Retail chains are facing major challenges in maintaining operating margins as consumer preferences have changed dramatically and there is a heightened awareness about health and safety.
The economic impact of the pandemic and the ever-present threat of lockdowns has forced retail chains to look for solutions that can help them rapidly identify changes in consumer behavior, spot operational gaps in real-time, and fuse data from multiple data sources to take decisions proactively. Retail video analytics offers all of these capabilities and more.
There are two primary reasons retail chains should consider implementing an intelligent video analytics solution.
1. Graduate from descriptive analytics to predictive analytics
Analyzing historical retail performance and operations data from data sources such as inventory management systems, Point of Sale (POS) systems, people counting devices are the foundation of what Gartner calls “descriptive analytics”.
Descriptive analytics is all about understanding what happened in the past. However, relying only on descriptive analytics may not be enough especially in a world where brand loyalty is fast eroding and customers have very little tolerance for:
- Out-of-stocks, pricing inconsistencies, and “store friction”
- Inability to offer the convenience of Buy Online, Pick-Up in Store (BOPIS)
- Inaccurate fulfillment and gaps in customer service
With video analytics, retail chains can graduate to predictive analytics to get answers for questions such as:
- What should be the ideal staff size for a store on a Saturday evening between 5 pm to 8 pm?
- Which display unit generates more sales for a product at a location and how does it vary across locations?
- What product should a store stock more than usual on a sunny day at a specific location?
2. Go beyond loss prevention to gain a competitive advantage
Retail chains are now forced to invest a lot of money in new and untested technologies to keep pace with the rapid changes in consumer preferences.
Investments in new fulfillment centers, customer delivery and returns management solutions, to name a few, are eroding margins and forcing retail chains to justify the investments or keep a close tab on ROI.
The first wave of video analytics solutions focused on delivering smart or intelligent video data interpretation solutions for a proactive approach to loss prevention and security such as:
- Locating suspects in a crowd of shoppers
- Tracking the movement of specific items or high-value inventory
- Validating employees via facial recognition to allow access to secure areas
Retail video analytics have now moved beyond just video surveillance and security to provide data insights relevant for almost all retail departments.
Retail chains can now justify the cost of implementing a sophisticated video analytics solution as the benefits from the data insights can boost store performance across the board.
That’s not all. Video analytics applications are available as bolt-on solutions that leverage existing security camera infrastructure that most retail chains already have in place thereby simplifying implementation to a large extent.
Here is an overview of the top 5 applications of retail video analytics that will allow retail chains to tackle some of the biggest operational challenges facing them.