How systems integrators are unlocking the power of AI video for luxury retailers

May 9, 2024
Suppliers of high-value goods are among the most innovative when it comes to taking advantage of the growing benefits of AI-powered video analytics.

Suppliers of high-value goods are among the most innovative when it comes to taking advantage of the growing benefits of AI-powered video analytics. In project after project across the globe, we are seeing solutions adopted by upscale outlets selling jewelry and watches, cosmetics, haute couture apparel and accessories, and luxury vehicles.

These businesses have always had to take loss prevention seriously because of the high value of the goods they stock and the risks they face. They are also familiar with investing in store aesthetics and back-end technology to ensure a personalized customer experience (CX) and satisfaction.

Despite economic uncertainties affecting other parts of the global economy, the luxury sector has fared relatively well, with demand for luxury goods showing 7% year-on-year growth, according to a recent survey.

In the fashion sector, luxury brands are expected to grow by between 4 and 5%, a slight fall on the 2023 rate, but still solid. Cost-of-living headwinds have less impact on the more affluent customers that these businesses cater to.

Another piece of good news is the latest Personalization Playbook, which shows that while over 400 IT retail leaders are looking to cut costs, they won’t hold back from investing in new technology that will enhance customer experiences.

Significant Trends in AI

One of the most significant trends we are seeing across the sector is the adoption of a new generation of video solutions including edge AI cameras and AI box devices powered by deep learning algorithms. These are giving retailers new, more cost-effective ways to reduce theft, improve operational efficiency, and protect staff and customers.

AI-powered video analytics don’t just support more efficient security and loss prevention strategies but are an increasingly powerful tool for understanding in-store activity and customer behavior.

Systems integrators who understand how to deliver cost-effective solutions that prevent losses and increase retailers’ profits can take advantage of these opportunities.

The market is crowded, and buyers should be warned: a) not to be misled by overpromises on accuracy, b) not to overpay for AI video tech, and c) not to get locked into spiraling license fees.

AI Easier to Adopt than Many Retailers Realize

One important development that customers sometimes aren’t aware of is that they can now use the same cameras for both surveillance and business intelligence – saving on installation costs and in-store infrastructure footprint – just by using simple plug-in AI boxes.

With this option, adopting AI video is no longer complex or expensive, meaning that even smaller retailers can gain valuable new insights into customer behaviors, preferences, and buying choices.

This approach – using a simple plug-in AI box that seamlessly connects to NVRs—can easily be replicated across multiple stores, making it ideal for small chains with stores looking to improve decision-making around individual team performance and those looking to expand their branch networks. It also makes integrating AI video into wider systems, such as ERP software, easier.

Managing Day-to-Day
Operations More Efficiently

Upgrading camera systems in this way is helping retailers manage day-to-day store operations more efficiently, with new uses emerging all the time.

For example, queue management analytics are being deployed to monitor and manage checkout and return counters' waiting times. With automated analysis of queue lengths and alerts when customers are left waiting beyond pre-determined limits, retailers can make real-time adjustments to staff allocation. Supervisors have always had this task on duty, but the new element is automation: AI takes the pressure off front-line managers and ensures consistency while improving the customer experience.

One important development that customers sometimes aren’t aware of is that they can now use the same cameras for both surveillance and business intelligence.

With hard evidence that reveals new insights and allows better decision-making, AI supports better strategic planning.

For example, heat maps are used to understand hot zones and dwell time in specific areas of the store, customer interactions with products and responses to marketing displays. With this data, retailers are gaining valuable insights into customer preferences, enabling them to tailor their offerings and marketing strategies more responsively.

Developing New Retail Strategies

Heatmaps can also improve understanding of which areas within stores have lower footfalls or “dead zones.” This supports new strategies, for example, showing better ways to adapt stores by adding seating or selfie areas, making stores instantly “Instagramable,” or using areas for pop-up events or small coffee or cocktail bars.

Heatmaps can support more far-reaching redesigns, too, such as adapting store layouts to support the omnichannel experience.

And people counting analytics are being deployed to help retailers understand the directional flow of customers within stores. By analyzing foot traffic patterns, store designers can optimize layouts, product placement, and staffing to improve customer engagement and increase sales. This data can also help determine peak hours by day, week or month so resources can be allocated accordingly.

Empowering Local Managers and Staff

Brick-and-mortar retailers are, at their heart, a people business. And with luxury retail this is particularly the case. Customers want positive interactions with knowledgeable store staff who are engaged and motivated.

So, staff morale and retention play crucial roles in perfecting personalization. This means that any use of technology must be focused on supporting staff, increasing their job satisfaction and sense of value, rather than undermining them or making them feel as if they are not a trusted part of the wider business. 

When used correctly, conventional video security systems do this by helping to keep staff safe and preventing losses, which protects profitability. 

Customer and in-store analytics can now take this a step further. For example, at-a-glance dashboards in-store, not just at headquarters, can empower local managers and their teams to make them feel they are helping to boost profits and build customer loyalty.

By encouraging greater autonomy around marketing, merchandising, and customer service — with actionable insights from analytics to back up local intuition as to what works for each store and its clientele — head office teams can nurture and retain local talent, ensuring they feel part of a wider and more collaborative business and encouraging individual staff and managers to take more initiative.

AI video analytics used in this way encourages more imaginative, strategic thinking and allows intelligent risk-taking by trying out new ideas at more local or across regional branches to be tested, measured, and improved.

Multi-Stakeholder Buy-In

We are confident that many new benefits from business intelligence will emerge from AI video - and that we’ll be working closely to identify luxury retailers’ pain points and challenges throughout the purchasing journey and ways to solve them.

To perfect personalization, retail teams need to work more collaboratively, and success relies on systems integrators getting the appropriate buy-in and the right stakeholders involved, which is exactly what our partners have been doing.

The sales cycle can be more complex, yet the result is larger budgets combined from multiple departments and rollout programs across multiple stores nationally and even internationally.

About the Author: Jason Burrows is IDIS America’s regional sales director, Western U.S., in charge of all sales operations in the western half of North America. With over twenty-eight years of security industry experience, Burrows has held key positions with the largest brands in video surveillance manufacturing and distribution. Throughout his career, he has worked closely with integration firms and large-scale end-users including military, education, cruise lines, theme parks, shipping ports, metro transit, and major municipalities.