Using Video and RFID Data to Improve LP and Inventory Management
Video has been used by retailers for decades now to help improve security efforts. It enables store owners, managers and security professionals to actually see what happened following an incident, and can be an invaluable resource in helping to resolve complaints, liability claims and identify shoplifters.
Video, however, has evolved with the technology to the point where more retailers are also using it to help improve operations and profitability. Intelligent video solutions that integrate recorded video with point-of-sale (POS) transaction data and business analytics are now used by many retailers for advanced loss prevention and investigation, workforce management, and operational improvement in areas including store presentation, compliance and customer service.
That’s one reason why the concept of integrating fixed radio frequency identification (RFID) data with video is gaining traction so quickly. The solution offers retail organizations an extremely effective tool for tracking high-value merchandise, investigating suspected theft and better managing inventory.
For retailers, a solution that integrates high-definition video and RFID data represents a new opportunity to improve returns on their technology investments by leveraging the video and RFID technologies they may already have in place.
Retail Insights sat down recently with Net Payne, Chief Sales and Marketing Officer with Ottawa-based March Networks, to learn more about how emerging video and RFID solutions work and the benefits they offer retail organizations.
Q: Before we speak about what this technology can do to help retailers, can you run through some of the basics of RFID technology?
A: That’s a good idea. While those working in the retail industry are likely very comfortable with the presence of RFID technology, it’s not always clear how it works.
RFID tags, which some people refer to as RFID chips, contain electronically stored data that is transmitted via radio waves whenever an RFID-tagged item passes by a fixed RFID reader. The stored data can consist of almost any information a retail organization requires, including item or serial numbers, or electronic product codes, making it extremely useful for inventory tracking and management. There are billions of RFID tags deployed globally in retail apparel alone, however estimates suggest that less than 20% of the apparel market is using the technology to date (IDTechEx Research, RFID Forecasts, Players and Opportunities 2017-2027).
It’s important to note that RFID technology is different from Electronic Article Surveillance (EAS), which many people would recognize as the bulky or hard plastic tags attached to clothes and other merchandise in retail stores. EAS tags contain no item-specific data and are designed to simply trigger an alarm if they are not removed or deactivated. While some predict that RFID technology will eventually replace EAS, another approach is to combine the two capabilities so retail organizations can access valuable item-specific data as well as maintain the alarm functionality.
RFID tags contain item-specific data and can be sown into apparel or otherwise hidden
EAS tags contain no item data. They are attached visibily to items to serve as a theft deterrant.
RFID technology is being used quite effectively in a wide range of applications. Renowned guitar maker Fender, for example, has reportedly embedded more than 30,000 RFID chips to uniquely identify its guitars. The data can be read by Fender dealers and repair shops, and if a guitar is believed to be stolen, it can also be read by police to help determine the instrument’s real owner. Casinos are embedding RFID data in gambling chips to track spending and prevent theft, and factories are using it to help measure how long it takes to build a product.
Q: We know that many retail organizations are already using RFID technology on its own quite successfully. What additional value does video bring to the table?
A: That’s a great question and one we get asked all the time.
While RFID, transaction and other data can help identify what has likely happened following an incident, only video can reveal how it happened and who was involved.
For example, a retailer will be able to discover that a missing RFID-tagged 4K television was last detected by an RFID reader mounted at a back door in one of its locations. The assumption will probably be that the item has been stolen. However an integrated video and RFID solution can provide the next level of detail, enabling the retailer to search on the electronic product code contained in the RFID tag and click on a link to view the associated video.
The recorded video may show that an employee passed the television out the back door to an unknown person. It would allow the retailer to verify that the item was, in fact, stolen and would also provide clear video evidence that could be used to identify the unknown participant, deal with the thieving employee and recover the cost of the lost item.
Q: How can a retail organization use an integrated video and RFID solution effectively and what are the benefits?
A: The applications for integrated video and RFID data in retail are numerous, and we find that our customers are quick to suggest additional uses once they understand the capabilities of the solution.
Loss prevention is an obvious area where the technology can really help. And with shrink costing Canadian retailers an estimated $4 billion annually, that’s an area where retailers are always looking to improve. Similar to the example I gave above, being able to track merchandise using RFID data to its last known location and then review the recorded video to see what happened next is extremely valuable for retailers. It not only makes the investigation process much faster, it also provides the organization with critical video evidence.
In some instances, a retailer might discover that the missing inventory was not stolen at all, but simply misplaced. In such cases, having the video replay available makes it easier for an owner or manager to understand why that happened and identify employees who might need more training.
Other interesting applications we’ve encountered include using a video-RFID solution to confirm that high-end merchandise is intact at the moment it is transferred to a courier company for fulfillment delivery, in case items arrive damaged. Another customer wants to use the solution to alert staff when a product is removed from a wall display – probably because it’s been purchased – so the display can be restocked before a news sales opportunity is potentially lost.
Q: What should retail organizations look for in an integrated video-RFID solution?
A: To ensure optimum flexibility and performance, retail organizations should look for solutions that can deliver the same level of reliability, management and high-quality video capture they would typically demand from their video surveillance system. The integrated solution should include easy-to-use reporting software with robust search capabilities that allow loss prevention investigators, managers and other users to run searches across a few stores or thousands of locations simultaneously. Automated alerts that enable staff to proactively respond to anomalies, such as high-value items being removed from a location without first being captured on an order, are also ideal.
Finally, it’s important for organizations to think about the technology expertise they will need to implement such a solution. Most systems integrators will have a high degree of knowledge on either the video or RFID side, so retailers should ask how the provider is going to bridge any gaps in knowledge and what kind of support they have behind them from the technology manufacturers.
March Networks is a leading provider of intelligent IP video solutions currently used by more than 300 retail organizations worldwide.