Technology and the intelligent use of technology must be harnessed to effectively tackle the age-old problems of shrinkage and rising crime in South Africa's retail sector.
This was the key message coming out of the Retail Risk 2008 conference held in Cape Town, Durban and Johannesburg in February and March this year.
Players in the retail sector came together at the conference to discuss best practice and thought leadership around security in the sector.
Delegates agreed that the risks are the same as they have always been: losses due to shrinkage and danger to life and limb in the form of armed robberies. The most recent crime statistics suggest that armed robberies at businesses, of which retailers make up a large proportion, are on the rise.
In light of these risks, Michael Broughton, director of the Consumer Goods Council, suggests that employing the latest in security technology is now a non-negotiable for retailers.
"Technology can - and does - play an increasing role in addressing these risks," says Broughton. "Retailers face a tricky paradox - their stores need to be open and inviting to customers but safe and secure at the same time. The shopping experience is about atmosphere and enjoyment; you cannot have a bank-like environment where people come into a shop one at a time and have their handbags searched."
Using intelligent, integrated security that is smart enough to catch criminals and prevent crime, but unobtrusive enough so as not to ruin the crucial retail atmosphere can resolve this paradox.
Adapting and updating
Today's smart security solutions include the tried and tested tools of the trade like CCTV and guards, but retailers can now complement and improve these with a host of modern intelligent technologies.
By adding video analytics to existing CCTV systems, for example, an old, and often outdated, crime deterrent device can be transformed into an intelligent tool capable of making important judgements and storing vital information.
The analytics and algorithms actually allow cameras to monitor and track human behaviour and recognise suspicious activities. This eliminates the need for 24-hour realtime monitoring of footage - which has proven to be ineffectual time and again. Control room personnel can now be automatically alerted to a potential risk before the crime even occurs.
Through smart integration, CCTV cameras can now also be linked to other elements of the shop set up, such as point of sale equipment. This means that every time a void or a refund is processed by a cashier, a camera will automatically focus on that specific till. If a crime was indeed committed, it will have been recorded, which will make prosecution easier.
Keith Alexander, executive: risk management for the Spar Group and member of the CGC Crime Prevention Programme, can attest to this. He says that quality, high-definition CCTV cameras have really helped to increase convictions in recent times.
"Technology-wise, CCTV today can make a real difference. The old systems that recorded onto VHS had poor quality visuals that were often not good enough to identify and convict perpetrators, but the cameras available now have super quality visuals and good evidential value," says Alexander.
"Last year a police unit in Germiston arrested 85 suspects using CCTV footage during a crackdown and of these 85, 80 were in custody when I last checked. This shows that high quality recorded evidence is a very effective tool for bringing perpetrators to book."
Alexander also believes that CCTV has an increasing role to play in reducing shrinkage.
"The latest technology that links CCTV systems to points of sale promises to significantly reduce shrinkage in stores and will increasingly become a feature of retail security installations in the future."
Broughton agrees, "Shrinkage - the number one financial risk of retailers - essentially equates with a loss of profit and retailers are beginning to understand that it is easier to reduce shrinkage with technology than to try increase turnover to counteract these losses," he says.
Violent crime
But while shrinkage is the greatest financial risk facing the retail sector, Alexander insists that the Spar Group and the CGC Crime Prevention Programme view violent crime, in the form of armed robbery, as their greatest concern.
"It comes down to one thing: the retail sector's biggest threat is violent crime - loss of life takes priority over shrinkage and reduced profits. That is why we have an absolute no weapons policy in Spar stores. We believe that having armed guards would simply increase the danger to our staff and customers as crime patterns show that the size and weaponry of gangs just escalates in proportion to your level of armed security," explains Alexander.
This is yet another example of why employing intelligent technology is far more efficient and safer than using the old 'guns and guards' method.
In addition to lowering the risk of violent attack and reducing and managing shrinkage, technology can also play a part in more efficient business practices.
Electronic article surveillance (EAS), for example, has already been in use for many years in the retail environment, especially in clothing stores or for small, valuable items like CDs and DVDs. But today smart EAS can do more than just prevent theft - it can provide shop management with vital information that can improve the merchandising and marketing strategies of stores.
Smart EAS can collect and analyse data - such as how many people come into the store each day and what times are the busiest - that can help management to streamline processes and improve customer satisfaction.
Intelligent CCTV systems can also help in this regard. Video analytics can be used to monitor and track customer behaviour. This data can provide information such as how long an average customer spends in each different section of the store. Merchandising strategies can then be rearranged for maximum effect.
Another exciting technology that has come onto the security scene in recent years is radio frequency identification (RFID) tagging, which is essentially an updated version of the barcode. Because this electronic 'barcode' does not require line of sight to be read it is far more versatile than the traditional barcode.
RFID reduces the need for human intervention, is virtually impossible to counterfeit and, most ingeniously, has a 100% realtime information benefit, which means that at any exact time it is possible to read the data that exists on the tags, which can drastically reduce all kinds of theft and shrinkage in the retail sector.
i to i technologies, in partnership with Truworths, recently invented a world-first in the RFID arena.
"By combining an EAS lanyard tag with intelligence in the form of RFID, we have created a solution that promises to tackle retail theft more effectively than ever," explains Sean Kiely, national retail accounts manager at i to i technologies. "With this device retailers will no longer be left vulnerable in their changing room environments and foil-lined bags (magic bags) will no longer be of use to criminals trying to remove items from a store."
With so much choice available from technology today, the question for retailers becomes what to choose and how to combine it. Making effective interventions in this sector requires an integrated response that combines common sense, the very latest in smart technology as well as the more traditional security methods, like physical guarding, to create a safer, more efficient and profitable retail space.
Choosing one partner to conduct a complete risk assessment and tailor-design a holistic solution to address these needs is increasingly becoming the strategy of choice for retailers who are serious about protecting their assets, people and information.
Bryan McDermott is the retail business development manager at i to i technologies.
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