, marketing, operations, human resources, compliance, legal, and merchandising teams have compelling use cases for reviewing customer as well as employee activities within the store. A robust system to regulate access to video analytics data is a critical requirement for IT teams.

4. Metaverse

What Is Metaverse?

According to Merriam-Webster, “In its current meaning, metaverse generally refers to the concept of a highly immersive virtual world where people gather to socialize, play, and work.”

Metaverse is still an emerging concept with bits and pieces of the building blocks being assembled and considered work-in-progress.

The following table breaks down the building blocks that together will eventually make up the metaverse (Source).

Metaverse building blocks

Vendors

Experience – What we experience in the metaverse in the form of games, events, or live music.

Meta, Activision Blizzard, Nintendo

Discover – How people find about the existence of experiences in the metaverse.

Facebook, Discord, Unity, App Store, Google Play

Creator Economy – Everything that’s used to create and monetize assets on the metaverse.

Unity, Roblox

Spatial Computing – 3D engine, gesture recognition, spatial mapping, and AI.

Unity, Google AI, OpenAI, Unreal Engine, Matterport

Decentralization – Making everything in the metaverse accessible to all participants and decentralized.

OpenAR, Etherium, Polygon, Ready Player Me

Human Interface – Mobile devices, VR headsets, haptics, and smart glasses.

Oculus, Apple, Playstation, Samsung

Infrastructure– Cloud computing, semiconductor, telecom/bandwidth.

GCP, AWS, Azure Intel, NVIDIA, AMD, Qualcomm, Intel, ATT

The Gucci Gardone on Roblox. Source – Roblox

What Are the Key Drivers for Metaverse Adoption?

A diverse set of factors are forcing retailers to take notice of the metaverse and some retail brands have already invested in creating a presence in the metaverse.

The shift to work from a home model and travel restrictions on account of the pandemic has also brought about a decisive shift to “shop from home” or “shop from anywhere”. For example, as people are more comfortable shopping for clothes online, apparel stores are losing footfall steadily. With e-commerce registering rapid growth, the metaverse can potentially become a competitive advantage in the future as retail brands are looking to create amazing customer experiences.

Retail chains are discovering the value of immersive training experiences that metaverse can provide. For example, Walmart rolled out a comprehensive virtual training program for all their US stores using the Oculus VR headsets. Walmart associates are trained on customer service, store operations, security threats, and BOPIS management through immersive, real-world experiences. Walmart claims immersive training has reduced training duration, improved knowledge retention, and enabled consistent implementation of customer service best practices.

Luxury retail brands such as Louis Vuitton are betting on getting a headstart with metaverse for brand building. In 2021, Louis Vuitton launched Louis The Game, a mobile game with 30 embedded NFTs (non-fungible tokens) that can be found only by playing the game. Balenciaga has launched a division in the company that’s focused on building a presence in the metaverse. Gucci’s Garden Experience on Roblox offers people the opportunity to experience themed rooms to experience the virtual gardens, share their experiences with others and win virtuals prizes. Through metaverse, luxury brands want to get in front of young audiences who may otherwise not otherwise interact with their brands.

Technology Implications of Implementing Metaverse Presence for Retailers

The metaverse is a nascent concept and making any investments in the metaverse has to be carefully calibrated with a clear focus on outcomes. Here are some of the considerations for retail CIOs and management teams looking to join the metaverse bandwagon.

Investing in the metaverse is likely to be a risky venture in terms of meeting business objectives. The metaverse as we have it today falls well short of the seamless interoperability that it aims to provide in the future. Any investments made now on a vendor platform may become irrelevant in the future as industry standards and solution frameworks are still evolving.

According to Gartner, the current maturity of metaverse solutions is collectively called the “Emerging Metaverse”. The emerging metaverse is likely to morph into an “Advanced Metaverse” by 2025 and later into a “Mature Metaverse” by 2028. With time, the technology risks are likely to come down and the ROI of metaverse initiatives will be much clearer for retailers.

Metaverse initiatives are spawning legal challenges and roadblocks for retail brands. StockX, a reseller for sneakers and other items, launched Nike shoes NFTs that can be purchased and traded online. Nike filed a trademark infringement suit. This is an example of some of the potential roadblocks retailers may face when creating a presence in the metaverse.

While there are risks in investing scarce Dollars in a metaverse initiative, being left behind is also not an option for retailers. A better strategy would be to make small bets on a wide variety of metaverse platforms to see what’s working and what’s not.

- Creating a presence on metaverse will require new IT skills either in-house or with the vendors closely aligned to the IT organization. When Home Depot implemented blockchain technology to track vendor supply chain and invoicing issues, they relied on IBM to support the implementation. Another scenario would be when retailers decide to accept cryptocurrency, They need to evaluate not only the technical challenges of integrating a crypto payment gateway but also figure out the most suitable cryptocurrency exchange to encash the payments.

5. Retail Demand Planning

What Is Retail Demand Planning?

Retail demand planning is the process of forecasting demand for products across all channels (in-store, e-commerce, BOPIS, ship from store) taking into consideration historical demand patterns, business decisions and external factors such as competitor offers.

Demand planning helps retailers navigate complex challenges across all aspects of retail operations.

Streamlined store and distribution center replenishment
Better workforce planning and optimization
Optimized product promotions and discounts
Optimized assortment planning
Better space planning and optimization
Improved budgeting and cash flow management

What Are the Key Drivers for Retail Demand Planning?

The pandemic forced retail chains to go through years of growth in just a few months! e-Commerce and new fulfillment channels are no longer seen as a differentiator as customers expect to find the products they want no matter where and how they shop.

The only way retailers can meet these expectations is by upgrading to a data-driven, real-time demand planning approach. Retailers are already upgrading their demand planning capabilities to process more data or variables in the planning process at scale while relying on human planners for qualitative input and exception management.

Here are some of the key drivers driving demand planning innovation in the retail industry.

Trust depends on retailers’ ability to deliver value and excellence in managing the inventory. Having the right product and getting it to their hands in their preferred channel is a great strategy to rebuild trust, According to Walter Robb, Former Co-CEO of Whole Foods, “Some customers say they want to be served in certain ways, such as grocery customers saying they want to pick up items in-store or have certain things delivered. It’s up to brands to develop the capabilities to serve customers how and when they want to be served. Brands earn trust when they listen to customers and are willing to meet their needs.”

Fulfillment complexity is increasing with new channels graduating from a fad to becoming mainstream. In addition to e-Commerce and BOPIS, grocery retailers will soon have one more fulfillment center, i.e the customer’s home. According to Gartner, by 2025, ‘at-home replenishment as a service’ will surge to 5% of multi-channel grocery retailers’ total revenues. Amazon and Walmart are already piloting smart refrigerators and coolers that can be automatically tracked and restocked.

Customer consumption patterns are also evolving and the pandemic created distinct consumption patterns that impacted demand planning for retailers. McKinsey identified four distinct consumption patterns during and after the COVID-19 pandemic:

Pantry load and consume (consumption expands). Example: Cleaning supplies, vitamins, and supplements. Consumption increased during the pandemic and continues to hold ground even after the pandemic.

Pantry load and preserve (consumption does not change). Example: Pet food and toilet paper. Consumption did not actually increase during the crisis, resulting in post-crisis volume declines.

Now at home (consumption shifts). Work-from-home and shelter-in-place policies force consumers to shift on-the-go occasions for products such as coffee and alcohol from in-person food-service outlets to online retailers.

Not now (consumption declines). Declining consumer confidence and a focus on essential categories lead to a decrease in purchasing certain goods during the crisis—for example, beauty, food, and beverages for immediate use. Purchasing levels for these categories are returning to normal after the crisis.

While most retailers have a lot of valuable data, many of them still lag behind in their ability to extract meaningful business insights from the data on time. Considering the retail market is going through a dynamic growth phase driven by changing customer preferences, there is a need for innovative approaches to demand planning. According to Relex, a retail demand planning platform, retailers can bridge the data utilization gap by combining artificial intelligence and machine learning with statistical modeling and optimization, simulation, classification, as well as rules, and heuristics.

Better demand planning requires an ability to crunch data at scale. Advances in in-memory computing, hybrid analytical/transactional data processing, and cloud computing infrastructure that can scale processing on-demand have allowed demand planning vendors to deliver innovative products for realistic scenario simulations.

Reducing food waste is becoming a key challenge for grocery retailers. Increasingly socially conscious customers are looking to spend their money with retailers aligned with similar values. California’s SB1383 legislation mandates grocery retailers to follow specific guidelines to dispose of unsold produce. The goal of this legislation is to minimize produce being dumped in landfills (which contributes to pollution) and instead divert the produce to non-profit organizations. Retailers failing to meet the norms are liable to pay penalties.

Technology Implications of Implementing Retail Demand Planning

The following are some of the factors CIOs and IT organizations should consider when choosing to implement sophisticated demand planning applications.

Among the several critical features required in a retail demand planning platform, Forrester has identified segmenting and clustering, demand management, inventory planning and operational effectiveness, and agile merchandising as core features to be evaluated when choosing a retail demand planning application.

Any plans for a unified demand planning software implementation should take into consideration organizational bottlenecks. If the retailer has planning teams working in silos with each team responsible for specific channels, implementing a demand planning solution that requires closer collaboration and joint decision-making on a daily basis will cause friction and turf wars. Implementing a demand planning software will involve some level of organizational restructuring to leverage all the benefits associated with a collaborative approach to demand forecasting cutting across channels.

Considering the intensive compute requirements for running machine learning and AI algorithms to create demand forecasts, retailers need to budget for cloud computing cost escalations along with fund allocations for backup and disaster recovery.

Any retail demand planning implementation should take into consideration robust data-sharing protocols with suppliers. The applications should have the ability to automatically share demand data at the right level of granularity that the suppliers can then use to plan their deliveries and manufacturing. A feedback loop may also be needed from the supplier end to plan for any variation between demand and supply.

Data quality and data governance are critical to the successful implementation of any demand planning software. Retail chains that have grown through acquisitions and saddled with diverse systems with inefficient data collection or data centralization processes can find it challenging to implement a unified demand planning solution. A focused approach to solving data collection and data quality issues should be in every retail CIO’s roadmap.

6. Generative AI

What Is Generative AI?

Generative AI creates new content, such as images, videos, music, text, or other forms of data. Unlike traditional AI models used by retailers that are primarily focused on classification or prediction tasks based on large data sets, generative AI models are designed to produce original and creative outputs.

Retail chains can leverage generative AI in various ways to enhance their operations, customer experiences, and decision-making processes. Here are a few examples of how generative AI can be used in the retail industry:

Generative AI models can be employed to create realistic product images or videos for e-commerce and catalogs even for items not yet photographed. This accelerates product development and testing without having to invest in manufacturing expensive samples that will never be sold. Merchandising teams can accelerate the process for new product development and display formats.
Generative AI can power virtual try-on applications, enabling customers to virtually “try on” clothing, accessories, eyewear, or cosmetics. By using computer vision and generative models, retailers can overlay virtual representations of products onto real-time video or images of customers, allowing them to see how items would look on them before making a purchase decision.
Retail chains can create virtual assistants and chatbots that can interact with customers, answer inquiries, provide product recommendations, and assist with the purchasing process using natural language responses, making customer interactions more conversational and personalized.

According to McKinsey, In the next three to five years, generative AI could add $150 billion, conservatively, and up to $275 billion to the apparel, fashion, and luxury sectors’ operating profits.

What Are the Key Drivers for Generative AI

Generative AI has rocketed to prominence on the back of several enabling factors that allow this advanced technology to find its way out of research to the mainstream. Here are some of these factors propelling the growing adoption of Generative AI.

Retailers have been grappling with labor shortages. In 2022, we saw the “great resignation” wave and the industry hasn’t recovered from the trend yet. According to the US Chamber of Commerce, the quit rate for the retail trade industry is hovering around 3.3 percent so far in 2023 against a falling national average of 2.6 percent. Generative AI offers a credible solution as retailers find ways to mitigate labor shortages and improve employee productivity.
The cost of AI model training has been coming down making AI accessible to enterprises and startups. According to a report from ARK Investment Management, “AI training cost declines continued at an annual rate of 70%, the cost to train a large language model to GPT-3 level performance collapsing from $4.6 million in 2020 to $450,000 in 2022. We expect cost declines to continue at a 70% rate through 2030.”
Microsoft invested over $10 billion in OpenAI in January 2023 as the company laid out a plan to integrate OpenAI’s ChatGPT with Azure to enable customers to build enterprise-grade AI applications. The speed with which ChatGPT has found traction among consumers has also created a credible proof-point for retailers to embrace Generative AI.
CIOs are already investing in building AI applications. According to this report from Databricks, 60% of CIOs surveyed planned to deploy AI-based solutions across all departments by 2025.

Technology Implications of Implementing Generative AI Applications for Retailers

According to the World Economic Forum, “Many organizations are underprepared for AI, lacking the proper oversight and expertise from key decision-makers to manage risk.” The truly transformational nature of Generative AI comes with the risks associated with venturing into a relatively new territory for retailers. Here are some of the technology implications for retailers planning on implementing Generative AI applications:

Generative AI models often require large amounts of data for training. Retail chains need to ensure they have the necessary data infrastructure to collect, store, and process the data efficiently. This may involve implementing data management systems, data pipelines, and scalable storage solutions.
Training and running generative AI models can be computationally intensive. Retail chains may need to invest in powerful hardware or leverage cloud computing services to handle the computational requirements. According to Tirias Research, Generative AI’s data center costs are projected to surpass $76 billion by 2028, potentially impacting the profitability of services like search, content creation, and business automation.
Developing and training generative AI models requires expertise in machine learning and deep learning techniques. Retail chains may need to hire or collaborate with data scientists and AI specialists to build and fine-tune these models. They also need to allocate time and resources for model training and experimentation.
Generative AI solutions need to be integrated with existing retail systems and workflows. This may involve connecting with inventory management systems, point-of-sale systems, customer databases, and other relevant systems. Integration may require developing APIs or middleware to facilitate data exchange and communication.
Generative AI can raise ethical concerns, such as the potential for bias or misuse of generated content. Retail chains need to be aware of these considerations and establish guidelines and frameworks to ensure fairness, transparency, and responsible use of the technology.
Once the generative AI solution is deployed, it requires ongoing monitoring and maintenance. This includes monitoring the model’s performance, addressing any issues or errors, retraining the model periodically to improve its output quality, and staying up to date with the latest advancements in generative AI research.

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Top SD-WAN Vendors in 2024 & How to Select One for Your Enterprise

Steve Womer — Sat, 07 Jan 2023 12:40:16 +0000

Steve Womer

SVP, Customer Operations

Managed Network & Voice

Top SD-WAN Vendors in 2024 & How to Select One for Your Enterprise

Introduction

Cutting through the Noise

When you look at the vast landscape of SD-WAN vendors, there are a plethora of features and differentiators each vendor touts as part of their marketing pitch. It’s extremely challenging for the IT department to navigate claims and counterclaims by SD-WAN vendors while keeping an eye firmly on the business needs.

In this blog, we cut through the noise to give you an unbiased insight into the specific capabilities of top SD-WAN providers that we believe have demonstrated solution maturity, implementation success and scale.

This article aims to highlight the key elements of each vendor platform and their differentiators. For the purpose of simplicity, we categorized SD-WAN vendors into two:

SD-WAN Complete Branch
SD-WAN Edge Only

In addition to vendor comparison, we have created a handy checklist that you can download and use as a template for evaluating SD-WAN solutions for your enterprise.

SD-WAN Vendor Categories Included in This Evaluation

1. SD-WAN – Complete Branch

This category of SD-WAN platform includes solutions with a unified architecture that offers:

SD-WAN orchestration and traffic control
Native Next-Generation Firewall (NGFW) capabilities
Single vendor branch infrastructure (Switching and wireless access points (WAPs) controlled via a common orchestration platform)

The main benefits of leveraging these platforms is that there is a much lower total cost of ownership (TCO) when compared to edge only solutions and a separate cloud security solution. This is not only achieved through the fact that the SD-WAN and NGFW functions are bundled, TCO is also lower because the licensing is typically less expensive and is not throughput based.

2. SD-WAN – Edge Only

This category includes solutions that are purpose-built to perform edge SD-WAN functions. Their main features include:

SD-WAN orchestration and traffic control
Application performance monitoring

Edge Only platforms are focused on application delivery and reliability as their main function. Some of the edge only SD-WAN platforms offer network administrators a sophisticated application monitoring and analytics capability to help identify root causes of performance problems.

Edge Only platforms typically have a higher TCO than complete branch solutions.

Top Vendors SD-WAN – Complete Branch

There are two main players in the SD-WAN complete branch category, Fortinet and Cisco Meraki.

Fortinet

Founded in the year 2000, Fortinet has been building security products for 20 years. Their flagship product is an enterprise firewall platform called a “FortiGate”. SD-WAN features have been added to the flagship products and are available in the latest firmware revisions. As an SD-WAN solution, Fortinet has ascended to the top right corner of the Gartner Magic quadrant for WAN Edge Infrastructure. This is a benefit to clients already leveraging the platform as enabling best in class SD-WAN may be as simple as upgrading to a later revision of FortiOS, assuming the existing devices support it.

Fortinet also has a wide range of switches and wireless access points, allowing for a homogeneous branch infrastructure.

Evaluation Factors

Observations

Initial Configuration and Deployment

Achieved through FortiDeploy and FortiManager.

Templates/policy packages are created in FortiManager and are either pushed to the device during enrolling or can be automatically associated with the FortiManager by using FortiDeploy.

Speed and Reliability

Per-session and per-packet steering are available.

Users can define SLAs and the configuration of prioritization is very granular.

Supports SSL decryption and steering based on user identity, which is a plus when network administrators want complete control over how applications and users are treated.

Network Visibility and Control

Achieved through FortiAnalyzer. Provides real time and historical statistics not only on network availability, but also security functions like; compromised endpoints, IPS/IDS events, blocked URLs, to name a few.

Pros

First Packet Identification
Active Steering
SD-WAN edge, switching, and WAPs controlled through single pane of glass
Best of breed security
No SD-WAN throughput licensing
Deep, granular control over application SLA and steering
SSL decryption
Easy configuration of remote VPN users using Forticlient

Cons

Orchestration and visibility require separate licenses
Limited application performance monitoring.

Summary: Fortinet is a platform for businesses that need best of breed security and flexibility to support non-standard designs and standard designs alike. Not overly difficult to configure but will work best when configured and administered by experienced network engineers.

Cisco Meraki

Meraki was founded in 2006 as a wireless access point platform and added switching and edge routing to the technology stack as the company grew. After being acquired by Cisco in 2012, Meraki has grown substantially and has operated largely as an independent platform and as a lower cost alternative to Cisco native products. Meraki added SD-WAN to their marketing materials as the demand grew. Similar to Fortinet, Meraki has a wide variety of switching and wireless access points.

Evaluation Factors

Observations

Initial Configuration and Deployment

Achieved through the Meraki controller.

Organizations and networks are configured, and templates are established for device profiles.

Configuration variables are applied to the Meraki devices when they are added to an organization and templates applied.

Speed and Reliability

Per-session steering is available. However, per packet steering or duplication is not available.

Has DPI and SSL decryption.

SLAs for steering can be user defined, although custom applications are not currently supported.

Network Visibility and Control

Achieved through the Meraki controller.

Provides real time and historical statistics on network availability.

Ease of use for configuration is a high point for the Meraki controller at the expense of some granularity and flexibility.

Pros

SD-WAN edge, switching, and WAPs controlled through single pane of glass
Advanced security license includes important security features
No SD-WAN throughput licensing
Meraki Controller included in license
Ease of use and configuration
SSL decryption

Cons

Organization scale becomes an issue for larger clients, sometimes requiring multiple organizations for a single customer WAN
Limited application performance monitoring
No forward error correction
No dynamic bandwidth detection
No identity-based steering

Summary: Meraki is a platform for businesses that have a straight forward network design with limited security considerations, do not need the SD-WAN dynamic path selection bells and whistles that other platforms have, and need a network stack that is easy to configure and support.

Top Vendors SD-WAN – Edge Only

There are two main players in the SD-WAN complete branch category, Fortinet and Cisco Meraki.

VMware Velocloud

VeloCloud was founded in 2012 with a vision to use cloud and virtualization to reinvent the WAN. Their fundamental differentiator early on was their ability to virtually bond multiple underlay circuits on a single virtual overlay link as well as enhance the user experience on a single connection using forward error correction and other proprietary mechanisms.

Their unique delivery model that included cloud gateways and a strong marketing strategy helped VeloCloud to grow rapidly until it was acquired by VMware in 2017.

Evaluation Factors

Observations

Initial Configuration and Deployment

Achieved through the VeloCloud Orchestrator (VCO). VCO templates are built and applied to VeloCloud Edges (VCE) upon activation.

Speed and Reliability

VeloCloud has deployed VeloCloud Gateways (VCG) in large data centers distributed globally and can provide on-demand link steering for cloud applications without passing through a customer data center.

Per packet steering, per session steering, and packet duplication are available but SLAs are pre-defined, so the user selects from one of the available traffic classes to assign priority for each policy.

Network Visibility and Control

Achieved through the VCO, ease of use is a big plus for VeloCloud.

Menus are easy to navigate and configuration changes are easy to deploy.

Has network performance as well as application performance monitoring.

Pros

Easy to configure
Cloud hosted gateways allow for easy implementation of multi-path session survivability
Application performance monitoring
First packet identification

Cons

No SSL decryption
Canned application SLA configuration
No NGFW capabilities

Summary: Early entrant with a mature and stable platform. Ease of configuration and management at the expense of some flexibility. A good platform for customers with straight forward network requirements that are considering a DIY SD-WAN solution.

Silver Peak

Silver Peak Systems was founded in 2004 and their first product was an NX-series hardware appliance and their focus until launching an SD-WAN platform was WAN Optimization. In 2015 Silver Peak launched the Edge Connect platform for SD-WAN. As of this writing HPE has announced its intent to acquire Silver Peak.

Evaluation Factors

Observations

Initial Configuration and Deployment

Silver Peak uses the Unity Orchestrator for template management.

Templates are created based on business intent and applied to Edge Connect devices with location specific variables.

Speed and Reliability

Per-session steering, per-packet steering, and packet duplication are available.

Users can define SLAs and the number of applications for steering is extensive (industry leading as of this writing).

Does not support SSL decryption and steering based on user identity.

Also has a license add-on for boost which enables WAN Optimization functions like TCP optimization and de-duplication.

Network Visibility and Control

Network statistics and health can be obtained through Unity Orchestrator. Has application monitoring (MOS) (Mean Opinion Score).

Pros

Granular control over application SLA and prioritization
Application performance monitoring (Mean Opinion Score)
First packet identification
Full featured SD-WAN path control including duplication

Cons

No SSL decryption
No NGFW capabilities
MOS monitoring but no MOS steering
Requires deep knowledge of platform to properly configure

Summary: Silver Peak is an SD-WAN platform with all the path selection bells and whistles you would expect in an industry-leading solution with a high level of configurability for those that want to be able to turn knobs and levers to fine tune performance. Option for WAN Optimization is beneficial for businesses that will benefit from it. However, the high level of configuration variables requires a high level of expertise to successfully implement this solution.

Cisco Viptela

Viptela was founded in 2012 as an SD-WAN edge company. Viptela’s orchestration platform (vManage) was built to be a comprehensive but easy to use tool and provides more familiar functions (Command Line interface, granular configuration, and SLA control) to network engineers when compared to some other early entrants to the SD-WAN market.

Viptela was acquired by Cisco in 2017 and Cisco has undergone a process of supporting the Viptela software on their ISR platform. As of this writing Cisco still offers Viptela native hardware.

Evaluation Factors

Observations

Initial Configuration and Deployment

Templates are built in vManage and provisioned using vBond.

vSmart is used to authenticate vEdges (Viptela hardware + software) for provisioning or now cEdges (Cisco ISRs running Viptela software).

Requires network engineering expertise and/or assistance from Cisco engineers for set-up.

Very flexible but not as simple as some other platforms that are GUI only.

Speed and Reliability

Viptela uses traditional routing protocols rather than proprietary software and has session-based steering but no per packet steering.

Packet duplication is available.

vSmart controller functions as the routing engine and SLAs can be user defined.

Viptela has extensive applications for steering, although the vEdge supports more applications than cEdge/ISR.

Network Visibility and Control

Network statistics and health provided through vManage (vAnalytics) and has an extensive knowledge base on the Cisco website.

Pros

Granular control over SLA
Familiar tools for network engineers (CLI, common routing protocols)
Single dashboard for visibility and control
Packet duplication
Software can be loaded on existing supporting ISRs
NGFW (Available when deployed on ISR)

Cons

No SSL decryption
No NGFW on vEdge platform
No custom applications or application monitoring

Summary: A platform for die-hard Cisco fans that want SD-WAN features but also want functions that are familiar like a command line interface and routing protocols like BGP/OSPF/VRRP for SLA management.

Palo Alto CloudGenix

CloudGenix was founded in 2013 and has built what they call a “Gen 2” SD-WAN platform. The solution is focused on application-level visibility and performance management rather than traditional transport layer prioritization that some other platforms use. CloudGenix was acquired by Palo Alto Networks in 2020 to help round out the company’s SASE strategy.

Evaluation Factors

Observations

Initial Configuration and Deployment

CloudGenix’s orchestration platform allows you to configure templates and deploy devices (IONs) based on standard configuration rules.

Speed and Reliability

Per session steering is available, packet steering and duplication are not.

Allows customization of SLAs and applications.

Does not support SSL decryption but does have identity-based steering.

Network Visibility and Control

Visibility and analytics (Clarity platform) is the biggest differentiator of the CloudGenix platform.

While the SD-WAN path control may not be as advanced as some of the other platforms, the ability to measure and make on the path selection decisions based on application performance (like MOS based steering) is a differentiator.

Pros

Active and passive performance monitoring provides extensive analytics on application flows
Cloudblades platform allows easy deployment of approved 3rd party branch infrastructure services like cloud firewall and UCaaS
Granular control over SLA and custom applications
Application-performance based steering

Cons

No packet level steering or duplication
No SSL decryption
No first packet identification
No NGFW
PAN (Palo Alto Panorama) integration is still a separate license and orchestration platform

Summary: A flexible SD-WAN platform geared towards customers that need a tool allowing visualization and analytics around application performance.

Versa

Founded in 2012, Versa has offered an SD-WAN solution with built-in security since inception. Several carriers chose Versa as their go to SD-WAN solution for enterprise clients before they moved to offering alternative solutions.

Evaluation Factors

Observations

Initial Configuration and Deployment

Versa uses Versa Director for template and lifecycle management.

Device templates are configured, and service templates are used for steering, security, and Quality of Service (QoS).

Both are applied to appliances during activation.

Speed and Reliability

Versa has per-session and per packet steering, as well as packet duplication.

SLAs and applications are customizable, providing a high degree of flexibility in configuring policies for maximum network performance.

SSL decryption is supported but user identity-based steering and first packet identification are not.

Network Visibility and Control

Versa has Versa Director and Versa Analytics, providing a view into real time network and application performance as well as analytics with actionable insights on network security and application performance.

Pros

All of the SD-WAN path selection features with a high degree of flexibility
NGFW included
MOS based steering
SSL Decryption
Application performance monitoring

Cons

No identity-based steering
No first packet identification

In summary: Versa works well for companies that need all the traffic steering functionality that SD-WAN offers and want to administer security and SD-WAN in a single pane of glass.

Checklist for Evaluating SD-WAN Solutions

When evaluating SD-WAN solutions, there are three critical criteria that enterprises should consider:

Initial and ongoing configuration aka orchestration
Path selection and steering
Security

Here is a checklist that’s designed for mapping SD-WAN feature sets offered by vendors to business needs.

Cost & Licensing

Determine Overall Budget Goals

Do you have the budget for active/active or active/passive connectivity?

Would you be using DIA/Broadband?

What are your connectivity options -wired/wireless?

Do you have aging/unmanaged switches and/or WAPs?

If so, consider replacing them at the same time as the WAN edge.

Bandwidth Sizing

Determine the throughput requirements and ensure proper sizing is factored into TCO.

Path Selection & Steering

Custom Applications

Do you have in-house applications that require prioritization? If yes, ensure the SD-WAN platform can identify that traffic.

Active Steering/Session Survivability

If required, look for solutions that either have packet based steering or duplication.

Custom SLAs or Category SLA

Determine if you need the ability to define SLAs rather than using canned priority classes

Identity Based Steering

Do you need to steer traffic based on a user identity?

Security

NGFW Capabilities

Do you prefer to have security enforced at the WAN perimeter or do you prefer to send all traffic to the cloud for inspection?

SSL Decryption

Do you require SSL inspection?

Configuration & Maintenance

Deployment / Configuration

If using an SD-WAN integrator, ensure they’re familiar with your existing architecture for a smooth transition.

If deploying using internal resources, ensure you have the level of expertise required to configure and implement the solution.

Visibility

Do you need to continually measure application performance and modify business policies to use the best path?

SLA Management

Do you need the ability to measure SLAs to provide reports to carriers to request SLA credits?

Alerting

If using an SD-WAN integrator, ensure their monitoring and management includes everything required to maintain the SD-WAN edge, including connectivity.

If self managed, ensure you have the tools and personnel to deal with last mile issues.

The SD-WAN market continues to mature and is now a mainstream component of network refresh projects.

When looking at SD-WAN vendors, there is a large amount of feature parity and a majority of the differences are nuanced, for example, where to go in the Orchestrator to create a business policy.

That being said, understanding whether or not you can tolerate a dropped session when a primary connection fails or whether or not you need the ability to add custom applications are just a few examples of the decision criteria you should use when comparing SD-WAN vendors.

4 Practical considerations for SD-WAN design

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About the author

Steve Womer

SVP, Customer Operations

Steve Womer has experience designing and deploying WAN/LAN infrastructure for distributed enterprise clients since 2008 and has served in various engineering, sales engineering, and operational roles for industry leading managed services providers.

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Retail Store Layout Optimization with Video Analytics

Steve Womer — Fri, 06 Jan 2023 20:00:01 +0000

Steve Womer

SVP, Engineering

Business Intelligence Retail Video Analytics

Retail Store Layout Optimization with Video Analytics

Introduction

What is Retail Store Layout?

Retail store layout refers to how brick-and-mortar retailers set up product displays, fixtures, and merchandise in their stores. A well-planned store layout can positively influence customer experience, a critical factor to drive product engagement, sales, and improve customer lifetime value.

Retailers have several tools to gather and analyze data to understand if the store layout is working well and identify problem areas that need optimization. Some of these tools include store audits, mystery shopping, and customer surveys or shopper feedback.

However, there are three fundamental limitations of using these measurement techniques for evaluating store layout effectiveness.

Some of the observations may be subjective or subject to interpretation.
Observations or feedback from a customer or from a store audit may or may not be consistently true across all locations or at all times.
There is no way to access real-time data on store layout performance using any of these traditional measurement methods.

Video analytics addresses these limitations as it is driven by aggregated data, captured and processed in real-time, at all locations where the store layout is being monitored.

That’s not all. Video analytics can be implemented by leveraging security cameras that the store may already have in place. Click here to learn more about video analytics.

In this blog post, we will explore how retail chains can optimize store layout using video analytics.

Types of Retail Store Layouts

Let’s explore the pros and cons of retail store layouts along with examples of prominent retail chains and categories employing these strategies.

Grid Layout

Pros:
Easy navigation for customers.
Efficient use of space, allowing for a high product density.
Simplifies inventory management and restocking.

Cons:
Lack of uniqueness in design.
Limited opportunities to create focal points or highlight specific products.
Example: Large format retailers like Walmart and Target often adopt a grid layout to streamline the shopping experience and accommodate a vast array of products.

Loop or Racetrack Layout

Pros:
Encourages exploration as customers follow a predefined path.
Promotes impulse buying with strategically placed displays.
Ideal for larger stores with a wide product range.

Cons:
Potential for congestion and bottlenecks, especially during peak hours.
Limited flexibility in creating distinct shopping zones.

Example: IKEA, a furniture and home goods retailer, utilizes a loop layout, guiding customers through various showroom sections and strategically placing smaller items in the pathway to encourage additional purchases.

Free-Flow Layout

Pros:
Offers a relaxed and casual shopping environment.
Encourages creativity in display and decor.
Allows for easy adaptation to changing merchandise or seasonal themes.

Cons:
Challenges in guiding customer flow and promoting specific product areas.
Risk of customers missing certain sections of the store

Example: Apple Stores, known for their electronics and tech products, often feature a free-flow layout, allowing customers to interact freely with products, creating a more personalized and engaging experience.

Angular Layout

Pros: Creates a visually interesting and dynamic store design. Facilitates the establishment of distinct departments or product categories. Encourages customers to explore different sections of the store.

Cons: Requires careful planning to avoid confusing navigation. May result in underutilized space in corners and angular areas.

Example: Zara, a fast-fashion retailer, often employs an angular layout to create visually striking displays and highlight specific clothing collections.

Geographic Layout

Pros: Organizes products based on their intended use or category. Provides a logical and intuitive shopping experience. Enhances the customer’s ability to find specific items easily.

Cons: Limited flexibility in adapting to changing merchandise or promotional displays. Challenges in creating a visually appealing overall store design.

Example: Best Buy, specializing in electronics and appliances, organizes its stores based on product categories, adopting a geographic layout to simplify the customer’s search for specific items.

Mixed-Use Layout

Pros:
Combines elements of different layouts for a customized approach.
Offers flexibility to cater to various product categories.
Allows for creative and innovative store design solutions.

Cons:
Requires careful planning to maintain a cohesive and harmonious overall look.
Potential for confusion if not executed seamlessly.

Example: Sephora, a beauty and cosmetics retailer, often adopts a mixed-use layout. The store seamlessly integrates grid-like shelving for a wide range of products, while also incorporating free-flowing beauty stations that encourage customers to experiment with makeup and skincare products, creating an interactive and personalized shopping experience.

Significance of retail store layout

Before we explore the various strategies to deploy video analytics for measuring store layout effectiveness, let’s understand how retail layout has a direct impact on customer satisfaction and store performance.

1. Create a great customer experience

The massive shift to ecommerce and BOPIS (Buy Online and Pickup in Store) has turned the spotlight on in-store customer experience.

Even pure-play ecommerce brands like Amazon are opening brick-and-mortar locations to offer customers the experience of traditional shopping with never-before-seen convenience.

Customer experience is probably the single most important tool that brick and mortar retailers can use to give customers enough reasons to come back to the store boosting chances for engagement and conversion.

Retail chains with the capability to measure and monitor changes in customer experience can make changes in the store layout so that product categories that are in high demand can gain prominence.

REI has created a unique in-store experience that includes a combination of interactive displays, expert sales staff, and in-store activities that give customers who enjoy the outdoor lifestyle plenty of reasons to visit an REI store.

2. Increase sales

A good store layout plus customer flow combination can increase sales of even the most underperforming product. A layout that reflects specific shopper missions and needs can help customers achieve their mission and increase sales of products that meet those mission requirements. Here is an illustration of how store design elements can help a customer accomplish their mission.

Customer Mission: I need to wrap up shopping before the meeting.

How Store Layout Can Help: Layout that places popular product categories prominently

Store map at entrance: Improved signage for all departments with popular products listed on the signage

Customer expectations, needs, and wants are dynamic and retailers with the ability to optimize and reinvent store layout can turn challenges into new sales opportunities.

For example, putting BOPIS or click-and-collect counters near the store entrance makes it more likely that customers will use this service in the future, helping retailers capture more of this market in the future. Since the click-and-collect market in the U.S. is forecast to grow to $120 billion and beyond by 2023, this type of store layout option can increase overall sales dramatically for retailers.

3. Manage stock more efficiently

Managing space optimally can maximize sales, minimize stockouts. improve employee productivity and align with the objectives of the store itself.

For example, a store that’s designed to introduce new products and carry little inventory is designed to maximize product engagement with checkout counters taking the backseat completely as employees focus on product engagement and possibly help customers place online orders at the store. A classic example of a store design that focuses on product engagement is the Apple store.

A store that’s focused on convenience and breadth of assortment such as a specialty grocery store has to be designed for easy access and having enough space for carrying all the assortments.

Trader Joe’s small format stores focus on convenience and quick access to a wide variety of specialized grocery and food items. Their design is easy to work with not only for customers but also for employees. Their inventory management and ordering is perfectly timed with demand and shelf breaches (items being placed outside the designated areas) or prolonged stockouts is never a problem as the store layout gives easy visual and physical access to all aisles.

4. Minimize theft

According to the 2020 NRF Security Survey, retail shrink is at an all-time high, accounting for 1.62% of a retailer’s bottom line — costing the industry $61.7 billion. While retailers use a variety of technology solutions such as video surveillance, protective display cases with locks, chords, EAS (electronic article surveillance), retail store layout is one of the many factors that determine the success of loss prevention efforts.

Some of the store layout and design principles that minimize theft and an assortment of inventory losses include:

A design that offers a clear line of sight for employees at the checkout counters to all parts of the store.
A layout that doesn’t obstruct camera views or signals from EAS installations.
A layout that avoids cramped spaces and allows employees to identify misplaced items quickly.
A design with well-planned exits that minimizes chances of snatch and grab thefts.

5. Improve safety and accessibility

Safe retail store design keeps employees safe from environmental and health hazards. A store layout that’s accessible ensures anyone can access the store regardless of ability.

Depending on a store location, any retail layout has to comply with regulations and policies associated with safety, security, and accessibility.

A well-designed retail store will take into consideration a number of design parameters that directly impact safety and accessibility. Here are some examples:

A store layout with aisles and customer paths wide enough to accommodate wheelchairs with adequate ramps and accessible facilities throughout the store.
Ergonomically designed display units or shelving to prevent injuries for customers or employees handling the product.
Store layout designed for proper airflow and ventilation throughout.
Stores with properly designed flooring and elevated platforms to avoid trips or falls.

Designing an accessible store layout is good business. According to the United States Department of Justice, “More than 50 million Americans with disabilities are potential customers for retail businesses across the country. These 50-million-plus customers, along with their families and friends, patronize clothing boutiques, mall outlets, grocery stores, and more, if the businesses are accessible. This market grows even larger if the 78 million baby boomers in this country – who do not always require but benefit from accessibility – are included. Accessibility makes good business sense: an accessible retail establishment brings in new customers and keeps them coming back again and again.”

Store layout optimization strategies using video analytics

1. Streamline customer flow

Video analytics is well suited to map and measure customer flows through the store. Understanding customer flow helps retailers evaluate the effectiveness of the store layout, understand the best possible placement of products, measure customer actions at every section or department, measure the impact of specialized displays, in-store promotions, or marketing campaigns, to name a few.

Video analytics, when combined with POS data, can help retailers conduct a real-time audit of the store layout to identify bottlenecks in the design, and align the layout to help customers successfully accomplish their shopping missions.

Here are some of the ways video analytics can help retailers troubleshoot store layout issues to improve customer experience and revenues:

Use pathmap metrics to understand how customers move around in the store. Redesign the store layout or make changes to problem areas in the store to drive desired customer actions such as better footfalls in previously low activity areas or reorganize the placement of products to help customers get what they want faster.
Identify and eliminate ‘dead zones’ in terms of footfall activity or engagement and take remedial actions such as better signage, lighting, or a redesigned layout.
Use traffic data at store entrance and exits or department/category entry and exits to measure overall or department/category level conversion metrics. Analyze conversion metrics together with other factors that determine conversions such as weather or seasons. Test hypothesis on reasons for conversion with a/b testing spanning layout, product placements, promotions, or in-store displays/announcements.
Track dwell time across the store to understand customer interest in specific products as well as flow bottlenecks that force customers to wait longer than expected such as in the checkout areas. Use these insights to offer more products that customers want or reorganize the checkout flow to reduce wait time.
Dwell times at entrances of different departments can measure bounce rates and call attention to better product placement, staff engagement to bring guests further into the store.

Store floor plans dictate customer flow and how customers interact with the products. Irrespective of the type of store layout or floor plan (grid layout, herringbone, free-flow, geometric, mixed, to name a few), video analytics can play an important role in uncovering real-time business intelligence on how the layout is performing. The pathmap overlay on the video stream from the overhead camera offers valuable data on how the layout is impacting customer flow through the store.

2. Delight customers with a better checkout experience

The last impression is probably the best impression for retail chains looking to provide a memorable customer experience. A long checkout queue can completely wipe out any positive experience customers might have had at the store before they wanted to checkout. In some cases, customers in a hurry can just abandon their carts and never return to the store!

Retailers have already implemented an assortment of improvements to make the checkout process efficient. These include changes in how queues are organized, self-checkout kiosks, app-based self-checkout, shelves near the checkout counters to entice impulse purchases, to keep the process predictable and customers engaged as they wait for their turn to pay.

Video analytics can help retailers use real-time data to understand what’s really happening at the checkout area.

Because video analytics offers vital video “evidence” that retailers can see first hand to understand queue efficiency and cart abandonment.
Video analytics can identify dwell times at queues to calculate the average waiting time for a customer and use the data to plan for additional checkout lanes or self-checkout counters in addition to ramping up staffing levels to meet periodic demand surges.
With video analytics, retailers have the flexibility to conduct data-driven tests when making significant changes to the checkout area design flow before rolling it out to the rest of the stores. The impact of layout changes on the average transaction value and items per transaction can help retailers take a decision on the revamped store layout.

Here is an example of a report from Interface’s video analytics solution that provides average dwell time waiting in queue and the average time at the checkout counter. This data can be viewed in the context of how effective a new checkout experience or layout is. In addition, this data can be mapped to other factors such as time of day, day of the week, holidays or staffing levels:

3. Improve product placement

Product placement is probably one of the most important factors that impact retail sales and is closely tied to the store layout.

While planograms offer the template to slot products in the shelf space, real-time data-driven decisions can help retailers maximize sales by aligning shelf space to customer preferences and other factors that drive purchases such as the weather or local events.

Video analytics can be a game-changer in giving retailers instant visibility on potential product placement issues and identifying opportunities to maximize basket size.

Some of the insights retail video analytics can uncover to improve product placements include:

Hotspots around display units and shelves to precisely identify the products that customers are looking at or interacting with. This allows the retailers to identify products that need to be relocated to boost sales or change the assortment around the hotspots to promote cross-sell.
Retailers can look at dwell time data to understand what might be causing customers to interact with the products in shelves with high dwell times and find a correlation to other factors such as time of the day, packaging, marketing campaigns (in-store or online), or any other factor that might be driving increased dwell time.

Retailers with data on the performance of shelf space across product categories and departments can optimize the store layout and display units or even change the design of the store to offer most product categories the best possible exposure to customers.

Video analytics can empower local teams to make store layout decisions based on real-time data while ensuring planogram compliance or even using data as evidence to change the planogram.

Here is a heatmap view from video analytics that precisely highlights the product displays that attracted maximum customer interactions or engagement. Using this data in conjunction with sales data or marketing campaign calendar can uncover challenges and opportunities with the product placement tactics or even store layout changes to improve performance.

4. A/B test store design or layout changes

The practice of A/B testing is a common practice to test or validate ecommerce sites and online experiences. With video analytics, retailers have the capability to conduct real-time, data-driven A/B tests to validate the effectiveness of the store layout or a specific component such as a brand new display unit measured in terms of dwell time, heatmaps, and sales conversions.

In addition, video analytics also allows retailers to A/B test the effectiveness of store design on new customer behaviors such as BOPIS. For example, video analytics can help find answers to questions like “Would it make sense to design the in-store pickup area to showcase products that are not available online?”.

Here are four different product display designs and the associated pathmaps of customers interacting with the displays generated by the Interface video analytics solution

With video analytics, retailers have the flexibility to test any number of store layout or design variations across multiple locations at a time. This is a useful feature that allows retailers to

Conduct multivariate A/B tests with the right sample size
Ensure tests run for the required duration to reach the threshold KPI uplift

5. Supercharge merchandising tactics

The merchandising function is at crossroads as retailers scramble to offer an omnichannel customer experience and stay ahead of evolving customer expectations. Technology solutions, like video analytics, can play a significant role in helping merchandising teams recalibrate their priorities, and become agile to keep pace with changes.

According to McKinsey, the merchandising function will be driven by automation and here is how video analytics can help enable the transition to agile merchandising.

Merchandising area of responsibilities

How video analytics can help

Merchandising planning

Video analytics, when combined with POS data, allows merchandising teams to get real-time visibility on customer demand for categories, assortments, sizes in addition to predictive insights on how they are impacted by geography, time, and events right down to the store level.

Pricing and promotion

With video analytics, retailers can see how pricing and promotions impact customer walk-ins, product engagement, and sales giving merchandising teams complete visibility into the sales funnel. This insight is valuable to make pricing adjustments or recalibrate promotions to drive sales.

Assortment planning

When real-time customer engagement data at the shelf level from video analytics are combined with sales data, retailers can optimize assortment planning and change shelf space allocation or placement of specific assortments to maximize sales and profits.

Space planning

Video analytics can provide real-time feedback on the effectiveness of the planogram in driving engagement and giving customers easy access to the products they want. This data can become the basis for a feedback loop to improve the planogram and use the shelf space better.

Here is an example of customer engagement data for a display unit. Merchandisers can use this insight to manage shelf-level displays or even floor layouts. In addition, inventory checks and audits can be done in real time without waiting for onsite audits.

6. Improve storefront design

Storefront design has always been a major factor in retail success. When done right, creative storefronts make new customers feel curious and existing customers satisfied with their choice.

Video analytics can help retailers gather valuable data to improve the performance of storefront design.

Heatmaps and dwell times can be used to understand which display elements are attracting attention.
Changes in display design or layout can be put through an A/B test to measure improvements in engagement and walk-ins.
Pathmaps can show how many people walk past the storefront (bounce rate) and what percentage of people walking by enter the store.
All of the above insights can be correlated to other data such as holidays, time of day, day of the week, promotions, online campaigns to name a few to give a better insight on storefront designs that encourage desired customer behavior.

Different storefront window treatments can have their effectiveness measured via customer entry counts.

7. Ensure layout and design compliance

There are three reasons why store layout and design compliance is a major operational requirement in retail chains:

One of the key promises of a brand is delivering consistency at every touchpoint. In-store design and layout is an important factor that helps retailers create a unique yet consistent experience for customers.
Layout and design compliance is also a key requirement for brands that may have paid for premium shelf space or set up special display areas. Retailers rely on physical in-store audits to verify design or layout compliance across stores.
Ensuring that the store layout does not cause unintended issues such as closed spaces, bottlenecks, or blocks access to lighting or surveillance which might contribute to poor safety or health hazards for employees and customers.

Video analytics offers retail compliance, marketing, and merchandising teams monitor store layout and design compliance at scale across a large number of locations. The screenshot below demonstrates how Interface’s video analytics solution enables a visual verification of layout and design compliance across stores.

In addition to monitoring layout compliance in real-time with no need for physical audits, store managers can use video analytics to spot maintenance issues, identify stockouts, and validate if compliance violations are fixed properly.

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About the author

Steve Womer

SVP, Engineering

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Business Video Surveillance Insights for Loss Prevention Teams

Don Fruhwirth — Thu, 05 Jan 2023 17:17:47 +0000

Don Fruhwirth

Director Product Management

Business Security Video Analytics

Business Video Surveillance Insights for Loss Prevention Teams

Introduction

The National Retail Federation reported that retailers lose about $700K for every $1 billion in sales to organized crime and theft.

Loss prevention teams in distributed enterprises and businesses such as retail and restaurant chains are ramping up investments in advanced video surveillance solutions in addition to tightening return policies, point of sale monitoring, and employee screening.

However, getting the basics right when implementing a business video surveillance system can provide a significant boost to the effectiveness of sophisticated loss prevention solutions.

In this blog post, we will cover:

How to choose CCTV cameras that can get the job done
Impact of camera technology on solution design
Camera placement best practices for video surveillance
Why vendor selection is critical for implementing the right solution

What is business video surveillance?

Business video surveillance refers to monitoring a place of business such as a retail store or office with CCTV cameras. The primary reasons for monitoring a place of business are to secure the business, gather evidence of a crime, and reduce instances of fraudulent liability claims.

There are various types of video surveillance used by businesses depending on the security needs and size of the business.

Onsite CCTV Monitoring – Small businesses such as independent stores or restaurants install CCTV (closed-circuit television) cameras with the footage being monitored and stored at the same location. The primary purpose of onsite surveillance is to dissuade crime, identify perpetrators of crime or theft, and assist law enforcement in investigations.

Remote Video Surveillance – Distributed businesses with a need to monitor security camera footage across multiple locations rely on a central monitoring location that gets direct or live Internet feeds from video surveillance systems installed at all the locations. Remote video surveillance involves the implementation of sophisticated video streaming, data storage, and video management software and provides advanced monitoring and video analysis capabilities to loss prevention teams.

Interactive Remote Video Surveillance – With remote video surveillance, the team that’s monitoring security camera feeds from a remote location can see what’s happening at all the locations but they can neither hear nor speak to the people at the store directly without picking up a phone. With Interactive video monitoring, the remote video surveillance team can hear and speak to the people being monitored via microphones and speakers installed at the location. With interactive remote video monitoring, loss prevention teams can perform additional tasks such as:

Virtual tours to monitor all corners of the store or business location and identify vagrancy or undesirable activity around the business location or store.
Voice-downs to deter shoplifting, enforce social distancing, or make announcements related to operations compliance based on specific events like a door opening or delivery personnel entering a location.
Virtual escorts to help employees with cash movement, store opening/closing, or moving between secure locations.

The following sections explore video surveillance best practices that business owners and loss prevention teams can leverage to improve security and prevent loss.

Find out how Panda Express uses Virtual Guards and Virtual Escorts to proactively secure their operations.

Read the Case Study

1. Choosing the right camera for the job

Security cameras used by businesses for video surveillance come in many shapes with different feature sets, technology, and applications. Choosing the right camera for meeting a specific objective is critical for loss prevention teams.

Indoor Vs Outdoor Cameras

Broadly, there are two types of cameras depending on where they are deployed – Indoor cameras and outdoor cameras. For commercial video surveillance applications, cameras rated for outdoor deployment are preferred for three key reasons.

Indoor environments in businesses such as restaurants and industrial units have smoke, dust, and grease. For example, deploying indoor-rated cameras in a fast food joint may be a bad idea as cameras can be coated with grime or grease. Indoor-rated cameras become unserviceable in such environments whereas outdoor-rated cameras can remain functional as they are designed to keep dust and grease out.
The price differential between indoor and outdoor cameras has come down over the years and outdoor cameras have a minimal cost differential to an indoor camera. The higher cost for outdoor cameras can be easily justified as they outlive indoor cameras and offer greater ROI for businesses.
Outdoor cameras are designed to withstand heat, moisture, snow and work well in commercial establishments where perimeter security requirements such as in drive-through areas and parking lots are as important as security inside the premises.

Some businesses, such as car wash centers, have unique monitoring requirements. For example, cameras inside the car wash tunnel should be able to withstand water and moisture without fogging the lens. In addition, camera feeds need to be integrated with tunnel optimization software. Find out how Mister Car Wash tackled these challenges.

Read the Case Study

Camera types and applications

Mini Dome Cameras

What are mini-dome cameras?
Mini-dome cameras are compact, versatile cameras that are cosmetically appealing and come with a wide variety of features that make them suitable for a wide range of applications.

What are the features of a mini-dome camera?
Mini-dome cameras have a mid-size form factor. The lens in these cameras is not clearly visible making it difficult to see where the camera is aimed thereby improving its overall effectiveness as a surveillance tool.

Mini-dome cameras are available with fixed and variable focal length lens options, remote-focus controls, wide dynamic range (WDR) capabilities that improve overall image quality when looking out doors or windows by creating a balance between the dark and bright areas of an image.

Some of them have infra-red (IR) illuminators and sensors for visibility in low/no light conditions, and built-in analytics capabilities, such as line-crossing detection, making them useful for a variety of monitoring requirements.

What are the use cases for mini-dome cameras?
Because they are both indoor and outdoor rated, mini-dome cameras can be used almost anywhere for a multitude of applications – lobbies, hallways, production floors, parking areas, entries/doors, sales areas. Outdoor versions are often used in indoor applications such as in kitchens and in freezers or coolers due to their weather-resistant capabilities.

Outdoor applications require proper planning as a poor choice of installation locations can expose the camera and internal parts to direct sunlight often resulting in overheating and a shorter life span.

Micro Dome Cameras

What are micro-dome cameras and how are they different from mini-dome cameras?
Micro-dome cameras are similar to mini-dome cameras but are smaller, thinner, often surface-mounted and less obtrusive. They have similar features as mini-domes but due to their smaller size may not have variable-focus lens options typically available with a mini-dome camera.

What are the features of a micro-dome camera?Micro-dome cameras have a similar set of features as a mini-dome but are generally available only with fixed-focal-length lenses.

What are the use cases for micro-dome cameras?Typical use cases for micro-dome cameras include observing checkout areas in retail and quick-service restaurants, ATMs, hallways, or walkways or anywhere a smaller size, less obtrusive camera may be desirable.

Turret Cameras

What are turret cameras?
Turret cameras are often called a flat-faced dome or eyeball camera resembling a sliced sphere in a ball-and-socket joint design which can be swiveled around in its “socket” once the base of the camera has been mounted. A turret camera has compact dimensions with the lens inside a housing as opposed to a dome.

What are the features of a turret camera?
Turret cameras have most of the features of mini-domes (fixed/varifocal, WDR, IR). Some turret cameras may have an IR feature known as EXIR, or extended infrared, a design where the camera lens and IR LEDs (light-emitting diode) are housed behind two separate windows which can eliminate infrared glare that is sometimes encountered in mini- and micro-dome cameras.

They are easy to install on a flat surface such as a ceiling or wall, rated for outdoor applications, and have a hardening rating to resist tampering or vandalism. The lens and internal components are better protected from environmental factors such as sunlight and moisture making them well suited to outdoor installations.

What are the use cases for turret cameras?
Turret cameras are used for observing sidewalks, entries, exits, drive-up lanes, or parking lots. They can also be used for indoor applications such as in kitchens as they are resistant to smoke, grease, and dust. However, unlike dome cameras, people being observed know where the turret camera is aimed at.

Bullet Cameras

What are bullet cameras?
Bullet cameras have a cylindrical shape, come in different lengths and sizes, are capable of observing long distances, and can be fairly noticeable. At a glance, anyone can see where bullet cameras are aimed and focused. Bullet cameras are most commonly used in outdoor applications, so their cases are made resistant to water, dust, and dirt.

What are the features of bullet cameras?
Bullet cameras have most of the features of other cameras (fixed/vari-focal, WDR, IR/EXIR) and while designed for both indoor and outdoor applications, are well suited to outdoor as their design protects the lens and internal components from direct sunlight and the elements.

They are well-built and outdoor cameras are designed to be vandal resistant. Bullet cameras are highly visible so they can also be used to act as a deterrent.

What are the typical use cases for bullet cameras?
They are suitable for outdoor applications such as parking areas, the entry and exit of people or vehicles to a facility. Due to their conspicuous design, they clearly indicate your premises are under video surveillance. They can be easily installed on a flat wall and they have the ability to withstand harsh environmental elements such as sunlight and storms.

Small-sized bullet cameras can be used for indoor applications where discreet monitoring may be needed from a distance, such as in a high-end boutique where a camera directly over the sales counter may not be desirable

PTZ Cameras

What are PTZ Cameras?
PTZ stands for pan, tilt, zoom. PTZ cameras are also called pendant cameras. PTZ or pendant cameras not only contain the lens, but they also let you rotate the camera to get up to 360 degrees of camera rotation when the installation allows for it.

What are the features of a PTZ camera?
PTZ cameras give operators the flexibility to focus and zoom on any object in its field of view.

Some PTZ cameras can be programmed to perform a tour of the area being monitored. The program can also include additional actions such as automatically focussing on specific events such as the opening of a gate or door. Once the area of interest or activity is recorded, the camera can resume the routine tour.

What are the typical use cases for PTZ cameras?
PTZ cameras are designed to monitor a large area, such as a big parking lot or a large indoor space. It is generally advisable to consider using other camera types if the objects being monitored are either fixed or if the area being monitored is relatively small as PTZ cameras are expensive and probably require more maintenance as they have moving parts

Box Cameras

What are box cameras?
Box cameras house the camera lens in a box and have a similar construction found in a bullet camera. Box cameras are among the oldest camera models but continue to be used even today.

What are the features of a box camera?
Box-type cameras allow loss prevention teams to design the camera capabilities needed for video surveillance depending on the application.

For example, if the requirement is for a specific lens type and specification to observe an object of interest, a box camera can be designed to perform just the task.

What are the use cases of a box camera?
Box cameras are typically used for indoor applications. For outdoor applications, a box camera will need suitable housing to protect from heat, dust, and cold.

Box cameras may also be not suitable for recording in the dark or at night as most of them don’t have built-in IR capabilities and rely on a separate IR lighting system.

Box cameras require mounting hardware for all applications and this can add to the cost of installation or deployment when compared to other camera types

Fisheye Cameras

What are fisheye cameras?
Fisheye cameras utilize ultra-wide-angle lenses that are intended to create a wide panoramic or hemispherical image and achieve extremely wide angles of view.

Instead of producing images with straight lines of perspective, fisheye lenses use a special mapping, which gives images a characteristic convex appearance.

A common type of fisheye camera is known as a 360-degree camera which has an extremely wide-angle view of a large area, and produces a circular image. 360-degree cameras are typically mounted on the ceiling.

What are the features of a fisheye camera?
Fisheye cameras are designed to offer a general overview of where things are and what’s happening in a fairly large area under observation. They are not designed to capture the facial features needed to identify specific individuals.

Some fisheye camera models offer image de-warping features designed to remove the distortion associated with a wide-angled view of the video or image. While the de-warping feature generates multiple panoramic views, it is still not suitable for identifying faces.

What are the use cases for a fisheye camera?
Fisheye cameras are well suited for video analytics applications such as tracking the movement of people within a store, engagement with products or displays and creating heatmaps of activity in a particular area of the store

A fisheye camera shown here is used to generate a pathmap of customers who visit the store. A pathmap helps visualize and quantify how customers move within the store to help make decisions on store layout or determine display effectiveness at various parts of the store. Click here to learn more about how security cameras can uncover business insights in retail chains.

2. Implications of camera technology on security solution design

Camera technology has been rapidly evolving and businesses or enterprises looking to set up a video surveillance system at new locations or upgrading their legacy analog cameras now have to grapple with the plethora of technology choices and features.

Loss prevention teams looking to maximize ROI from security investments must tread carefully when designing CCTV upgrades or new installations.

This section provides an overview of the various camera technology options available along with a handy reference table that showcases practical applications of myriad camera features.

Camera types based on technology

In general, cameras can be classified on the basis of the technology that goes into the components and how videos from the camera are processed and stored. Each of these camera technologies has their advantages and disadvantages as outlined in the table below.

Analog Cameras

The original video recording method that stores continuous (analog) waves of red, green and blue intensities.

Traditional analog cameras measure resolution by the number of horizontal lines called TVL (TV Lines). A higher number of lines in an image means better resolution.

Advantages
Has been around for over 30 years. “Tried and true” and total TVL resolution has increased significantly over the years.

Disadvantages
Limited resolution (<720P).

HD Analog Cameras

HD Analog video security cameras deliver megapixel resolution video over coaxial cabling (HD over coax) and use digital vs. analog signals to transmit video.

Advantages
HD analog technology allows you to record megapixel resolution video (1080p, 4K) over standard coax cabling, which is often already installed in your location.

Some benefits of HD analog include lower camera costs when compared to other technologies, simpler installations using the same process already in place for standard analog cameras, and the ability to upgrade or add HD analog cameras while retaining existing cameras.

HD analog cameras come in a wide range of features, styles and form factors, making them easy to fit into any location.

Disadvantages
You will likely need to upgrade your video recorder to be able to add HD Analog cameras. Older analog recorders do not support the HD analog standards.

There are multiple HD Analog formats (HD-TVI, HD-SDI, HD-CVI and AHD) with HD-TVI being the most prevalent. Hence, you must choose cameras and recorders that use the same standard.

IP Cameras

Internet Protocol (IP) cameras are a type of digital video camera that connects to your Ethernet local area network (LAN) and uses TCP/IP signaling to transmit video in a digital format.

Advantages
IP cameras come in a large variety of resolutions (720p to >8MP), form factors, and features giving you great flexibility when designing your surveillance system.

These cameras use the same category wiring (Cat5/5e/6) used for your computer network and can use Power over Ethernet (PoE) to power the cameras.

Many IP camera models support local storage using memory cards and have advanced analytical and AI capabilities available out-of-the-box.

Disadvantages
Often even “compatible” cameras and video recorders have exacting requirements to support the desired functionality.

When using IP cameras, it is considered a best practice to use video recorders from the same camera manufacturer to ensure full compatibility and access to advanced camera features.

IP cameras require ongoing maintenance to keep their operating system (firmware) up to date to prevent these devices, and potentially your network, from being compromised due to security vulnerabilities.

Thermal Cameras

A thermal camera detects infrared (IR) energy (heat) emitted from the object and converts it into a visual image. The resulting image (i.e. a person) is displayed with various colors representing the approximate temperatures on the object.

Advantages
Thermal cameras are specialty cameras designed for very specific applications. Applications include the oil/gas/chemical industry where monitoring for non-visible objects (fire/heat/people) is required.

Most recent applications have been as supplemental devices to assist in monitoring people for higher body temperatures.

Disadvantages
Thermal cameras for monitoring temperature extremes are often application-specific and are often very expensive. Most commercial customers do not have applications requiring these cameras.

Using thermal cameras to monitor body temperatures is often unreliable as ambient temperature and other factors can create issues in accurately measuring body temperature.

Mapping security camera features to applications

The table below offers a comprehensive view of the various security camera features and how these features can be leveraged by loss prevention teams when designing a video monitoring solution.

Security Camera Features Design

Implications for Video Surveillance

Fixed Lens
Fixed lens cameras come with fixed lens focus. They do not have sophisticated moving parts or digital focus adjustment capabilities.

Fixed lens cameras generally cost less. However, they are typically not usable for multiple applications in a design other than what they were originally chosen for due to the fixed focus and limited view.

Varifocal Lens
Cameras with adjustable lens focus that can be calibrated after installation to get the perfect field of view needed for the location.

Allows for one camera model to be used in multiple applications. The same camera can be placed at any location and still deliver the best possible view in each location. This feature allows loss prevention teams to optimize camera layout when needed without having to purchase new devices. Cameras with varifocal lenses have slightly higher costs when compared to fixed lens cameras.

Digital Zoom
Digital zoom crops a portion of the image and then enlarges it. This is not a feature of most cameras, rather it is a function of the video recorder or VMS software.

Digital zoom is an electronic feature of the camera. The user can “digitally zoom” into a smaller portion of the image, much like you would on a mobile phone.

Optical zoom is a mechanical feature of the camera. Cameras with optical zoom have motorized telephoto lenses, allowing the user to remotely adjust the camera lens to zoom-in the camera for a closer view.

While optical zoom magnifies without losing image quality, digital zoom degrades the quality of the image.

Camera Resolution
Typically, commercial security cameras come in 2, 3, 4, 5 or 8 megapixel resolutions. Higher resolutions are available, at significantly higher costs.

If surveillance is required for a modest-sized area to monitor general activity, a 2 megapixel camera may suffice. For high-end stores that may be selling precious jewelry or watches, a camera with higher resolution will be useful.

The higher resolution will allow the loss prevention team to use a feature like digital zoom feature to verify if a store visitor actually slipped the watch into the pocket or read a logo on a shirt or clothing or hat to identify the suspect correctly or even get a proper facial shot.

However, a high-resolution camera is not only expensive off the shelf, but will also need a higher network upload speed to remotely view the high-resolution video and more storage to record the videos resulting in higher operating costs.

When using megapixel cameras, Digital Zoom capabilities are determined by the image width at the target location. A “pixel per foot” calculation is used to ensure that higher MP camera resolutions will be of any benefit in digital zoom.

Dynamic Range
Dynamic range is the measurement of the difference between the whitest whites and the blackest blacks in an image.

Digital Wide Dynamic and True Wide Dynamic cameras offer enhanced dynamic ranges which are useful for specific surveillance scenarios, most often when capturing views of outside a building from the inside by looking through doors and windows. One specific application is capturing people coming in the entry door of your location and wanting to capture facial images.

Cameras with True Wide Dynamic feature are capable of handling highly varying light levels and even capturing images properly against a bright backdrop. For example, cameras with True Wide Dynamic capability are placed inside retail stores facing the doorway. When the door opens and the space outside is under the blazing sun, the camera can instantly adapt to this light condition and manage to capture a clear image of people walking into the store.

Digital Wide Dynamic cameras may not have the dynamic range offered by cameras with True Wide Dynamic feature, but offer a cheaper alternative for loss prevention teams.

Maximum Frame Rate
Frame rate is the speed at which images are shown and is usually expressed as “frames per second,” or FPS. Cameras and Video Recorders have both maximum and minimum frame rates.

Frame rate greatly impacts the ability to capture video effectively. Different frame rates yield different viewing experiences. It is widely accepted that 20 fps is the minimum speed needed to capture video while maintaining realistic motion. Many recorders and cameras used for general security applications have a maximum fps of 30.

More important than the maximum fps is the minimum frame rate. Settings for certain scenes (like a POS station) need to have higher frame rates.

Setting the fps too low can have adverse effects on the ability to capture video of critical events in busy, fast-paced scenes. Some higher megapixel resolution cameras or recorders may limit the maximum frame rate that can be recorded.

Designing a video surveillance solution requires a nuanced understanding of loss prevention objectives, infrastructure availability, choice of camera types, technology or features, and budgetary constraints.

Interface’s team of experienced security experts are available to assist loss prevention teams tackle complex security challenges.

Request a Free Security Risk Assessment

3. Artificial Intelligence Enabled Video Surveillance

Here are some of the ways AI-powered video surveillance is revolutionizing physical security for businesses:

AI-enabled video cameras can detect threats in real-time, enabling immediate alerts for security personnel to prevent incidents like theft or vandalism. Security teams monitoring surveillance cameras can now focus on handling alerts.
AI-enabled video surveillance systems can learn normal patterns and identify anomalies such as repeated visits to areas with high-value merchandise or a group of people congregating in one spot.
AI systems can easily tag videos with high levels of accuracy. Locating a video clip from hours of recording can be done easily to speed up investigations.?
AI solutions can crunch large volumes of historical data to anticipate potential security vulnerabilities, allowing businesses to proactively identify vulnerabilities and optimize resource allocation.

Loss prevention teams looking to install AI-enabled cameras or video management systems that leverage AI should keep in mind the following potential pitfalls:

Privacy Concerns: One of the primary drawbacks of AI-enabled video surveillance is the heightened concern over privacy. Advanced features like facial recognition can intrude on customers’ privacy, raising ethical questions about the extent of surveillance and data collection.
Ethical Dilemmas: The use of AI in video surveillance, particularly with facial recognition or license plate recognition, raises ethical dilemmas. Issues such as consent, profiling, and potential misuse of the technology can lead to public mistrust and backlash.
System Vulnerabilities: AI systems are not immune to vulnerabilities. Hacking and cybersecurity threats pose significant risks, as intruders may exploit weaknesses in the AI infrastructure, gaining unauthorized access to sensitive data or manipulating surveillance outputs.

4. Camera placement best practices for video surveillance

The number of cameras needed for effective video surveillance not only depends on the size of the location but also on what’s being monitored or protected at the location.

A jewelry store may have dense camera coverage to gain complete situational awareness of the movement or actions of people within the store and also be able to identify people. In a casual clothing store, general camera coverage may be adequate.

While there is no thumb rule that can be applied to any location to determine the placement of security cameras, loss prevention teams should consider four questions before designing camera placement:

What do they sell or what are they protecting through video surveillance?
What’s the value of the items being sold or protected?
How easy is it to steal the items being protected?
What’s the likelihood of theft?

Here are a few examples of how loss prevention teams can approach camera placements to address security threats unique to their business.

Industry

Typical Threats

Camera Placement

High-Value Retail

Casing theft
Sneak / Switch theft
Internal theft

Inside entry doors capturing high quality facial images of customers entering the store
Display cases where high-value items are displayed
Register(s) where employees handle cash transactions

Convenience & Grocery

Shoplifting
Hold-up/robbery
Internal theft

Inside entry doors capturing high-quality facial images of customers entering the store, along with Public View Monitors in higher-value goods areas such as health and beauty, baby food, and detergents
POS areas where customer cash transactions take place. Place cameras to capture the faces of customers.
Closed office areas and storage room spaces where employees are are hidden from view.

Restaurants

Hold-up/robbery
Internal theft
Casing

Areas where customer cash transactions take place (POS/Bar). Place cameras to capture the faces of customers.
Rear entry areas (inside and outside) and storage areas, freezers, and coolers where employee theft occurs.
Outside rear doors, areas where employees park, and dumpster areas, to protect employees from ambush or assault.

5. Choosing the right partner to implement a video surveillance solution

Designing a video monitoring system that’s really effective and delivers on what it’s supposed to do is a major challenge. There is a need to understand which camera to use. Camera placement, what features are critical for a customer, and make sure we get the most out of the investment that goes into building a video monitoring solution.

Some of the mistakes that enterprises and businesses make when implementing a video monitoring solution include:

Making a large-scale bet on an unproven solution: Camera technology, cloud data storage, video compression technologies are rapidly evolving. However, embracing new technologies should be carefully calibrated after understanding how a solution that incorporates a new and emerging concept will deliver on the fundamental requirements:
- Can it produce usable video footage in all conditions?
- How quickly can the loss prevention team access the content they need?
- Is it cost-efficient?
Choosing the equipment first: Solution design always comes first. Some customers choose the camera first and then try to build a solution out of it. This is a flawed approach as security requirements should dictate the choice of camera technology and not the other way around.
Stumbling on critical deficiencies after implementation: Some enterprises record videos at very low resolutions and frame rates to save on network and storage costs. However, when video evidence is needed, the recording no longer serves the purpose. For example, the recording may not conclusively show that a person may have actually slipped something into his pocket from a counter! On the other extreme, some businesses implement cameras with 8K bitstreams which is a complete waste of video storage and also reduces the number of days security video recordings can be retained.

The complexity of a video surveillance solution makes it a daunting challenge as there is a mind-boggling array of features and approaches to video surveillance implementations. Hence choosing the right implementation partner is critical for loss prevention teams.

Buyers Checklist for Business Video Surveillance

This checklist is designed to help loss prevention teams review vendor capabilities for implementing or upgrading video surveillance systems.

Video Surveillance Solution Design

Expertise in designing tailored video surveillance solutions that meet the unique requirements of each business location.
Solution design process, considering factors such as camera placement, coverage optimization, and overall system efficiency.
Experience in implementing video monitoring solutions for specific industries. For example, the solution design for monitoring jewelry chains is different from that of a restaurant chain.
The flexibility of the solution design system to adapt to the varying sizes and complexities of different locations along with differing security threats across locations.
Expertise in designing and implementing cloud-integrated solutions for video surveillance.

Camera and VMS Capabilities

Experience in deploying a wide variety of camera types and features such as night vision, smart motion detection, and pan/tilt/zoom (PTZ) to align with the unique requirements of each business location.
Experience in deploying advanced cameras with purpose-built analytics for specific security needs, such as intrusion detection or license plate recognition.
Track record of successfully implementing video management systems (VMS) for businesses of similar size and complexity.
Experience in integrating AI and analytics features seamlessly into their video management system.
Experience in scaling video surveillance solutions to handle a large number of cameras and locations concurrently.
Approach to ensuring continuous video surveillance in the event of network or hardware failures.

Remote Monitoring Capabilities

Monitoring infrastructure, technologies used for monitoring, certifications, and redundancies available at all monitoring locations.
Approach to hiring, training, and retaining remote security teams for monitoring.
Customer onboarding and escalation process alignment capabilities.

Storage, Network, and Security

Experience in designing reliable video storage systems with redundancy measures, including failover strategies and backup protocols.
Approach to managing bandwidth efficiently, especially when utilizing cloud-based storage for video footage.
Strategies for optimizing performance as the system scales, including load balancing and resource allocation./li>
Expertise in building secure networks for video surveillance, including encryption protocols and network segmentation.
Experience in protecting video storage from unauthorized access or cyber threats.
Knowledge and adherence to regulations related to network security, data storage, and NDAA compliance for video surveillance systems.
Compliance with industry-specific or location-specific regulations that may impact network design for video surveillance.

Other Considerations

Size and scale of services offered by the vendor and ability to deploy cost-effective camera hardware and networking equipment.
Partnerships with camera and network OEMs and preferential access to the latest technologies.
Ability to offer visibility on project progress and ongoing management of security hardware and assets via online customer service portals.
Support services offered and SLA guarantees.
Training provided to employees at the location being monitored and the loss prevention teams managing the program.
Ability to deploy onsite support teams at all locations where video surveillance hardware is being deployed.
Commitment to staying abreast of advancements in video surveillance, remote monitoring, networking, and storage.

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About the author

Don Fruhwirth

Director Product Management

Don Fruhwirth is Director of Product Management at Interface Security Systems. He brings more than 20 years of expertise in security integration strategies, next-generation networking design and wireless system architecture. Don has enabled numerous enterprises in transforming their IT and asset protection system infrastructures. Don is an industry thought leader and frequent speaker on topics such as SD-WAN, cloud video architectures, remote video surveillance and advanced network security. Prior to joining Interface, Don has held senior solution engineering positions for regional security and global cellular telecommunications companies. In addition to his security background, Don holds advanced networking certifications from Cisco, Fortinet and Cradlepoint.

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People Counting System – The Complete Guide for Enterprises

Steve Womer — Wed, 04 Jan 2023 16:21:57 +0000

Steve Womer

SVP, Engineering

Business Intelligence Video Analytics

People Counting System – The Complete Guide for Enterprises

Introduction

What is a People Counting System?

Enterprises use people counting systems to track or measure how many people are in a location or space such as a retail store or office space. People counting helps enterprises make critical decisions on how to utilize the space efficiently, drive sales, improve customer experience, manage queues more efficiently or ensure safety, to name a few.

Previously, people counting was done manually by an employee stationed at entrances and exits with a people counting device (also known as footfall counters) such as a hand clicker.

With the availability of new and more modern approaches to people counting, enterprises can now choose from a variety of people counting sensors and solutions such as video cameras, thermal sensors, Wi-Fi, or Bluetooth beacon sensors.

We created this guide to help enterprises implement a robust people counting solution that’s completely aligned with the organization’s business requirements and goals.

Use Cases for People Counting Systems

In addition to offering real-time data, people counting solutions can also create a rich repository of historical data that can uncover valuable business insights. The table below highlights how different industries utilize people counting systems to optimize space, improve customer experience, monitor compliance, and increase revenues.

Customer behavior and store design
Merchandising
Marketing campaign performance
Customer service
Security or loss prevention
Compliance, health, and safety

Industry

Applications

Retail Chains

Real-time: Monitor real-time entries and exits to optimize staffing, and measure the success of marketing or promotional campaigns. Identify high-traffic areas that need extra attention from employees to keep the areas neat and enticing to shoppers.

Long-term: Evaluate main footfall and customer distribution over multiple departments or areas of interest and reallocate staff, greeters, or customer service agents to increase staff/customer engagement. Track low-traffic departments and areas of interest to uncover possible indicators for lack of interest and shape future marketing or promotional campaigns.

Convenience Stores

Real-time: Monitor occupancy for compliance regarding maximum occupancy dictated by health regulations (such as COVID-19) or fire regulations and temporarily restrict access for new customers accordingly.

Long-term: Monitor peak and slow times to adjust opening hours based on time of day, seasons, events, or other periodic events. Use path map visualizations to learn where customers go when they come in and set up displays for better marketing, product placement, or security.

Restaurant

Real-time: Use footfall count to quantify the requirement to call in more employees due to an unexpected increase in patron numbers. Compare footfall numbers against recent days to identify the possible reasons for the increase.

Long-term: Forecast staffing levels more consistently based on historical footfall traffic and identify when temporary hires might be needed. Use kitchen footfall counters to optimize chef stations usage and reduce the time needed to send out orders.

Showrooms

Real-time: Observe employee effectiveness based on traffic patterns and dwell times. Redeploy employees based on customer numbers and bottlenecks.

Long-term: Determine which items in the showroom attract more visitors, discover the popular areas of the showroom, and adjust product placement. Evaluate employee effectiveness by comparing dwell times and individual sales conversions.

Coffee Shops

Real-time: Reallocate employees from back-of-house to front-of-house based on real-time entry data and optimize the order taking/payment and barista/fulfillment balance.

Long-term: Analyze traffic, sales, and employee performance by the hour, day, week, and month to optimize opening hours and staffing allocation. Use data to increase sales, test promotions, and ensure customer satisfaction.

Shopping Malls

Real-time: Observe bottlenecks and monitor occupancy to create better traffic flow and improve customer experience. Monitor suspicious customer activity and redirect security as needed.

Long-term: Compare overall footfall counts and time of day to optimize operating hours. Compare area footfall counts to individual store entries to discover opportunities for shop diversification. Consider moving high-traffic shops to encourage shoppers to explore more of the mall. Monitor the food court usage and restaurant display count to discover which vendors are generating more sales and which new ones to consider inviting.

Car Rentals

Real-time: Prepare for large influxes of possible travelers heading to car pick-up areas based on footfall traffic numbers at a specific location in the terminal. Allocate shuttles and employees to assist customers with rentals instead of other administrative duties.

Long-term: Analyze the use of space, waiting areas, counter design, queue location, temporary luggage storage, and other areas based on historical traveler traffic data. Renovate internal customer-facing areas to allow for better customer experience and optimize back office areas for staff.

Hotels

Real-time: Monitor the influx of unexpected big parties and automate the reassignment of employees to the front desk to expedite check-ins and registrations, ensure luggage carriers and valets are ready, and mitigate any other possible guest frustration.

Long-term: Track historical patterns of hotel guests by the time of day and day of the week to forecast employee schedules and hiring needs. Observe guest amenity usage counts such as the lounge, restaurants, and pool to plan future usage, expansion, and renovation as required.

Banks

Real-time: Adjust the availability of bank employees in real-time based on customer entries and dwell times.

Long-term: Compare customer traffic numbers to opening hours and service offerings to discover insights or changes that can be made to optimize the customer experience. Analyze traffic patterns and dwell times and locations to reposition service locations internally to create better customer traffic flow.

Hospitals

Real-time: Monitor the occupancy in public-facing areas to comply with health capacity regulations. Monitor capacity of patient waiting areas to reduce overcrowding and direct employees to appropriate locations to pick up patients. E.g., If patients were directed to an overflow area, employees will know to find patients there instead of in the main waiting room.

Long-term: Evaluate the use of popular areas of interest like the entrance foyer, waiting areas per department, pharmacies, etc., and adjust space to accommodate future traffic. Monitor low-use employee areas to prioritize new expansion or conversion for high-use services or areas.

Airports

Real-time: Observe changes in traveler densities at critical pathways or bottlenecks, empower management to reroute foot traffic and staffing distribution to alleviate densities. Sensors allow minute-by-minute monitoring of traffic flow changes to ensure positive outcomes.

Long-term: Analyze historical data to efficiently forecast traffic patterns (daily, weekly, seasonal) to allow for more accurate budgeting and staffing needs. It can also support expansion proposals for heavily used access and traffic points, ensuring needs are met in anticipation of actual requirements.

Casinos

Real-time: Monitor high-use gaming areas or stations and reassign employees to better accommodate potential clients. Enforce capacity limits in high-traffic areas to ensure adherence to capacity laws and other local guidelines.

Long-term: Evaluate traffic on a seasonal or event basis, such as local holidays, trade shows, or professional sports events and redesign gaming layout and traffic patterns accordingly. Redesign gaming locations based on use and forecast future expansion/contraction of other game-play models.

Large Venues / Sport Venues

Real-time: Monitor traffic patterns at entrance gates and other areas where bottlenecks occur, such as theater or arena entry, where ushers verify patron tickets. Redeploy staff, ushers, and security to optimize flow.

Long-term: Forecast staffing and hiring levels based on past events and avoid unnecessary wait times and lower customer satisfaction. Compare overall occupancy to observed traffic at areas of interest like concession stands, retail locations, and VIP areas to determine sales and revenue conversion rates.

Museums

Real-time: Monitor sudden traffic spikes in real-time that could negatively impact environmental guidelines for the artifacts and redirect security or docents to disperse crowds or redirect people to other parts of the museum.

Long-term: Report on the overall use of space based on footfall traffic and broken down by exhibit type, artist name, or other categories. Compare footfall traffic to ticket sales and revenues to forecast exhibit success and plan for future exhibits.

Smart City / Outdoor Venues

Real-time: Monitor traffic patterns to prevent overcrowding public places by sending park employees proactively to those locations. Open/close access points to remove bottlenecks. Automatically send social media messages through corporate accounts to advise patrons of potential wait times and increase satisfaction rates.

Long-term: Track outdoor visitor trends in parks, recreational facilities, and hiking trails over time, during specific weather patterns, or outdoor events. Develop occupancy stats and trail usage to determine when to shift hiking trails or other outdoor amenities to prevent overuse. Compare footfall traffic to local retail and businesses in the area. Use data to partner with municipal and local business improvement groups to monitor business health, track engagement during special events.

In most cases, it is impractical for enterprises to hire and retain in-house teams to perform all of the above tasks.

Unlike enterprises with periodic spurts in demand for network management skills, managed network services providers are able to deploy their teams across multiple client engagements giving them the ability to hire, retain and motivate a broad group of network engineers with diverse skill sets.

Looking Back and Keeping Up

Here is how retail chains can leverage video analytics to access historical and real-time data.

Long-term data

The image shows historical footfall count data juxtaposed with data from the current week. This information can then be tied to a variety of factors such as weather, promotions, and holidays.

Real-time data

The image shows the real-time heatmap of customer interactions with various displays in a retail store. This data can be used in real-time to make adjustments to the display for better product engagement.

How to Implement a People Counting System

Implementing an enterprise-grade people counting system involves choosing the right sensor, mapping business goals to key metrics, and setting up an organization that’s designed to leverage the people counting data insights. The following sections offer an in-depth review of all the key aspects of the people counting solution implementation milestones.

1. Select the Right Type of People Counting Sensor

Every people counting sensor type is designed for specific use cases and applications. The table below outlines the pros and cons of all the major people counting sensors typically deployed by enterprises.

People Counting Sensor

Applications, Pros & Cons

Video Camera Sensor

Pro:
Gathers precise information on the movement of people within its field of view allowing for a wide range of data collection.

Tracks entry and exit data in real-time along with all other engagement metrics such as walk-in data, dwell time, hotspots, and path maps.

For most applications, existing security cameras can function as the people counting sensors reducing the cost and complexity of implementation.

Con:
For certain edge cases, existing security cameras may not be able to recognize images. For example, high contrast areas, or areas with poor ambient lighting. In such cases, expensive 3D Cameras may be needed to plug the gaps in coverage.

Best use:
Any business looking to analyze foot traffic and activity for advanced analytics requirements where people tracking accuracy is critical.

Thermal Sensor

Pro:
Low-medium cost, easy installation. Adaptable to complex entrances with multi-directional people movement. Does not capture any personally identifiable information.

Works well in darkness, bright areas as well as in places with reflective surfaces or walls.

Sensors are often discrete and can track a wide area, translating into fewer sensors.

Con:
Doesn’t allow for in-depth analytics of customers and their behaviors such as dwell times or path maps.

Sensors placed outdoors or in harsh environmental situations will deteriorate faster, requiring replacement more often.

Best use:
Any business looking to analyze foot traffic, maintain capacity limits, or those wanting to maintain the privacy of patrons and customers, such as healthcare clinics and related services.

Infrared Sensor

Pro:
Accurate even for large and fast-moving groups of people.

Relatively easy installation with one-time calibration or verification.

No personally identifiable information is captured. Can work in a wide range of lighting conditions, unaffected by shadows and busy patterns on the floors.

Con:
Requires optimal placement to be effective – ideally above the area to be tracked.

Best use:
Locations where accuracy matters, such as venues with local capacity limit laws, shopping centers, libraries, museums, parks, and outdoor leisure centers.

Wi-Fi Beacon Sensor

Pro:
Tracks customer activity based on their identity, hence it is suited for targeted communications and promotions based on where the customer may be located.

Low cost of implementation as fewer WiFi sensor devices are needed.

Con:
Accuracy is tied to customer mobile device capabilities and settings. Cannot be used for tracking product interactions as position accuracy is limited.

Reliance on working Internet connection in the location.

Privacy issues as tracking is completely based on customer identity.

Best use:
Large retailers, shopping malls, logistics warehouses, and other vast spaces where people count is needed and location inaccuracy is not an issue, and WiFi-enabled devices are generally available with most individuals.

Bluetooth Beacon Sensor

Pro:
Reasonably priced.

Easily scalable for larger locations. Easy self-installation, and battery-powered.

Can push customized messages to customer smartphones.

Con:
Accuracy depends on customer mobile device capabilities and settings.

Technology based on personally identifiable information.

Accuracy in tracking the precise location of people is limited.

Best use:
Locations with a high probability of Bluetooth-enabled devices, such as shopping malls or other retailers.

2. Identify Sensor Installation Parameters

Choosing the right hardware also depends on the individual needs of the space you want to count people in. Here are various factors that can impact the choice of the sensor, their placement and the number of sensors needed.

Installation Parameters

Considerations for the choosing sensor

The size and type of door

Is it a swing door, revolving door, or an open entrance like that’s used in a mall store?

The area where people are to be counted

Is it a doorway, open area, or aisle?

People behavior

Do people linger in the area where they’re to be counted?

Do they stand still, or are they moving? E.g., They’re mostly stationary at the checkout counter, but in the aisles, they move more.

Do they enter in groups or individually?

Sensor requirements

Is there a maximum number of sensors you can place in a location, either due to store or sensor technical limitations? E.g., Some sensors can only connect to 3 or fewer sensors, while others have no limits.

Does the sensor have a height or placement limitation? E.g., Many thermal sensors have a distance limit in which they work, such as a maximum of 12 feet away, while mono video cameras may have a camera angle limitation and must be placed in a fixed spot.

Is there a temperature issue with the sensor location? E.g., Outdoor locations will require specialized sensors that can withstand the temperature differences.

Is there enough light in the location you wish to count people? E.g., Brighter lights at a retail entrance may disrupt some sensors, while a dark corner of a stockroom may prevent accurate counts for others.

Doing More with Less

In small-sized retail stores, the fisheye camera is a great option to get a complete overview of an entire store to feed data into a video analytics application. This is a great way to minimize the number of sensors (cameras) needed to capture data needed for people counting analytics. The image below shows visitor path map analytics superimposed on the video snapshot of the store.

3. Plan for Bandwidth and Power Requirements

The technical requirements of the people counting hardware and your physical location will determine which option you choose. Each hardware type comes with requirements, such as power, bandwidth, mounting location, and more.

Video cameras, when used as people counting sensors use more power and bandwidth when compared to other types of people counting sensors. However, when you leverage existing video surveillance infrastructure, video analytics gives you a headstart as the implementation is relatively easy and the cost of maintaining the video camera network is already budgeted for by loss prevention teams.
Some thermal counting sensors run on high-energy lithium batteries, giving them a 1-2 year battery life. Thermal counters consume less bandwidth as they capture limited data and don’t require as much computing power. Like advanced security cameras, many of them have Power over Ethernet (PoE) capability.
Most sensors record data and store it locally before sending it for analysis. Several video camera sensors have various frame rate options (from 4 to unlimited frames per second), each requiring different bandwidth capabilities.
Others located in inaccessible locations such as outdoor parks or large warehouse facilities with minimal power outlets availability require larger local memory storage to store data offline until it can be transmitted.
Offline recording is also vital for hardwired sensors in the case of power or other outages. Data should still be collected and stored, ready for transmission when services are restored.
For networked sensors, wifi connectivity may be needed and the ability to connect to a cellular network will be a bonus feature. However, some building locations block wireless signals more easily than others, so this will need to be tested to ensure functionality.

4. Evaluate Data Sharing and Integration Capabilities

The true value of a people counting solution is directly related to its ability to generate data in a form that can be ingested into reports or dashboards in real-time.

While long-term data gathering and trend analysis is useful, real-time data streams can surface critical business insights that can potentially help enterprises anticipate changes.

For instance, historical data from the people counting solution in a retail chain might indicate that before a hurricane hits, dwell time and footfall stats at aisles selling canned food and beer are fivefold the median values. This is indeed valuable and can help retailers stock these products in greater quantities based on weather.

With real-time people counting data that are correlated with KPIs, a retail chain may be able to adjust pricing and product assortment on-demand and thus make inventory replenishment proactively before the demand slumps or spikes for any reason.

When choosing a people counting system, here are some of the key considerations to evaluate data analytics and integration capabilities.

Data availability: The data generated by the people counting solution should be easily available for analysis and reporting via the cloud or the LAN. In distributed enterprises such as retail chains, on-demand data availability via the browser is preferable considering the need to analyze data from multiple locations in real-time by diverse stakeholders.
Role-based access: The use cases for data generated by people counting applications cut across different departments and user roles in the enterprise. For example, a retail chain may find the people counting data being shared by marketing, merchandising, loss prevention, operations, and HR teams. Hence, role-based access, preferably through enterprise active directory integration, is a critical feature.
API integration: Accessing the data generated by people counting sensors via legacy reporting solutions, custom dashboards and ease of integrating people counting sensors directly with other applications in the enterprise directly or via an Enterprise Service Hub (ESB) are important decision points. Hence, having a well-documented API is a must for any people counting solutions.
Secure sharing: Considering the wide range of applications and use cases for leveraging data generated by people counting sensors, the option to securely share confidential data and reports with external teams (vendors, service providers) with advanced security features like password-protection and policy-based access controls are a must-have feature.

5. Map Sensor Data with KPIs

Mapping data generated by a people counting solution to key performance indicators (KPIs) allows enterprises to uncover the insights that drive business decisions and growth.

Here is an example of how this mapping can be done for a retail chain planning to implement a video analytics people counting solution for its stores.

KPIs

Business insights from people counting sensors

Sales per square foot

Power up underperforming locations
Not every store location is profitable, but it may cost more to close the underperforming ones. To power up the location, combine the Sales Per Square Foot KPI with footfall traffic numbers and Conversion Rates to identify products or services that sell well there and create targeted marketing campaigns for them

Footfalls

Understand what’s driving footfalls
A viral video or an ad campaign may drive people into stores. With people counting solutions, enterprises can combine visual paths, heat maps, and store footfalls to identify popular items along with the context for their popularity. Store managers can create new store displays, adjust pricing, and order more inventory to meet the demand.

Conversion rate

Discover which promotions work best
The 50% off sale in a store almost always does well. But what about a “buy two, get 20% off” promo? Or something even more creative? Without testing and tracking promotions, retail managers will never know what works in their location. By combining footfall traffic, Units per Transaction, and Promotion Conversion Rates, you’ll know which promo works better. Then, you’ll be able to schedule similar promotions in the future whenever you need to bump up sales. Compare item Sell Through rates for in-person and online products to see how other in-person elements affect sales numbers compared to discounts offered only online.

Shopper dwell time

Optimize store layout or design
Optimizing store layouts are hard to do without data. Set up people counters in aisles and departments to start gathering footfall traffic data and dwell times. Compare it to Item Sell Through rates to see how the sales of items from those sections compare to the rest of the store. Move merchandise to higher-converting areas to increase sales of underperforming items or try the opposite to encourage customers to visit under-performing areas of the store.

Return rates

Address gaps in the return process
Returns are never a good thing for retailers, but they’re even worse when they take employee time away from new sales. Look at the Rate of Return numbers and Shopper Dwell Times at the return counter to identify the issues in the return process. Managers can improve the return training programs for employees or review the return policy.

Checkout lane or kiosk productivity

Monitor checkout performance
Many grocery stores have added self-service checkout kiosks to reduce checkout bottlenecks. But do they work? Combine footfall traffic, time of day usage, and Units Per Transaction to discover if they are. Plus, it’ll tell you how to optimize the store layout near the kiosks, whether you can adjust staffing schedules, and more.

Similarly, the number of people completing the checkout successfully and average queue dwell time to complete the checkout can be tracked to optimize checkout staff based on time of day or day of the week.

6. Build a Data Governance Strategy

The value of data generated by people counting systems increases exponentially when data is integrated into existing dashboards that bring together data from a variety of enterprise applications such as POS (point of sale) systems, inventory management, and security systems, to name a few.

Maintaining data definition consistency and accuracy across the enterprise is critical to ensuring the success of data-driven, cross-functional programs such as a people counting implementation.

Here are some of the critical factors that define the success of a data governance strategy:

Considerations for data governance

Real-world implications

Data preparation costs & benefits

Ability to track the time and effort to identify data sources, address data errors and make a “clean” version of the data available for reporting and analysis.

An enterprise with a well defined data governance model will be able to:

Rapidly import data from a people counting solution into an existing dashboard.
Determine project success or failure early in the project.

Data quality impact on revenue and cost

A system to flag revenue leaks and costs associated with incorrect data and errors in processing data accurately.

If inventory decisions are made because of an erroneous report from a people counting sensor, it may have serious consequences for the business.

Organization structure

A matrix organizational structure with functional leads and managers working in close collaboration with product teams will result in better data quality.

Product category owners in a grocery store can collaborate with marketing as well as merchandising teams to define processes to verify data accuracy from people counting sensors or fine-tune sensor implementation to address gaps in data collection.

Data quality for critical applications

An incremental approach to addressing data governance challenges with a focus on tackling data challenges for high-priority applications has a better chance of success when compared to a big band approach.

A people counting system could be implemented to first demonstrate results for marketing and merchandising teams before leveraging data for loss prevention use cases. This approach will result in a time-bound implementation of data governance models that can then be applied for other functions.

Regulations and compliance

A clear understanding of regulatory requirements and compliance needs is critical when implementing a people counting solution. Any personally identifiable information (PII) should be masked for certain categories of users and should be made available on a need-to-know basis.

A retail chain implementing a WiFi-based people counting technology has to decide who will have access to customer details when analyzing in-store footfall traffic.

Privacy Matters

Ignite Prism’s video analytics solution has an intelligent privacy filter that ensures videos of customers are automatically masked even before they are recorded by the cameras. Users still get to see customer activity such as hot spots and dwell time with guaranteeing absolute customer privacy.

Start Your People Counting Project Here

Interface’s proven video analytics solution is the easiest way to implement a robust and scalable people counting solution. With Interface, multi-location enterprises can turn their existing security cameras (and that includes most legacy analog cameras) into a powerful business tool.

Zero installation of any sensor or hardware for most counting applications
Optimize staffing levels based on real-time customer data
Proactively plan product inventory based on real-time customer behavior trends
Evaluate the effectiveness of marketing campaigns and track in store conversion
Reduce audit and compliance costs

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Steve Womer

SVP, Engineering

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