LP Meets IT for Complete Managed Business Infrastructure, Security and Intelligence

Collaboration ushers in a new era of smart, secure retail technology to support bottom-line impacting business goals.

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Table of Contents

Introduction: The State of Retail ......................................................................................................3

Section 1: The Changing Face of Loss Prevention ......................................................................4

The Technology Impact ...................................................................................................................................................... 4

The ROI Imperative .............................................................................................................................................................. 4

The New Loss Prevention Professional .......................................................................................................................... 5

Section 2: Loss Prevention Meets Information Technology .......................................................6

Security’s Network Effect .................................................................................................................................................. 6

More Than Just Security ..................................................................................................................................................... 6

An LP/IT Partnership that Works ..................................................................................................................................... 7

Section 3: Build a Scalable Network Infrastructure .....................................................................8

Network Planning and Collaboration ............................................................................................................................... 8

Key Network Considerations ............................................................................................................................................ 8

Section 4: A Holistic Managed Network Strategy ........................................................................9

True Business Visibility....................................................................................................................................................... 9

About Vector Intelligent Solutions ...................................................................................................10

About the Author: Steven White .......................................................................................................11

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This whitepaper is designed to help loss prevention (LP) professionals better navigate the evolving retail landscape, and uncover the customer experience and business intelligence opportunities afforded by information technology (IT) collaboration.

Introduction: The State of Retail

For the average consumer, the lines between online and offline are blurring. Two-thirds of U.S. consumers own smartphones1. With the web at their fingertips, they are able to shop for and compare products at anytime, from anywhere. For brick-and-mortar retailers, this has mixed effects.

On one hand, consumers are more educated than ever before, accessing reviews, pricing information, merchandise details, manufacturer research and product availability online. But, this knowledge also changes shopper behavior. More options gives rise to showrooming2—21% of consumers use their mobile devices to assist while shopping3—effectively increasing competition for every sale.

Mobile also introduces opportunities. Consumers no longer see shopping as offline versus online, but rather as a converged, omnichannel experience. Because of this, retailers are starting to embrace a similar mentality, integrating kiosks, mobile point of sale (POS), in-store mobile promotions, and flexible ordering and shipping options into their physical stores. Clearly, the optimal customer experience requires a backend technology infrastructure that supports such innovation.

The challenge for retailers lies in keeping up with customer demands and emerging technologies, and having the data to make strategic business decisions. Therefore, a significant opportunity exists for LP and IT teams to support in these areas of need and help propel their organizations forward.

1Digital Consumer Report, Nielsen, February 20142Using a brick and mortar store to decide on a product, but buying it online at a lower price3Showrooming and the Rise of the Mobile-Assisted Shopper, Columbia Business School, September 2013

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Section 1: The Changing Face of Loss Prevention

As evidenced in the Introduction, technology dramatically impacts how retailers interact with customers. It also, however, equips the LP professional with a more robust toolset, complete with advanced security applications and smarter analytics.

The result is an evolving role—one in which LP professionals are transitioning from standalone crime prevention specialists, to purveyors of overarching technology, providing data that is critical to store operations and bottom-line impacting business success.

The Technology Impact

Advancements in technology have enabled a wide array of new network-connected security systems that are more cost-effective, convenient and accessible than their earlier counterparts. Yet, many retailers still deploy older technologies (e.g. analog closed-circuit video systems and telephone line-based alarm systems), in which they are more familiar.

Opportunities exist to differentiate and improve operations through technologies, such as:

•IP Video Surveillance: View and share video throughout the enterprise to improve operational efficiency, conduct audits and improve customer service.

•Video Analytics: Count customers, understand their movement and shopping behaviors, and identify operational issues through automated, intelligent analysis of video.

•Mobile Solutions: Manage your security program from a computer or smartphone, and receive automatic alerts for critical incidents.

•Energy Management: Integrate temperature and lighting controls to maximize savings when the store is unoccupied. Establish business rules for receiving doors and monitor their use to verify compliance.

•Access Control Systems: Regulate and supervise access to cash offices, network and server equipment, and other critical areas using cards or biometrics.

•Point of Sale Transaction Monitoring: Identify refund and return fraud, stolen credit cards, cashier theft and other unusual activity. Combine with video analytics to calculate conversion rates and identify events such as refunds without a customer present.

Because many of these solutions rely on the network to run, there is a greater need than ever for IT and LP to collaborate.

Together, these teams can leverage new and emerging security applications to cut costs, feed valuable data into other departments and support strategic initiatives. This, in turn, makes the LP department more valuable as these technologies are implemented.

The ROI Imperative

Historically, physical security was seen as a necessary expense that was simply accepted by the C-suite as a cost of doing business and minimizing risk. Today, as these systems migrate onto networks, their ability to deliver data and visibility into store activity creates new opportunities for cost savings, performance improvement and added revenue.

As a result, LP professionals must think beyond shrink and risk.

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It is critical for LP to identify technology upgrades that deliver business value, achieving buy-in and support from the C-suite by effectively demonstrating the return on investment (ROI) of expenditures. In an era where everything can be measured, data wins the day.

For instance: the store operations team can use queue times and customer traffic analysis to ensure optimal staffing; the marketing department can plan more effective promotions by identifying the most popular endcaps or displays in the store; and the executives can view traffic and conversion reports to measure performance.

LP professionals that embrace the power of data and ROI analysis are more likely to:

•Influence bottom-line performance results within their organization.

•Recommend smarter, data-driven solutions to existing challenges.

•Garner support from colleagues and leadership.

•Win larger budgets, and gain greater responsibilities.

•Better position themselves for a seat at the strategy table.

The New Loss Prevention Professional

The advent of sophisticated, integrated technologies and smarter analytics has shifted the role of the LP professional beyond “catching the bad guys.”

Top LP professionals today take a strategic look at the systems and data in their stores to identify how they can support cross-organizational business goals. They think beyond loss prevention and theft, and work collaboratively with the IT department to guarantee infrastructure, store operations and merchandising needs are also fulfilled.

They embrace data, and use the business intelligence gleaned from it to guide decision-making and measure impact. By doing this, the LP department is seen as providing more value to key company stakeholders.

Don’t run the risk of getting left behind as conversations extend beyond physical security. While change can be intimidating, the LP professionals that understand technology’s possibilities stand to benefit in the new retail landscape. Take proactive steps to educate yourself on the opportunities afforded by the latest security technology or seek out a knowledgeable partner that can guide you in the transition.

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Section 2: Loss Prevention Meets Information Technology

The LP professional can’t do it alone. Security applications are too intertwined with the network and other departments to be successful in a vacuum. It’s only when LP joins forces with IT that true business visibility can be achieved.

Security’s Network Effect

Retailers are leveraging their existing broadband networks for more and more services beyond just connectivity. Services such as: analytics, technology testing, business intelligence, real-time marketing, quality assurance, remote infrastructure management and security. As new bandwidth-intensive applications (e.g. video, mobile POS, kiosks, etc.) are evaluated, they must be looked at in relation to the overall IT infrastructure.

For example, IP video has numerous benefits over analog CCTV, including better quality imaging, lower total cost of ownership, more flexible remote access and greater ability to support video analytics. However, it also requires greater network bandwidth and data storage.

In fact, the bandwidth requirements can vary widely based on cameras used, the degree to which they are accessed across the wide area network (WAN), and future plans for cloud storage and centralized command center operations.

Because of such, network managers need to be involved in testing and pilots for all networked applications from the start; often investing in a store-replicating lab environment as well. A common mistake is assuming that something that worked well at one location will automatically scale to others, and opting not to involve the IT team. This can have disastrous consequences.

Enterprise Strategy Group (ESG) research found that 91% of video surveillance deployments involve IT departments4, and they should.

To avoid WAN and corporate data center problems, all internal stakeholders need to collaborate on every IP-based implementation—no matter the size.

More Than Just Security

Similarly, the data gathered from physical security applications can’t be looked at in a silo. Retailers want broader insight and intelligence into their operations at all levels. This requires a strategy to gather and analyze information across departments. For example, consider the following:

•LP systems can measure customer traffic, the use and misuse of receiving doors, and the timeliness of management functions like store openings and closings.

•IT systems can gather Wi-Fi device analytics and provide a portal through which customers can be served Internet access and tailored promotions.

•Marketing and store operations increasingly involve technology deployments, such as smart fixtures, digital signage and push-for-assistance stations.

Independently, these are point solutions, but the data and systems can be aggregated to create a much more complete picture. What if the LP data were used to reduce heating and cooling costs by driving down the use of receiving doors? What if video audits were used to guarantee compliance with merchandising display installations? What if in-store customer analytics, such as time spent in front of a particular display, was fed to the marketing department to trigger real-time promotions?

4The IT Factor of Surveillance: Research Reveals 91% of Video Surveillance Deployments Today Involve IT Departments, Axis Communications, March 2014

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Recognizing the value of information to other departments and initiatives is critically important to achieving peak results and the best possible ROI. True business insight is derived only with a collaborative, horizontal approach.

If deployed in this manner, many security applications, such as IP video and electronic security systems, can address numerous business needs organization wide. For instance, LP equipment can fuel insight into data-hungry groups such as:

•Operations: Gain in-depth knowledge of inventory and traffic patterns within stores and distribution centers to optimize processes, procedures, layout and transportation for maximum efficiency and security.

•Human Resources: Integrate video footage into employee training sessions to show the right (or wrong) way to handle a situation. Relatedly, pinpoint staff misbehavior at the individual or group level, and address it proactively.

•Marketing: Better understand inventory levels and in-store traffic to gauge the success of marketing campaigns and improve targeting efforts.

When information is brought together in meaningful ways, it provides new insight into how stores, employees and customers interact.

An LP/IT Partnership that Works

Encourage collaboration between your LP and IT teams to ensure networks can support security applications without affecting other critical systems, and data is consolidated and reported into useful business intelligence.

The goal is a mutual partnership, in which both sides respect one another and work together to drive vision, initiatives and projects that benefit the overall business. Those retailers that perfect this relationship will have a significant competitive advantage against those that do not.

Below are three tips to help you foster close and productive collaboration.

1. Give each a seat at the table. Make decisions together, leveraging one another’s areas of expertise for the betterment of the business as a whole. In the end, you need each other. No one is left out, and smarter choices are made, when teamwork is at play.

2. Show mutual respect. From the LP perspective, learn to be an internal customer. Security is not the only item that IT has on its plate, which may slow project turnaround times. Pull IT into conversations with plenty of advance notice, and build reasonable timelines and team expectations. On the IT side, understand the unique value that LP brings to the table—namely, they are in the store everyday with customers, and can provide perspective that others cannot.

3. Learn the others’ lingo. Master the other team’s terminology to avoid communication roadblocks. Educate those in the field too. The goal is to get everybody on the same page and speaking the same language.

Whether it’s POS, RFID or IP video, the next step in security technology involves IT, and there’s no getting around it. When LP and IT tackle projects hand in hand, they can achieve much more than either team could accomplish alone.

While most retailers have deep knowledge on their online buyers due to website and ecommerce analytics, much less is known about brick and mortar store shoppers. With technology maturation, this doesn’t have to be the case. When LP equipment is equipped with analytics, retailers can start to answer questions like:

•How long are customers in the store?

•How often do they visit?

•In which areas of the store do they dwell?

•How many customers visit the fitting room?

•Where is store traffic heaviest?

This information can, in turn, be used to improve shoppers’ experiences. IP video is a good example here as it enables people counting; heat maps; traffic pattern, dwell time and queue analysis; and other types of video content analysis.

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Section 3: Build a Scalable Network Infrastructure

Balancing security, services and capacity will continue to be top of mind for retail IT departments. In addition to POS and other critical systems that have historically resided on a retailer’s network, IP-based security systems and omnichannel applications (e.g. kiosks, digital signage, etc.) provide an added level of complexity.

If properly architected, a modern IP network can securely support all of these technologies; however, upfront, collaborative planning is required.

Network Planning and Collaboration

It’s important to bring all key players together to discuss current needs and future objectives. As demonstrated in earlier sections, the lines between LP and IT are fuzzy—with areas like physical security, networking and database management commonly crossing paths.

Having experts in various disciplines at the table promotes conversations around potential network issues and bottlenecks related to the objectives, and helps guarantee project deployments are planned logically and cost-effectively, and technologies are maximized for organizational impact.

Key Network Considerations

In discussions, be sure to cover core network considerations, such as:

•Scalability and Adaptability: Flexibility is crucial with the rate of change in retail. Without the ability to quickly adapt and support disruptive technologies, retailers run the risk of lagging behind peers.

•Security/PCI Compliance: Keep customers’ payment card details and personal information, and confidential business intelligence, secure with firewalls, data encryption, anti-virus software, access control and ongoing monitoring.

•WAN Performance and Resiliency: Speed up applications on the WAN by managing bandwidth, latency and packet loss in your network configuration. Increasingly, this means installing multiple broadband connections in each location.

•Reliability and Business Continuity: Ensure continuous uptime; consider disaster recovery plans and back up security options, such as wireless failover and same-day network hardware replacement, to mitigate risk.

•Access Control: As partnerships increase to support customer-facing digital solutions (e.g. intelligent fixtures, in-store WiFi), put security measures in place to control network access and safeguard information.

With a scalable, forward-looking network, retailers are better positioned to support initiatives ranging from supply chain visibility to omnichannel marketing to centralized video and analytics. Build yours with a strategic approach that considers cross-departmental business needs.

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Section 4: A Holistic Managed Network Strategy

Building, deploying and supporting a network for optimal performance can be a challenge. This is where a managed network service (MNS) provider can ease the burden on IT departments. Network consolidation under one single-source partner benefits retailers in the following ways:

•Increased Productivity: Achieve more efficient technology rollouts and pilots that require less internal resources.

•Cost Savings: Convergence eliminates unnecessary operational expenses, maximizes the value of technology investments and streamlines vendor relationships—all of which directly impact business profitability.

•Improved Application Delivery: A reliable, well-maintained network translates to improved performance in alarm monitoring, video surveillance, analytics and access control, among others.

•Organizational Future-Proofing: Deploy a modular framework that is flexible and can adapt as technology evolves. Broadband options are improving constantly, and your network environment must be designed to readily take advantage.

True Business Visibility

Whether you go at it alone, or bring in a partner to support, a collaborative approach to LP and IT is the only way to gain true business visibility—or insight into your business through data analytics and intelligence gathering. With solid data collection and reporting, better support operations, marketing, finance and security objectives.

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About Vector Intelligent Solutions

As an industry leader in retail security, Vector Security anticipated future technology needs and positioned itself to meet customer demands for broader insight and intelligence into their operations at all levels.

In August 2013, it acquired Industry Retail Group (IRG), a Gartner-recognized provider of customized managed network services. IRG serves thousands of Fortune 1000 retail sites, quick-serve restaurants and convenience store chains.

Together, the two companies make up Vector Intelligent Solutions.

By pairing IRG’s industry-leading managed network solutions with Vector Security’s physical security solutions and analytics, Vector Intelligent Solutions is able to provide customers unmatched insight into their businesses through data analytics, intelligence gathering and connectivity solutions.

This True Business Visibility helps organizations meet operations, marketing, finance, merchandising and security objectives—all with a convenient, single-source partner.

Contact us today to learn more about our intelligent retail solutions, or follow us on Twitter and LinkedIn for updates.

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About the Author: Steven White

Steven White is Corporate Vice President of Business Development for Vector Security. He oversees security technology for the national accounts division, and the integration and operation of the company’s managed network services business, Industry Retail Group (IRG). He has more than 20 years of security industry experience in positions including enterprise sales, product development and general management. He resides in Austin, Texas, and can be reached at swhite@vectorsecurity.com or 512-292-0396.

Vector Security is a top 10 integrator of physical security solutions for North American retailers and multisite businesses, including many Fortune 500 companies. Today, Vector Security serves more than 45,000 national account sites across North America.

vectorsecurity.com

Industry Retail Group (IRG) is a Gartner-recognized provider of customized managed network services designed and deployed based on customer needs and business objectives. IRG serves thousands of Fortune 1000 retail sites, quick-serve restaurants and convenience store chains.

industryretail.com