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Loss Prevention

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T hey walk into the store, look like everybody else — and steal roughly $13 billion a year from retailers. Shoplifters care not how theft burdens the court system, negatively impacts jobs or hurts a business’s bottom line. They mostly care about getting caught, says Read Hayes, a University of Florida research scientist and director of the Loss Prevention Research Council (LPRC).

Catching these criminals has become an entire industry with its own foundation, magazine and reality TV show. Large retailers like CVS and Target implement significant LP tactics and caught one million shoplifters in 2011, according to Hayes International’s 24th Annual Retail Theft Survey, yielding $161 million in stolen goods. Yet the breadth and impact of organized retail crime (ORC) continues to increase.

According to NRF’s 2012 Organized Retail Crime Survey, a record-setting 96 percent of surveyed retailers said they’ve been a victim of ORC, but this could be a matter of awareness.

“What this tells us is that as retailers and law enforcement become more aware of and more proactive in pursuing organized retail crime gangs, criminals have become more desperate and brazen in their efforts, stopping at nothing to get their hands on large quantities of merchandise,” NRF vice president of loss prevention Rich Mellor said in a press release accompanying the survey. “Selling this stolen merchandise is a growing criminal enterprise and retailers must remain vigilant, as this is an issue that involves everyone’s cooperation when it comes to protecting retailers’ assets, including their valued store associates and customers.”

And video surveillance is one of the most powerful tools for stopping theft, Hayes says.

Video: deterrent or bluff?
Over the years, Hayes has studied shoplifters’ backgrounds, skill levels and motives. With all of them, he says, closed-circuit television video (CCTV) is quite effective in striking fear. But that fear comes with an asterisk: CCTV’s success revolves around how retailers deploy the technology.

“I could walk 100 criminals through an entrance, and we might find 10 to 20 percent even notice a monitor, camera or an electronic tag system,” Hayes says. “As the retailer, our assumption was everybody can see them and knows what they are.”

But Hayes’s focus groups have discovered that shoplifters can’t see them, mistake cameras for something else (commonly smoke detectors) or blatantly dismiss the camera’s presence. Many believe nobody’s watching on the monitor.

There’s also the matter of society’s lack of attention. “We don’t focus now,” Hayes says. “Most of us are looking down at a phone.”

That’s why Hayes, a former retail detective, has dedicated his career to analyzing preventative shoplifting measures. He studies the processes, evaluating old-school tactics against evidence-based practice. And he’s come to the conclusion that letting the potential offenders know a camera exists is no longer a credible threat; they need to know they will get caught. The good news is technology is changing in favor of the retailer.

Video surveillance technology
According to LPRC’s “CCTV in Retail 2012” report, one-third of 47 surveyed retailers still use analog cameras, with more than 75 percent indicating aesthetics were very important or important to their camera-purchasing needs.

More retailers are upgrading to modern systems, says Jackie Andersen, business development manager for retail at Axis North America. “They are still in the process of migrating from closed-end analog systems to IP [Internet Protocol] network video,” says Andersen, whose company specializes in network cameras and IP networking solutions.

Andersen says IP network video is an open system that is infinitely scalable, and the hardware ties into both loss prevention and non-LP business solutions. Some retailers are encoding existing analog cameras to gain the scalability and business applications of a full IP network video solution, she says.

There’s also the matter of improved video. According to the LPRC report, more than one-third of respondents said “better image quality” was the reason for upgrading to IP video.

Axis introduced IP cameras in 1996. Today, the camera-and-computer units digitize and compress video that is transported over an IP-based network and recorded to a standard PC with video management software.

Hayes says this technology is much more dynamic and capable. “Because of the IP protocol, [video] can be shared within the store and outside of the store upstream, downstream, across stream.”

This technology allows corporate offices to make tactical and strategic decisions for an individual store. It also helps analyze shoppers' behavior. “The corporate office team is using IP video in real time to understand much more about their employees, shoppers and the bad guys,” Hayes says. “This has been an exciting breakthrough.”

There’s also a mobile component: Nearly two-fifths of LPRC survey respondents with network/IP video surveillance systems said they access live or recorded video footage via a mobile device.

Hayes says mobile allows a quicker response and instills fear of detainment. Since store detectives can be untethered from the monitor room, they can be on the floor with a handheld monitor and notice a suspicious shopper stuffing his hoodie pockets with razors, a common theft item. The detective can walk to the perpetrator’s location while keeping an eye on the video, never losing sight of the person in question.

Andersen says today’s retailer understands mobile’s value and is trying to empower more associates via mobile technology.

“With more retailers going into omni-channel retailing and mobile POS checkout, there are so many triggers that video can detect,” Andersen says. “There are POS triggers that happen [with a] video oversight that sends alerts to an associate.”

Facial recognition
For anybody who has watched a modern cop drama, facial recognition technology should come as no surprise in the evolution of CCTV. But in the real world, the application is not as precise as it sounds.

“Facial recognition is definitely a misleading term,” Andersen says. “I prefer to refer to it as facial cataloging.”

About 15 percent of LPRC survey respondents said they are using or considering facial recognition analytics to proactively notify them of known shoplifters. Andersen says the software is quickly evolving.

The software uses geometrical algorithms that count pixels between eyebrows and the rest of the face. Andersen says it is a quick algorithm that works 90 percent of the time.

“We are trying to shrink the pool into people that are recognizable when they come in, but you can’t say that with 100 percent clarity you are going to have a face match,” she says.

Hayes believes this technology will keep people from stealing.

“If you have facial cataloging/recognition, these guys think, ‘If I go and take from this store, they have got that camera. That camera catalogs my face and will recognize me again.’ The majority are going to be very concerned about that,” he says. “That would bring [stealing] to a higher level of clear and present danger.”