Believe it or not, it is possible to realize positive financial impact from loss prevention in retail. In fact, National Stores, one of the fastest growing off-price specialty retailers in the U.S. and Puerto Rico, has proven that with video analytics, it’s not only possible, it’s possible in a big way.
At the NRF Protect 2015 Loss Prevention Conference and Expo, Chris Nichols, Vice President of Loss Prevention at National Stores, explained how the company’s loss prevention (LP) team provides financial value to the company by using video and data insights for their more than 300 locations. The company has transformed its LP program from being mired in inefficiencies to using video analytics for increasing internal theft resolution and impacting sales and customer experience.
Turning Around a Stalled Loss Prevention Program
National Stores re-built its LP program — from its team to its video analytics platform — after the program had stalled. They approached the re-build with three key steps:
- Assessing their business, looking at where losses were coming from and what were the root causes of those losses
- Determining the core competencies needed in their loss prevention program to mitigate those losses
- Leveraging technology to further their loss prevention program
Accelerating Loss Prevention Success with Video Analytics
The LP team selected Envysion for their video analytics platform and saw a huge increase in internal theft resolution within the first month. Nichols then built an in-house analytics team to analyze metrics and daily alerts of suspicious transactions sent from the video analytics system. The team researches high-risk transactions such as refunds and voids, and sends cases to the field with details on stores, employees, transactions, and links to video so the field team can respond to cases immediately.
Increasing the Value of Loss Prevention Across the Business
Once the loss prevention team saw the benefits of video analytics for loss prevention, Nichols said it was “a natural jump” to use the same technology and approach to impact margins. For example, their Envysion video analytics system integrates with their point-of-sale (POS) system. So now, if an employee inputs an incorrect price into the POS system, the company’s analyst team will catch the error immediately, before the store has multiple days of margin drops. The analyst team also uses the video analytics platform to look into other factors that affect the business, including line times and items that aren’t selling well, to identify areas for improvement.