LP Magazine EU

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INDUSTRY FOCUS

Can We Globalise around Global Eyes?

By John Wilson, Executive Editor

While the new “anti-establishment” world is rejecting globalisation, will CCTV technology integration provide the panacea to retail risks? The world may continue to spin on its axis, but it is rapidly changing politically and economically with a new anti-establishment agenda and narrative rejecting globalisation in an attempt to preserve national borders and interests.

The Brexit vote and (across the Atlantic) the social media tirades of Donald Trump have subverted the normal diplomatic protocols and have legitimised a growing sense of anger and dissatisfaction that has resulted in a growth in hate crime against retail staff (see news roundup page 43). Suddenly, the disenfranchised have found a voice, and nations are retrenching in response to perceived and real threats. This has created a crisis across the continent. One UK Member of Parliament was killed in a hate crime on the streets of her own constituency, and across Europe shopping destinations have become places where consumers no longer feel safe.

An old world order seems to be pulling apart as Europe faces a massive migration of Middle Eastern refugees displaced by conflict. Migration has triggered a resurgence in far-right nationalism both inside and outside Schengen agreement countries. And talk of border fences and walls, rather than the free movement of people, will provide the major sticking point regarding the UK’s Brexit negotiating position.

Continental CCTV Challenges

The Internet itself—once a technological enabler—has become its own rogue nation where cyber-criminals, some of whom are state sponsored, can operate with devastating accuracy both anonymously and with impunity. In both the physical and cyber-world of retail risk, brands are attempting to reach out to more customers while at the same time keep them safe in terms of their data and their personal security when it comes to terrorist atrocities being carried out in crowded places. Shopping centres and nightclubs—where the authorities in some European cities have been arguably restricted in their effectiveness due to a lack of CCTV coverage—have become the terrain of choice for suicide bombers and lone wolf attacks.

During the Bataclan and Charlie Hebdo attacks, footage was captured and shared on people’s smart phones after the act, rather than the authorities being able to proactively share real-time CCTV coverage and potentially map the terrorists’ next moves. It can, and has, been argued that France’s libertarian culture—CCTV is not permitted in many public areas due to concerns over privacy—contributed to the death count because incidents could have been halted earlier through advanced intelligence. 

Germany shares similar strict rules around CCTV use, particularly in retail spaces where the technology can only be deployed in strict accordance with works council guidelines. But is the world changing? Elections in France and Germany later this year may trigger a review of using CCTV in crowded places, particularly if, as expected, the far right gains extra populist votes on the back of anti-migration sentiment. 

Matt Allen, commercial director at Amberstone, which works extensively in northern Europe, said clients and local knowledge dictate the deployment. “We work through Amberstone GmbH in Germany, and a lot of the work needs to be discussed and agreed with the works councils who have an enormous amount of input. In France you have to make an application to the local mayor’s office to get permission to install CCTV. This all slows or stops the deployment across Europe at the moment. This may of course change if you look at what has happened in Europe in cities such as Paris. This was the worst of all wake up calls for the authorities there. 

“This is different in the UK where we have a more mature CCTV market. There is a greater acceptance of its benefits, and there has been an industry move towards finding the correct solution integrator rather than the traditional ‘box-shifter’ installer. 

“CCTV used to be an LP tool to deter shoplifters, but now the quality of the images aligned with the different databases and information streams that can be overlaid means that the traditional model is outdated, and in its place our customers are reaping the rewards of business management systems that can be used for many other purposes. Today the big push is all around integration with other complementary systems to make it part of an added-value experience for our customers.

“At Amberstone we take a consultative approach when working with our customers and aim to understand their business requirements and needs so that we can effectively deliver the correct solution to their individual business requirements, whether that be in LP, store operations, marketing, or logistics.”

Evolution to Proactive Solutions

As societies are seemingly moving apart, the opposite is happening in the world of technology, and CCTV is now more about a convergence around common themes. Yes, it will always be a security tool. But the growth in video analytics and the ability to lose less and sell more via digital IP 360 cameras viewing all of our shopping behaviours means that marketeers and merchandisers can utilise the technology to influence commercial decisions—deployment of staff and product—based upon people counting, thermal mapping, dwell time, and sales conversion. 

Andy Martin, retail business development manager for Axis Communications, calls it “loss prevention added value.” Today’s CCTV offers not only high-definition security images, but also forensic point-of-sale (POS) analytics, inventory and EAS integration, and colleague safety and welfare capabilities, for example. This also means that it is no longer the sole preserve of the LP department, but can be funded through a number of organisational budgets, namely IT, facilities, operations, and marketing.

“The race to the bottom is now being rethought in terms of CCTV,” said Martin, “and we are starting to see some great examples of retailers focusing on the value they get from a solution as opposed to just squeezing the capital so hard that they never quite manage to realise the potential return on investment that the business expects. It is now more part of a wider IT strategy, which is fit for the future in terms of networked capability and an integral component of the business intelligence arsenal supporting the wider business objectives and growing the internal stakeholder engagement.

“As an industry, we have to get our acts together to make sure that we work collaboratively with retailers and provide solutions, not products. And that means having a better understanding of the retailer challenges and making sure we become trusted partners—technology enablers and integrators.”

Simon Edgar, senior director for product development at Checkpoint Systems, shares Martin’s view and said, “The CCTV industry is changing from reactive product provider to proactive solution. This has come about more with the move from analogue to IP, which has enabled a wider application of the technology. It is not about reacting to a crime after the event, but a means of observing behavioural analytics and even facial recognition.

“We are now in a world of convergence and network integration allowing different technologies to talk to each other both in the retail space itself and in the security arena. We are currently doing some work with technology and guarding companies to deploy personnel more effectively in real time. This is a game changer in terms of reducing costs.” 

CCTV is now being seen as a major building block for retail intelligence, according to Scott Brothers, executive vice president for corporate development at Oncam Technologies, a business that continues to invest heavily in research and development to stay at the forefront of technology.

“Today there is a sense that you have to create an experience, and the camera technology is part of that,” said Brothers. “It can gather intelligence to enable that better customer service and journey in the same way that Google has been able to gain a better understanding of and insights into users through every keystroke. 

“Security grew as a grudge purchase, and this was further compounded by the unbelievable silo mentality of the industry. Now this is opening up. It is no longer just the security business that is interested in the camera, but on today’s high street, we are looking at five or six departments that are video-analysis driven. They are looking at how many people come into the store and where they roam, all of which can be controlled through a handful of cameras, which is more aesthetically pleasing. 

“Stores are changing in response to the challenges of online, so the experience has to be exciting and fulfilling. It is no longer about getting more pixel quality and selling more cameras when it comes to the ROI. But I see it as more tortoise than hare in the race for getting the best out of the data provided by today’s technology—being able to act upon the intelligence.

“My challenge to the retailers is ‘what do they want to know?’ A heat map, for example, means nothing if you cannot extrapolate data from it. It is the end users who will dictate our technology road map key to the future. If retailers genuinely want to sell more goods, they need to know how the customer is interacting with the retail space and from that information increase the levels of engagement. That might mean social media and sending them an instant incentive message when they engage with a certain promotion or mannequin in store.”

CCTV has come a long way and still has a long journey ahead of it, according to Karen Sangha, field marketing manager for Panasonic, one of the biggest CCTV manufacturers in the world. “In my time in the industry, I have seen the shift from surveillance to adding more value to the customer, and that shift also goes for the key decision makers. It is no longer just security managers who we are seeing; now it is heads of IT and marketing getting involved because of the functionality, the responsibility for the layout of the stores, and to take a holistic view of total cost of ownership of the security system, including data storage costs and network security. For example, the ability to incorporate people-counting technology can be used not only for security purposes but also to monitor shopper movement to better deploy staff. And we offer heat-mapping technology so that retailers can literally see hot spots in the store to make sure that replenishment is taking place.”

Facial Recognition

In a previous issue of LP Magazine Europe, we looked at facial recognition as a workable solution and highlighted the benefits and challenges of the technology. In Europe, some of the privacy issues have been addressed, including technology from Panasonic that facilitates face masking in line with the Federal Data Protection Act. This can only be unlocked with the permission of the works councils, but companies are bracing themselves for changes in the data-protection regulations in the next twelve months.

The new rules will harmonise what is a patchwork of individual data-protection interpretations and will toughen up the law in such a way to allow punitive compensation claims for retailers and third parties—including cloud service providers—who handle sensitive customer data. It is fair to say that legal teams from many of the larger retail groups around Europe will be poring over the fine details of the new regulations to make sure they are in compliance.

In the meantime, one argument suggests that although the current technology is fit for the world of big data, there is simply too much data, and retailers could find themselves drowning in spreadsheets.

Allen added, “Video analytics is still quite an expensive way to go if you don’t need it. We are in danger of generating too much data. Who needs or has time to read a thirty-page report every day? It should only be deployed in stores where it is required. It is a bit like electric seats in your car if you are the only person driving it. You only move them once, so why do you need electric positioning?”

Simon Edgar from Checkpoint Systems agreed. “We are in danger of data overload and the creation of a lot of noise, which means that key events do not get responded to as they are effectively drowned out by the volume of data noise.” 

He also argued that facial recognition has a place—but it is a very specific place. “Use it as a discreet early warning, and make staff aware that certain individuals have entered the store, but do not rely upon it as a way of suggesting someone is guilty—that way madness lies. If you are worried, approach them and ask if you can be of help rather than challenging them.”

Facial recognition, it has been argued, is of more use in other environments outside of retail. Brothers added, “Facial recognition is still challenging; we still need to make a business case. It is not an easy technology for stores, but it could be used with the consent of the customers who are gambling addicts, for example, who want to be barred from casinos for their own good. It is a form of self-exclusion, helping to save themselves from themselves.” 

Elke Oberg, marketing manager for Cognitec Gmbh, a company that specialises in facial recognition, agreed with the analysis, in part due to the privacy rules that prevail in countries such as Germany, but also because of the day-to-day general practicalities. “If clients want to use existing cameras, the image quality may not be sufficient for face recognition. Also, the current cabling may not support the data stream from high-resolution, machine-vision cameras.

“In a busy store, it is challenging to capture frontal, high-quality images due to high footfall or people wearing dark glasses and hats. If the technology produces too many false alarms, it could also be brand damaging. There are few case studies where retailers already see the benefits. 

“An application in a pharmacy chain is successfully preventing drug theft. There, customers are required to remove glasses and hats. Casinos are using the technology for self-enrolled problem gamblers, allowing them to stop their habit. It is a great use of the technology, and families and communities appreciate this application.

“Every customer or potential client needs to evaluate the accuracy level in order to determine if the solution makes sense within their environment. We do not recommend outdoor use, for example, because sunlight introduces extreme highlights in facial images.

“When conditions are met, the technology works well. Stores are considering the use of the technology not only for shoplifting threats but also for potential threats of violence against staff. The general public may also accept the use of this technology to prevent terrorism attacks in a mall, but moving forward, it will always be a battle between security and privacy.

“We have solutions for analysing the faces of males and females and their visits at which times of the day, but stores should inform people what they are doing with the data. Successful implementation depends on constant conversation and education.”

The technology to utilise the humble camera in more creative ways to reduce crime and gather sales-generating data is apparent, but the world is at a pivotal point at the present. A war of words is raging between the forces of states looking to protect citizens from acts of terrorism and the libertarians who seek to limit invasions of privacy. With regard to the latter, the next twelve months will prove critical in terms of the new data-protection regulations, which will seek to harmonise privacy rules while at the same time challenging the big data capabilities of stores looking to capture more than security-related intelligence from their CCTV systems.

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