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Loss prevention solutions must benefit all parts of retailers' businesses

Budgets may have been dramatically cut but fashion retailer Jaeger has justified increased spending on fraud prevention technology by using it for profit-generating activities across the entire business. By Glynn Davis

GENERAL MERCHANDISE

Loss prevention solutions must benefit all parts of retailers' businesses

Speaking at The Retaill Bulletin's recent Retail Loss Prevention Summit, sponsored by retail technology specialist Torex, Steve Hearn, head of safety and security at Jaeger, described to delegates how he overcame the problem of a massive uplift in fraud (since the start of the recession) coinciding with a general tightening of budgets on non-profit making activities.

Although the obvious answer to the 71 per cent increase (by value) in public thefts over the past year was to install more CCTV cameras there was also a need to fully justify this expenditure and to also consider that the objective of a loss prevention department is to stop theft in the first place rather than simply detect it after the event. There is also the increasingly important issue of squeezing more value out of existing assets.

Hearn says the solution at Jaeger has been to “look at integrating video analytics to make smarter decisions from its CCTV solution”. He adds: “This will open up the CCTV system to other parts of the business and provide some great solutions.”

These involve being able to monitor customer and staff activities such as dwell time, occupancy, footfall, and queues as well as analyse whether people are looking at in-store displays and promotional initiatives. By leveraging such information from the company's CCTV equipment Hearn says there has been strong buy-in from management at board level to invest further into loss prevention equipment.

During a current three-store trial he says it has been possible to prove that staffing levels at certain times have been inefficient and that this hard evidence has helped convince the board to provide his department with increased budgets.

The simple activity of people counting, which has to date been problematic for the group, will be possible with the new video analytics implementation and Hearn says providing this capability alone across the entire company will effectively “pay for two-thirds of the new surveillance systems”.

Video analytics also provides another exciting possibility for Jaeger - the 'two person rule'. This involves monitoring the tills and flagging up an alert when refunds and void transactions are keyed-in when there is only one person at the Point of Sale. Such an activity requires two people to be located near the tills otherwise there is a high likelihood that a fraud is being committed.

Hearn believes the key issue for loss prevention specialists looking to request increased budgets from senior management is to recognise that loss prevention is a “business-wide tool that will be useful across the whole business”.

In the case of Jaeger, Hearn's efforts have resulted in a planned initial roll-out of footfall counting capability to a selected 40 stores, which will then generate the sign-off on funding for an additional 26 CCTV camera set-ups.

The next objective is to then embed the video analytics systems with the company's data mining solution that will provide it with a loss prevention capability across all the main areas of loss prevention - external theft, internal theft, supplier theft, and loss from processes.

The requirement for a solution that cuts across all these areas is absolutely essential, according to Hearn, who says historically retailers have placed a large focus on boosting security guards and CCTV equipment with the objective of addressing external fraud (from customers) but this typically accounts for only 30 per cent of retailers' overall fraud.

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