He is always willing to promote the importance of loss prevention in retail, but Robert Jennings’ latest project should also keep Boots’ marketing and store management staff happy.
By integrating security systems that are being used in Boots’ stores already, the head of loss prevention hopes to create a package that will tackle all types of fraud, theft and shrinkage.
In addition, the finished product will provide a platform for intelligent CCTV systems to be used by marketing and management to monitor what is happening in stores and, more importantly, alert them to situations that could require an immediate response.
The retailer has used PCMS’s Vision SmartStore product to tackle internal shrinkage for several years. The system uses transactional data to identify exceptions to operating norms that indicate possible shrinkage at the tills. It also allows store managers to identify where staff need more training in order to operate efficiently.
Under the new initiative, the two companies are working together to integrate Boots’ existing networked CCTV system with a video analytics package and SmartStore in a one-store trial. It is hoped that the resulting combined system will not only be used for loss prevention, but also for more responsive customer service.
Jennings says: “The programme was designed to examine ways of making existing systems, such as CCTV cameras, work harder. It also offers wider stakeholder appeal, with features that are equally applicable to the marketing and management functions as they are to the discipline of loss prevention.
“Cameras have been able to detect movement for a long time. Now we are able to make sense of that, such as by measuring lengths of queues, so we can send a real-time alert for someone to do something about it.”
Other applications include people counting and Boots can also look at which areas of the store people are hanging around in and whether they are doing this for positive or negative reasons, such as shoplifting.
However, for Jennings, the primary reason for investing in this pilot is to show whether security systems can be made more effective and cheaper to run. He wants to reduce the number of security devices in stores and create an integrated system that is much closer to being real time.
He explains that the more security devices that can be networked together, the better. “We need to start integrating systems, so till points are monitored by cameras, for example. My vision is to get profit protection in one box, so we can get rid of intruder alarms. This will release some real cost out of the business,” he explains.
The trial is taking place at a Boots branch at Mansfield in Nottinghamshire. The retailer has undertaken various other loss prevention trials at its Piccadilly and Charlton stores in London and its Charlton store, Greenwich, but Jennings wanted to be close to the trial store in this instance to get the most out of the project. He says: “Mansfield was chosen as a typical store. It is not the best or the worst from a shrinkage point of view and it is relatively close to our Nottingham headquarters.”
The store is not only testing technology, but also new ways of tackling loss, so Boots hopes to also pilot new processes and wider non-technical initiatives.
Jennings says that staff are going through both a cultural and leadership experience. “We are having bi-weekly meetings with the store team – we want to know what’s working and what is not. For this to really work, it has to be intuitive and is about educating staff to approach the problem of shrink in alternative ways,” he explains.
“I’m presently sitting in the manager’s office in our Brixton store, with lots of CCTV screens. No one is watching them and I don’t want people to watch them. We can’t have people in two places at once,” he says.
PCMS loss prevention specialist Peter Moss explains that the first phase of the technology project has been up and running for just over two months, having gone live before Christmas.
Most of the cameras being used were already in place in the store – Boots has simply had to reposition a few and add a couple to give appropriate coverage for all the functions they may now be used for.
The video system has been connected to the pager system in-store, providing relevant staff with alerts based on activity caught by cameras. PCMS and Boots are in the process of networking the involved systems together and then will be able to push ahead with phase two.
At this point, alerts generated by SmartStore based on point-of-sale data will be sent to stores alongside video files. Staff will also be able to view alerts from outside the store, at head office, for instance.
Jennings says: “The video analytics software has been designed to monitor footage from across the network of in-store CCTV cameras and automatically alert store personnel to certain behaviour patterns. The system can recognise when customers spend more than a certain amount of time at a particular shelf, but can also be configured to identify congestion, till queue length or even spillages in the isles.”
PCMS wants to make the experience of data-mining much more proactive than it has been in the past. Moss says: “For one measure, such as dwelling in a high-value location, the alert can be for loss prevention or customer service. We can make the people in the store more proactive.”
Let the numbers do the talking
For the combination of the systems to be extended beyond a pilot, Jennings says that it needs to show a reduction in shrinkage and a reduction in lifetime cost. He adds: “It would be nice to include sales as a measure, but it is hard to make the connection.”
When it comes to tackling internal shrinkage, SmartStore already acts as much as a deterrent as it does a detective. Jennings hopes that similar results can be achieved for external shrinkage. “Certainly, with internal shrinkage, for every single detection we are making there are 10 to 15 deterrent interventions,” he explains. “If we make the stores look and feel more secure, the problem will go somewhere else.”
Within the next month, Jennings will also have to worry about security at Alliance Boots’ Alliance Pharmacy stores. He says that no decision has been made yet on whether the SmartStore system could be extended to the Alliance Pharmacy stores. However, if this happens, then the system would be used in a different way.
He says: “I wouldn’t pretend that we have all the answers in the trial store – we are developing something and working together to create a future.”
In the longer term, he recognises that reducing shrinkage at Alliance Boots is only part of the battle. He adds: “The issue is how we can get the problem off the high street full stop.”
PCMS managing director Richard Smith adds that Jennings, in particular, approaches profit protection in a way that other retailers could learn from. “A lot of this is down to Robert Jennings, who has a forward-thinking attitude to tackling the problem. His view and Boots’ experience does touch a lot on issues that all retailers face.”
For several years, technology suppliers have proposed integrated loss prevention systems that can have dual uses. Boots’ trial should prove whether this can become a reality in retail.
MEASURING THE VALUE OF LOSS PREVENTION
A report produced for the ECR Europe Shrinkage Group says that loss prevention teams need to be stricter in how they measure the value of the technology they implement.
In particular, the report has found that there is a lack of understanding of how to measure the value of investments. Too often, loss prevention practitioners use the generic term “return on investment” as a catch-all phrase to suggest overall effectiveness, rather than as a precise measure of value – the meaning it was created to convey.
It warns that both incorrect usage of financial terms and naive cost/benefit models will undermine credibility, particularly when compared with investment requests from other functions in the business.
Adrian Beck, a reader in criminology at the University of Leicester and the author of the report, says: “If retail loss prevention practitioners are to be taken more seriously by other functions within the business, they need to show greater rigour and professionalism in the way in which they go about developing business cases for investment and how they measure and monitor the performance of solutions they recommend. It is hoped that this report will help them achieve this.”
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