Retail Market Uptake on IP Video to Be Strong

Experts point to diversified ROI models, need for remote access as key drivers


Axis Communications, the Swedish network video company, is counting on retail as being the big market breakthrough for network (IP) video surveillance.

It's a simple case of the numbers, says Axis Communications' Director of Business Development Johan Akesson.

"The retail market represents 25 percent of all CCTV camera sales worldwide," said Akesson, speaking at a press conference in Copenhagen to a collected group of security and retail industry journalists. "The research says, however, that retail represents only 10-15 percent of the network camera market, so obviously there is a lot of growth potential."

Undoubtedly, much of this retail market has been saturated by the traditional analog camera infrastructure and has been for years, but according to industry security leaders like David Gorman, who formerly headed Wal-Mart's loss prevention operations and who now works as an LP and security consultant, there are enormous business benefits that can be obtained from network video and the digital storage that is associated with network video. For one, he says, analog video was often a challenge in surveillance investigations -- especially in the days of VHS tapes, but also with centrally located DVR repositories. The trend toward network video increased ease for remote monitoring and off-premises management of surveillance video.

In fact, while Gorman notes that retail loss prevention studies say that just 20 percent of video surveillance cameras are not monitored, he says the number could even be the inverse. "I suspect that most respondents are lying about this, and I don't think I'd believe that percentage even if they [retailers] said that 50 percent of their cameras are monitored." Instead, he says, the cameras are primarily being used in an investigative/after-the-incident manner.

Flemming Bang Dammann, the corporate director of security for Danish grocery chain Dagrofa, fully concurs.

"If you surveyed me about what percentage of our cameras we monitor, I would say 'zero'," he candidly admits. "We don't monitor our cameras, and instead we take a reactive approach and use the video for investigations."

According to Dammann, who is actively transitioning the company's 164 stores to an IP video system that is running Milestone's XProtect video management system, the video is available to the store manager, the security team and the internal audit department -- making distributed and remote access vital to his operations. In fact, asked to list his top requirements for video surveillance (which is where most of Dragofa's security budget is spent), he mentions ease of use, high quality images, integration with point-of-sale (POS) systems, and of course remote access.

And while remote access and the new generation of megapixel network video from companies like Axis, IQinVision, Arecont and others may be solving those problems for retailers like Dagrofa, industry analysts like Steve Rowen from Retail Systems Research, say that security is not the only market driver for retail video surveillance solutions.

From work the firm did for a recent report titled "Digital Video Surveillance Technology 2007: Security, Loss Prevention and Beyond", Rowen says they were finding retailers increasingly interested in how video surveillance systems can be shared so that retail marketing and operations departments can gather information on such things as merchandising, store traffic patterns and operational data mining. Rowen says that retailers are telling the research firm that they are also increasingly interested in network video surveillance add-ons like video analytics that can aid them in end-cap analysis or dwell time.

Jumbi Edulbehram, who works for Axis in the U.S. as strategic channels director, says video surveillance is having to prove return on investment (ROI) to the retailer community. He points to those adjunct technologies that work so well with network video -- such as retail queue management systems that can identify when check-out lines are too long, or traffic pattern data mining that can be run on the video data to tell how customers move through the store.

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