The Imperative of having a loss prevention solution in place for Retail and Hospitality
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Introduction
Loss through shrinkage in retail, has become almost a $100bn issue for the retail industry globally and this number is growing yearly. Retailers have put processes and people in place help minimise this loss but are finding it is not enough when needed at scale. As a result, retailers are increasingly turning to technology to augment traditional loss prevention methods. The challenge with some of the existing technology has been is that it focusses more on recording and analysing the amount of loss( shrinkage) and not about mitigating it. For retailers’ loss prevention is now a business imperative and retailers are turning to technology to identify how the loss is happening, when it is happening and also how to combat it real-time.
One of the key technologies that is impacting loss prevention rates positively is Computervision ( Computer vision is part of AI that trains computers to capture and interpret information from image and video data) Linking this up to existing as well as new cameras means as a retailer you now have a solution that is combatting some of the main elements that impact loss. One of the key locations where loss is seen is at checkout, be that manned or self-checkout.
Loss Prevention at Checkout
Although physical resource would have built the knowledge and know how to spot possible loss be that scan avoidance, sweet hearting, customer not present etc a significant amount will be missed when the retailer is busy as well as at where there are significant checkouts.
Retailers can get insights on the checkout process by integrating AI into their video and scanning systems to predict patterns, and gain a better understanding of how theft occurs. Self-checkout machines equipped with AI algorithms can spot irregularities during consumer checkouts, flag suspicious transactions, and notify personnel of possible shoplifting in progress.
Not getting your loss prevention technology in place right can negatively impact your bottom line as a retailer.
So why is the impact of this so significant ? Not only does this impact sales and profit but it can lead to challenges with you supply chain . Imagine you think a product is in stock but actually the stock level is lower due to loss. This means a customer may be coming in store to buy something that everyone thinks is in stock but when they arrive it is not actually in stock . This could result in the whole basket sale being lost and too much time being spent looking for a product that does not exist . Taking this further it means your stock levels in your supply chain are incorrect, your demand forecasting may end up wrong which means you don’t forward order enough stock.
Combatting Loss – So how is technology helping and who are the leaders in this area ?
We are seeing some leading players coming to the fore using computer vision technology, using existing and new camera estates to build AI models to catch possible loss as it occurs. Companies like EVERYANGLE have already come to market with a suite of loss prevention models . They have taken it one step further and integrated with POS data to provide also the impact on everything from store revenue to correlation between times of loss prevention and stock levels to store performance . EVERYANGLE recently signed a deal with one of the global retail software players, SAP Retail, to provide an end-to-end solution.
Whatever the loss prevention you are trying to combat you will find organisations like EVERYANGLE have a computer vision AI based solution to assist you in driving loss prevention. The key of course is the accuracy of these models . Too many false positives can impact your reputation with staff and customers alike . Companies like EVERYANGLE have very high levels of accuracy to the point you could even use the technology to prompt customers to even rescan.
What is the impact on staff?
AI does not replace the staff necessary to manage successful loss prevention systems but rather supports retail employees in better understanding the risks and implementing the right technologies to manage loss and improve the customer experience. Retailers should be investing in the proper training to help employees maximise the benefits of AI in terms of store performance and operations.
Everyangle Deep Dive
So, let’s delve deeper into EVERYANGLE and their platform and how it is impacting loss prevention EVERYANGLE’s platform uses computer vision and machine learning to analyse CCTV footage for events of interest, without the need for human review.
Look around in any store and you will see CCTV in operation. EVERYANGLE’s platform analyses video footage rapidly and cost effectively at-scale to help retailers, hospitality providers and fuel station operators gain rich in-store customer insights, reduce loss and optimise their operations.
With the EVERYANGLE technology having the ability to identify checkout loss, cost effectively at-scale it can deliver significant cost mitigation that drop straight to a retailer and hospitality operator’s bottom line.
EVERYANGLE’s platform identifies scan avoidance events at self-checkout, spots suspicious refunds, voids and card activations and reduces the cost of investigating suspicious transactions at checkout by 90%.What this means for the retailer is increased store profitability, optimised store operations with automated detection of Customer-not-Present fraud, Sweet-Hearting and Scan Avoidance at Retail Point of Sale.
Conclusion
The Retail Loss Prevention solution combines transaction data from your retail point-of-sale system with image intelligence gathered from cameras, to identify whether customers and retail associates are engaging in suspicious transaction activity. This automated detection approach empowers Loss Prevention staff to accurately identify a higher percentage of fraudulent events, while eliminating the cost and effort of reviewing endless hours of CCTV video footage.
Unlike other vendors, EVERYANGLE have invested in building our own proprietary machine learning algorithms and custom datasets when developing our Retail Loss Prevention solution. It is this investment that delivers greater capability and accuracy than you can expect from other ‘one size fits all’ solutions.