Retail Trends

Owners and mangers of retail businesses have long known that it is a very fine line between profitability and loss in the retail marketplace. Given the fickle nature of consumers, the predictions of ‘what’s hot and what’s not’ by marketing firms, booms and busts in merchandizing strategies and the ever present need to make a store look ‘fresh’ but not ‘changed’, retailers perform a juggling act of these and many other business facets to draw and keep customers.

Many business owners understandably feel that if they meet the needs of the market and their customers, then profitability is a foregone conclusion. Yet according to Florida criminologist Richard C. Hollinger, Ph.D., there is another major obstacle for retailers to overcome: inventory shrinkage.

The most recent National Retail Security Survey released by the University of Florida and directed by Professor Hollinger has found that inventory shrinkage has taken a dramatic upswing. The year 2000 saw retailers nationwide lose an estimated $32.3 billion dollars to unaccounted products, an increase of more than 10% over the previous year. Where is it going? The study shows that the single largest source of inventory shrinkage is employee theft.

Employee theft has grown disproportionately to all other sources of inventory shrinkage, accounting for nearly one half of all product losses according to the National Retail Security Survey. The findings of the survey found that avenues for shrinkage were: employee theft, 46%; shoplifting, 31%; paperwork errors, 17.6%; and vendor theft 5.8%.

How retailers are combating these escalating losses varies from industry to industry, and from company to company. There are many strategies to stemming the flow of products out the side door and into backpacks and lunch sacks. Most companies have several programs operating simultaneously, implementing controls and raising awareness. But the most notable tactic that retailers are adopting is the use of closed circuit television (CCTV) monitoring systems.

CCTV and Technology

Results in the Quebec Retail Security Report 2001 show that the number of retailers utilizing a CCTV system has grown by more than 64% between 1998 and 2000. In the United States, it is believed that CCTV has witnessed even greater growth in the retail sector, with a strong movement away from the traditional time-lapse VCR solution, choosing instead a more technologically advanced solution: Digital Video.

FocusMicro leads the monitoring and surveillance industry with its line of Digital Video Servers. Digital Video Servers far exceed the capabilities of traditional analog VCR systems, displaying and recording crisp, clear, distortion-free color video. The digital technology allows the simultaneous review of video history while continuing current recording activities. The combination of Digital Video Servers and broadband communications provide users with the ability to remotely view video history and monitor cameras from any computer with an internet or authorized LAN / WAN connection.

FocusMicro systems also include a highly adjustable motion sensing technology, allowing managers and security personnel to monitor customer traffic patterns, shopping habits and restricted area access. Configurable alarm systems provide a broad range of reactions to customer defined scenarios, from text messaging notifications to managers to emergency voice calls to police.

Improving Security
There is no one single strategy or technology that can be cited to improve security in the retail environment. Retail stores are as varied as the products that they sell, catering to the full spectrum of customers and offering a wide range of shopping experiences. Every retail store should have a comprehensive security program that has been fully implemented and tested.

Effective security programs take many factors about each location into account. Some factors can be controlled or affected by managerial strategies while others are simply an integral part of the nature of the business. Some of the items to be considered by a security program are:

Customer demographics Geographic and civic location Store layout Merchandising strategies Self Service vs. assisted shopping

Administrative policies & procedures Entrances and exits Inventory characteristics Transaction volumes Warehousing strategies

FocusMicro provides a full array of security services including Security Consulting and Security Criteria generation. With a staff that is both knowledgeable and experienced with the specifics of retail operations, FocusMicro can review, enhance or develop security programs for any retail organization. Our current retail customers span from small, single location companies to Fortune 100 corporations.

Security Program Goals

While the most obvious goal of a security program in a retail environment is to reduce inventory shrinkage, there are several other benefits to having a well thought-out and executed program in place.

• Employee Training – A well planned and executed CCTV system provides thorough coverage of all key areas in retail business, providing managers with the ability to record employee activities that are outstanding, typical and needing improvement. A FocusMicro Digital Video Server allows managers to quickly and easily locate specific incidents that can be exported into a separate video file or printed in a series of still photos.

  These types of managerial tools can be used as a positive reinforcement mechanism for existing employees and as orientation training for new employees. The benefits to employers from this highly specific feedback are:

  • Enhanced customer service
  • Better adherence to administrative procedures
  • Improved workplace safety

• Minimizing External Threats – No other scenario is as terrifying as the prospect of armed robbery. However understanding the contributing factors leading up to a robbery can aid managers in largely preventing the likelihood of such an event.

  Studies of robberies and interviews with convicted felons have shown that robberies are seldom random. They are rather the result of research and investigation by thieves. Perpetrators carefully weigh the “risk vs. reward” factor to determine their targets. A higher risk factor in committing a robbery at a particular location will motivate them to seek an easier prey. Studies have shown that a visible CCTV installation is an effective deterrent to robberies. A Digital Video Server from FocusMicro provides amazingly crisp and clear video images, further encouraging would be thieves to look elsewhere.

• Eliminating Check and Credit Card Fraud – Retailers nationwide have learned to accept that transactions performed with bad checks and stolen credit cards are just a cost of doing business. With the advent of FocusMicro integrated systems, this is no longer true.

  One of the more frustrating and difficult aspects of this problem is proving a suspected perpetrator’s guilt. Traditional VCR systems delivered notoriously poor images that were rarely conclusive in establishing identity. Now with the implementation of a state-of-the-art FocusMicro Digital Video Server, retailers can reproduce remarkably clear video clips and still images of customers. Used in conjunction with Point-of-Sale systems and Data Mining capabilities, precise video date and time stamps allow managers to conclusively document an event, making restitution and prosecution a certainty, rather than an unlikely hoped for occurrence.

All retail organizations suffer from inventory shrinkage, administrative errors and the threat of criminal behavior. Start getting control of your business with a detailed security review by FocusMicro. To schedule an appointment, contact your FocusMicro sales representative today.

Technology’s Impact

Technology applications in the security sector are rapidly changing the face of security strategies. Advances are being made in literally all facets of the security industry, including Surveillance, Access Control, Intrusion Detection, Asset Tracking and Data Mining.

Huge improvements have been made in accuracy, capabilities and almost most important of all: usability. Today’s security systems provide results and give managers control that would have been impossible just a short time ago, yet require no special training or technical skills.

Because of technology’s rapid advancements, security programs must be reviewed and updated on a regular basis. The expanding capabilities that technology brings combined with cost effective implementation strategies require that security programs are updated annually. FocusMicro can provide your retail business with consulting expertise and technology solutions that will improve the safety and security of your company while improving on your bottom line performance. FocusMicro services include:

• Facility And Perimeter Security Analysis, providing a detailed assessment and security criteria generation
• Security And Surveillance Systems Design that implementing technological solutions that replace or mate with imbedded systems
• Security Systems Installation, Support And Maintenance, providing equipment, installation teams, permit compliance and contractor management
• Project Management for programs that range in scope from single facility enhancements up to the implementation of nationwide corporate security initiatives
• Training and Development for end users, security system administrators and Loss Prevention and Safety Program personnel

All retail organizations suffer from inventory shrinkage, administrative errors and the threat of criminal behavior. Start getting control of your business with a detailed security review by FocusMicro. To schedule an appointment, contact your FocusMicro sales representative today.