The retail vertical market is fickle. It's highly predicated on the state of the economy, which we know has been in the dumps for the past several years. Its losses come mostly from internal theft and quite frankly the market hasn't had the funding necessary to expand their surveillance or other loss prevention solutions.
There are exceptions: big box retailers or lucrative upper-end chain stories. And there is business out there, but it's not just about hardware and slapping in systems. It's about providing real value in the way of services that the customer can use not only for loss prevention, burglary and theft but also those that help them dig down deep in business solutions to target their market more fully, address distribution, warehousing and buying trends and translate into a robust total cost of ownership and value they can sink their teeth into. Managed video, analytics, access control and other services will sell when this market turns around and if integrators can show the market how they bring more than security to the table.
"Retail is a huge opportunity for systems integrators," King Rogers, chief executive officer of KRG Analytics Inc., Edina, Minn., and a co-founder and principal of King Rogers Group LLC, told the audience at the 2011 Milestone Integration Platform Symposium conference in San Antonio earlier this year. "You have to make technological decisions, because they need your help."
Rogers said employee theft is the number one cause of loss in the retail sector. "Solutions providers have the opportunity to drive that retail loss down. The sales cycle in retail is at least two years, so you have to be patient. These users need you to tell them what they need to know. Intelligence is what is going to sell the retail end user. Reducing employee shrink is their pain point and what they need," he said.
Retail 101-do your homework to pass customer muster
Rogers said that if integrators are able to show how retailers currently can get more out of the existing systems, they will be trusted and will come back once they are ready to make the leap. "The bottom line is to build relationships," Rogers continued. "Come up with more creative uses for their existing equipment; they want better use of it before they replace it. As far as what's budgeted or planned for the retail sector in solutions, most are all video related, such as real-time alerts on point of sale (POS) overrides, automated returns processing and such."
According to Rogers, some of the key services/requirements of the vertical market include:
- The ability to find more ways to identify shrink activities,
- The ability to make loss prevention more efficient, and
- The ability to centrally manage the auditing of POS data.
"The more ability you provide to address loss prevention, the more valuable you become," he continued. "Cloud storage is one of the most exciting things to happen to us as an industry. Video surveillance as a service: 24-hour video guard service with voice-down capabilities; construction sites; multi-campus and quick service restaurants hold great opportunity."
He added that the bottom line is harnessing the value of video, with some of the following services:
- Managed video-based business intelligence services,
- Video analytics as a service,
- Hosted, highly secure video storage, and
- Video and business intelligence-based consultative services.
"Right now, retailers are strapped, but they are starting to embrace the value of video, especially if integrators can offer it as a business intelligence tool. It's possible to maximize the value of everything you are bringing to their desks. Integrators also need to speak the language of loss prevention or use a consultant or someone who can teach them. That's critical."