Protecting profit through improving security has never been more important. So how can retailers make the most of their security budgets.
Tough trading has highlighted more than ever the importance of making every expenditure within a business count - and security budgets are no exception. And it’s tough for those with responsibility for security expenditure, because they need to ensure that every penny spent is spent wisely, without any potential risk to the business if cutbacks are necessary. While budgetary pressures in some retailers may have started to relax, the focus remains very much on strict control. So how can retailers ensure their tight security budgets provide maximum value for money?
Professor Joshua Bamfield at the Centre for Retail Research says: “There has been some moves back to retailers having their own solutions rather than outsourcing, so people are spending more on capital equipment to allow them to be smarter.”
Security spend is becoming more focused. “They are being much more scientific in the way they look at their shrinkage and where it’s coming from,” says Laurie Cole, senior national account manager at security technology provider Checkpoint.
There is little that is truly new in the market to help retailers beat in-store crime. Instead, Boots head of loss prevention Robert Jennings says it is more a case of waiting to see more recent innovations prove themselves before investing. “We are always looking to get better value, so when we are looking at new and emerging technology, we are looking at the tension between future proofing and spending money wisely. We are thinking much more carefully about the technology in which we are investing,” he says.
Jennings says he is also interested in getting a more integrated security solution. “It’s about having profit protection in a box. Our interest is to converge technologies so that instead of buying separate boxes to do separate things, it’s about working together with suppliers to get a more joined up strategy.”
Retailers are becoming increasingly interested in digital CCTV and Bamfield believes IP CCTV will become the norm as it lets retailers dial in remotely to CCTV systems to see what is happening. This has cost savings as well as wider uses in-store: “It’s still only a small share of the market but has other benefits beyond loss prevention such as doing customer counting and helping the merchandising people,” he says.
Bamfield adds: “There is a lot of interest by medium and large companies who are seeing IP CCTV as the way to go and it’s almost inevitable that people will go that route. There is obviously a cost and they aren’t necessarily buying it now but they are preparing themselves.”
Jennings agrees: “It’s starting to reach a point of maturity and we are interested in the analytics around that as well as linking CCTV with motion sensors and intruder alarms or monitoring footfall or even identifying when a customer needs assistance,” he says.
One of the most vulnerable parts of a retailer’s business can be the available cash in-store. Significant amounts of time and money is spent both on managing and protecting that. Loomis has developed the SafePoint i-deposit box - a touchscreen PC-linked safe that allows staff to deposit money safely and also counts it for them and gives a retailer online visibility of cash accessible by in-store and remote managers alike.
“We have seen that reduce shrinkage and back office processing time,” says Loomis product marketing manager Rebecca Bird. Retailers know exactly how much money will go into their bank account while for store staff its ease of use lets them skim tills more regularly.
Retailers have long had tagging technology to help protect store stock, but increasingly retailers are widening their range of protected products. “We continue to find more solutions to protect more products,” says Cole. “Historically, retailers protected products such as wines and spirits but now that is changing to things like meat and cheese where we use a label on the products at source. We are trying to think of new ways we can develop products to help our clients protect more of their products,” he says. Again, analytics is playing a greater role in retailers understanding their shrinkage, with tagging specialists, for instance, providing more data on analysis of number of alarms and reactions.
To get maximum value from their security budgets, retailers are making more use of incident reporting software. “By reporting incidents you are getting a handle on what is happening and are able to better monitor risk,” says Oris Group managing director Andrew Wood.
Homebase has recently upgraded its use of Oris’ incident reporting tool. “Its out-of-service provider now has a window into the system and their duty managers are also linked in, so that an incident goes straight to the duty managers’ BlackBerry via email or SMS. That gives the stores a real feeling of support,” says Wood.
Staff being more positive that someone will acknowledge and respond to such incidents also results in more reports. “One of the traditional problems is that retailers don’t report incidents because they don’t feel it will be dealt with. Now they feel that if they report an incident it will be followed up now,” says Wood. It also helps retailers better target their spending. “You can reduce spend because you know where you need it,” he concludes.
Smash and grab raids remain a problem for many retailers selling high-value items, but one way of foiling such attacks is through smokescreen technology, which specialist company Smokescreen is currently rolling out to a number of jewellery chains including Aurum Holdings - which operates the Goldsmiths and Mappin & Webb fascias.
For Aurum it was a last ditch solution where others had failed and involves the installation of an anti-raid window system in display cabinets. The machine can either be activated by linking to the store’s alarm system or by the staff themselves through linked key fobs. “When someone starts attacking the glass inside or out, the cabinet fills with smoke and at most they may be able to get in and grab a couple of watches,” says Dylan Hollick, marketeer at Smokescreen.
According to an audit of Co-op stores by Quail Digital, the use of headsets - which have traditionally been used for store communication - can also improve store security and reduce stock loss.
The results showed that in those stores that had installed a wireless headset system linking staff to each other, stock loss dropped 25%. In addition, staff felt more secure and 73% of store managers said security improved. Quail Digital chief executive Tom Downes says: “These headsets link everyone so that they are all on the same call. They can also be linked into keypads so an assistant at a till can press a button to alert staff to potential problems without having to speak.”
“While most people aren’t bringing in these systems to deal with stock loss, it is a convenient, secondary benefit,” he says. The headsets are also now being integrated with tagging devices - so staff are alerted when a high-value item is removed - and with infrared technology so that staff are alerted when customers enter a changing room. Gap and H&M are among those trialling the technology.
Data mining remains an invaluable tool for retailers and it’s something that they are increasingly adopting. “The transaction database is so huge that the ability to trawl through that for discrepancies is huge,” says Jennings. “Data mining is always something we have an eye on to look for how that may play a role in our business,” he says.
And as with CCTV, its use is becoming increasingly integrated. At Jaeger, loss prevention boss Steve Hearn has tied in his CCTV and video analytics with a data mining tool from IDM, which now provides the operations team with marketing information about dwell time, while also allowing Hearn to share the cost between risk and operations.
Meanwhile, security specialist Overtis has launched VigilancePro Retail, a tool that it says integrates EPoS and CCTV systems to create a visual audit trail of employee activity on tills by monitoring every key press on EPoS devices and linking it with CCTV surveillance systems. Irregular EPoS activity is immediately flagged to management, with real-time links to EPoS screen shots and CCTV.