It's A Steal

Nov 1, 2005 12:00 PM, By Corrina Stellitano

SMART VIDEO CAN DO WHAT ONLY HUMANS ONCE DID IN THE RETAIL ENVIRONMENT. Today's smart systems can notice a spill on Aisle 4, a shopper repeatedly reaching toward a shelf on Aisle 3 (and stealing small items) and a runaway cart in the parking lot steering toward a customer's car.

But, just how smart can intelligent video systems become? Today, technology providers are racing to create the most intelligent video surveillance system, and for many, the retail industry is an ideal proving ground.

Video surveillance providers have found that retailers face challenges that pair logically with intelligent video solutions: They have a daily responsibility to keep thousands of customers and employees safe. They lose billions annually to thieving employees or customers, and they often face manpower shortages.

What could be smarter than working to solve identifiable issues?

Serving up safe shopping

Protecting retail facilities inside and out offers multiple applications for intelligent video. Existing systems able to detect unattended packages in airports can be tweaked to identify unattended bags in stores or even an object knocked from a shelf to create an aisle obstruction. Alarm settings for unauthorized trucks in front of federal buildings can be adapted to detect passenger vehicles in loading docks where only trucks should park.

“In the digital migration, the first move was from the analog VCR to the DVR,” says Jeff Stringer, ADT's director of retail technology sales. “We used to think if we could create a DVR with the capabilities of a VCR, we were doing good. Now the power of video analytics has moved this frontier in a totally new direction. We are amidst a constant redefining of video analytics to create a business management tool. We moved a few years ago to motion, movement of items and the ability to search for moved items and light change. Then, through user discussions, we have recently added object size, speed and direction.”

Because the ability to classify video footage by these exact criteria is still new for most, intelligent video continues to be described as an emerging technology at Canton, Ohio-based Diebold. “(Instead of tracking) only general movement, now we are defining specific events and classifying by things like shape and color,” explains Mike DeWalt, Diebold's senior digital surveillance product manager:

“Correctly defining intelligent video is crucial,” says Phil Robertson, vice president of product management for Cernium, a St. Louis-based developer and provider of behavior recognition software and systems for the security industry. “That term intelligence is (often) abused,” he says. “Some people will say they have intelligent video, but it's basically motion detection.”

The distinction is vital to successful surveillance, he adds. “For example, if you had someone lingering around cars in a mall parking lot in the middle of the night, that's suspicious activity, and you want the system to bring that to someone's attention,” he says. “If you had only motion detection, each time someone moved in the parking lot it would be an alarm; and after a while, it would be ignored.”

Cernium is now offering the fourth generation of its intelligent video solution. According to product specialists, the system is able to distinguish among a catalog of 16 distinct human and vehicular behaviors, such as a fallen person, lingering individuals or vehicles, abandoned objects and unauthorized personnel or vehicles.

Though more than 30 percent of its intelligent video customers are in the retail arena, few have deployed the technology beyond building exteriors or mall interiors, Robertson says. “We've had a louder and sooner request for Homeland security and physical safety issues. People are concerned about the liability of their parking lots and external areas.”

A recent Cernium retail deployment included 87 cameras and intelligent video capabilities for the Circle Centre mall in Indianapolis. “Being a policeman for many years, I always dealt with crime on a reactive level and that becomes very frustrating,” says Jamon Jack, account executive for the system integration company, ESCO Communications Inc., which supervised the deployment for the mall. “Cernium's technology gives users the ability to take the security of their visitors and employees to a proactive level.”

Battling a shrinking giant

Still in the pilot stages at retail with its intelligent video systems, Bradenton, Fla.-based GE Security is working to satisfy what it views as the primary retail challenge: inventory shrinkage.

“You have to look at the biggest opportunity for bringing value to the customer. In many cases, you have to focus on the biggest problem they have. And that issue right now is shrink,” says Darren Nicholson, director of vertical marketing for GE Security Networked Solutions.

As ROI is always a hot topic, addressing shrinkage allows system providers to meet retailers' needs in a quantifiable way, he says. In 2004, retail shrink represented an average of 1.7 percent of total retail sales across North America, according to an Ernst and Young survey. The total lost to inventory shrink approached $38 billion. “By preventing that theft, you've created a lot of value,” Nicholson says.

Today's smart video systems can battle shrink in a number of ways: With the integration of point-of-sale (POS) and smart video systems, employers can watch for the savvy schemes of employees, from sweet-hearting (giving unauthorized discounts to self or friends) to refunds granted without a customer present. Transaction information can be overlaid with video footage in real-time, and store management can monitor the data from multiple locations across the LAN.

Of the smart video capabilities, interaction with POS may be one of the most deployed. As a standard offering, Diebold offers POS interfacing at retail, facilitated by years of specialization in integrated ATM/POS interface solutions. For example, says Hedgie Bartol, business development manager, Diebold Retail Security, retailers can now specify that the video be marked each time an age-restricted sale is transacted and that the video recording of the transaction be saved from 30 seconds before to a few minutes afterward.

Melville, N.Y.-based Verint has widely deployed similar POS analytics. “One of our analytic solutions allowed investigators to convict a suspected murderer,” Verint's Mike Howanitz says. “A piece of evidence was purchased at the retailer, and they were able to access video of the suspect making the purchase and show the footage to the suspect, which led to a confession.”

Indeed, POS analytics are a daily reality for many providers. “We talk POS every day in my world,” ADT's Stringer says. “From an internal theft standpoint, retailers are going to lose in two ways: money or merchandise. So we try to protect against both.”

Protecting merchandise from non-employee shrinkage is also the domain of smart video. “Shoplifting is difficult to detect without these tools,” says Howanitz, who leads the development and deployment of Verint's retail solutions. “Being able to track loss is difficult if you don't have adequate coverage with your base systems and then apply analytic technologies. It's about getting the right information to the right people at the right time.”

The best intelligent video systems offer layered intelligence, says Carolyn Ramsey, president and co-founder of ActivEye, Briar-Cliff Manor, N.Y. “The same system that provides real-time alerts to an employee at a retail store who must respond to a potential theft in progress also provides detailed reports and trend analyses for senior management, such as regional managers who might be responsible for a large number of stores.

“For those managers, ‘intelligent’ video reveals critical operations data such as which stores have the largest number of incidents, what times of day pose the greatest risk and which types of physical store set-ups or inventory management systems are most at risk,” Ramsey says.

Arming the loss prevention personnel with the right information is often all it takes to make a difference, experts say. “The retail loss prevention guys are smart cookies,” Diebold's Bartol says. “They ask, ‘Can we tell whether the guy reaches to the shelf more than three times?’ because you don't usually buy more than three saw blades, but if you reach out six times, that may be theft. And then they ask, ‘Why is everyone going to one checkout line and six are open — is it because that person isn't charging for all the items?’”

Alarms can be set to detect a customer repeatedly reaching toward items, which would not usually be selected in bulk, emptying a shelf of all items, removing specified high cost items or even moving quickly out the door with a rack of clothes. Line queuing functions can identify which checkout lines have extraordinarily large numbers of customers.

ActivEye is working to integrate smart video with RFID tags and access control in the retail space. And, Mitsubishi Electric, aided by MERL, its Boston-based R&D engineering group, is set to integrate facial recognition into its advanced DVR by next summer.

“The market for facial recognition has n't been that wonderful in terms of reliability, but the software MERL has been working on is supposed to be far more advanced, more reliable and captures the photos the most quickly of any system,” says Jeff Kiuchi, Mitsubishi digital product specialist.

Multiplying manpower

Whether termed as currently in use or cutting edge, most smart video capabilities represent personnel cost-savings for retailers.

“These products allow more manpower flexibility,” Stringer says. “A few years ago, many retailers ran a full loss prevention staff at each location. Now you don't see that as much.”

With the help of IP video integration with POS systems, loss prevention personnel can monitor many locations from one office, GE's Nicholson says. Management can conduct remote tours to proactively identify potential issues from afar. Guards with eye strain can finally rest.

Freeing guards from monitoring video feeds is a clear benefit, says Geoffrey Egnal, CTO of Reston, Va.-based IPIX. “The real reason you want intelligence is you have to pay people to watch this video,” he says. “After 20 minutes, a guard's attention wanes. The computer is permanently attentive. It never falls asleep.”

IPIX recently partnered with ClickIt, Bethpage, N.Y., to develop an intelligent network video solution for retail combining IPIX's high resolution, 360-degree cameras with ClickIt's DVRs. Though this is one of the first forays into retail for IPIX, the company has joined its 360 cameras with technology partners like ObjectVideo and VistaScape before. These partnerships are mutually beneficial, Egnal says. “The analytics are only as good as the cameras they run on,” he says.

Improving operations

Along the way, technology innovators have realized that an intelligent video system is not only smart about security. “Smart video is really transforming digital video recording from a pure loss prevention device into an operations management tool,” Stringer says.

Already several systems, including ActivEye's Smart Impressions, provide the ability to count people entering the store, to measure the dwell time of customers at a display or kiosk, to see who is looking and who is buying and to identify when the lines have gotten too long at the cash registers.

Even facial recognition is imagined as a non-security function: “It's talked about not from a loss prevention standpoint, but from the perspective of ‘we wish we could know when our best customers are in here so we could give them special attention,’” Stringer says.

For several large retailers, these functions are quite real. Howanitz supervises Verint's Solutions Services group and is in charge of development and deployment of Verint's retail solutions. Through this role, Howanitz has worked with Home Depot and Target Corp. to provide people-counting and other smart video capabilities.

In the last few years, The Home Depot has implemented Verint digital video surveillance as part of a $250 million store remodeling program. According to a Verint case study document, “(Home Depot) had three objectives in mind: First, to ensure a safe and secure environment for its 300,000 employees and millions of customers; second, to stem losses from theft, fraud and error; and third, to use knowledge gained through video recording to increase productivity and improve customer service.”

An extensive review of The Home Depot's existing video surveillance had revealed a variety of local store security programs, with no clear way to share information, few economies of scale and little integration with critical business systems. The need for a standardized solution was clear.

Today, trucks or people entering restricted loading areas at The Home Depot initiate the transmission of video images to a security manager's PDA, and the video system is integrated with the POS data. Once it detects that a check-out line exceeds company guidelines, Verint Video Solutions can automatically alert departmental managers to open additional registers, and content analytics can determine the length of time shoppers wait in line to make their purchases.

Deployment of Verint's people counting capabilities married with POS data has allowed retailers “to have a better understanding of traffic trends, to count how many people are entering and also how many sales are being made. Now they can also get a better understanding of what their conversion rates are. This provides a level of accuracy not available before in the retail environment,” Howanitz says.

Progress report

The uses are real, and the technology is available at varying levels — but where does implementation stand? Technology providers report anywhere from zero percent to 50 percent deployment among retail customers, although few clamor to report the retailers' identities.

ObjectVideo, Reston, Va., offers a PC tool, a DSP version for installation in cameras or DVRs and a forensic tool for after-the-fact analysis. Like many technology providers, its traditional clients have been government, airport and other critical infrastructure.

“Applying intelligent video in the retail space is a new thing. Only very recently has it made the jump into vertical markets — one of them being retail,” says Alan Lipton, chief technology officer and director of research and development for ObjectVideo. “We're working very hard to get the retailers onboard.”

Full implementation may come only when retailers are comfortable with the technology, its cost and its capabilities. “The biggest hurdle is education. They need to see the ROI, unlike the critical infrastructure where the return is obvious. We have to figure out the business model for these folks and drive it home to them that there is value,” Lipton adds.

Education is key, agrees Todd G. Libengood, PSP, a project manager for SecuraComm, a Pittsburgh-based independent consulting and engineering firm. “Intelligent video is offered at many different levels from different manufacturers and is no doubt a competitive market. Intelligent video has been around for some time — if you think of video cameras responding to alarms generated by other systems, this concept is frequently used in retail. The new technology of programmable virtual alarms (software driven) and/or directional traffic flow does introduce advantages in retail not easily offered before. The user needs to be educated on the different levels of intelligent video, the cost impact and their required involvement during the programming stage of the newer technology.”

Waterloo, Ontario-based Aimetis Corp. offers several levels of smart video services including: video content analysis software embedded on digital media platforms, such as Texas Instruments DM642, enabling analytical capabilities to reside directly on devices; intelligent video management software systems; and customized professional services. (In April, Object-Video announced the implementation of ObjectVideo OnBoard, a product line that includes ObjectVideo's intelligent video application software optimized for operation with TI's DSP-based TMS320DM64x digital media processor).

Still, given the early-stage of intelligent video adoption in the retail sector, many organizations prefer to try the technology before making an investment, acknowledges Marc Holtenhoff, CEO of Aimetis Corp. Recognizing this, Aimetis allows customers to download its intelligent video software and try the technology for 60 days without obligation to purchase.

For others who want to evaluate how intelligent video can complement their security force in perimeter security, Bradenton, Fla.-based Guardian Solutions has introduced FenceWATCH. It is designed to transition existing fence line cameras and DVRs into an “automated fence line intrusion detection system” to enable security guards to continue to focus on the highly “interactive” access points.

Eventually retailers will become more comfortable with the technology, experts say, especially if they understand the data provided by the new video systems. “People are used to looking at video from an eye perspective rather than a data perspective,” Nicholson says. “Intelligent video takes what is happening in the frame and gives it data significance. Once our market becomes more confident that the data that comes out of the camera is relevant and true, they're not going to want to watch video.”

For now, however, most new smart video capabilities will be in the form of add-ons to existing systems. “The suppliers understand the market. They understand that a retailer is not going to discard the old technology just because a new technology is developed,” says Jack Finefrock, vice president of retail security at Diebold.

Vidient is also pinning its retail hopes on add-on capabilities for video solutions. Vidient CEO Brooks McChesney says his company combines video with other sensors and tools, including optical character reading of license plates, cameras, thermal and near-infrared devices, biometric tools and RFID technologies.

Though Vidient has few retail customers — yet — its work in other industries allows it to “detect things germane to retail: slip and fall, people loitering around loading docks,” McChesney says. “A year ago, these technologies were cutting edge and people weren't entirely sure. Now people have said this technology is mainstream, and the issue is how to deploy it and integrate it with cameras — how it can work.”

What's next on the horizon? Developing more detection points, including the ability to track a person across the facility in non-overlapping cameras, McChesney says.

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ABOUT THE COMPANIES

For information, circle the Reader Service number (listed below) or visit securitysolutions.com

ActivEye Inc.	22
ADT Security Services Inc.	23
Aimetis Corp.	24
Cernium Inc.	25
ClickIt	26
Diebold Inc.	27
ESCO Communications Inc.	28
GE Security	29
Guardian Solutions	30
IPIX Corp.	31
Mitsubishi Electric Corp.	32
ObjectVideo Inc.	33
SecuraComm Consulting Inc.	34
Texas Instruments Inc.	35
Verint Corp.	36
Vidient Inc.	37

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© 2008 Penton Media Inc.

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