Ramesh Jayaraman, MD – ADT India (a division of Tyco International), discusses security challenges and solutions in retail spaces.
Q. What is your view of the Indian retail industry with respect to having security systems in place?
The retail industry is gaining tremendous momentum in India, both in the metros and tier 2 towns. With the mushrooming of malls and large retailers, the retail landscape has changed. Along with this unprecedented growth, the threat of security and unique challenges are also growing as retailers enter uncharted areas. At the same time, awareness of thefts whether it is internal or external, organized or unorganized has also increased over the last few years.
The security challenges of the retail world are unique and depend on the retail space and nature of operations. Retail companies operate under wafer thin margins, pilferage would further dent their bottom lines. The retailer today looks at “store performance” as a key factor rather than deploying devices / solutions just for the sake of loss prevention.He could invest in a range of solutions starting from a base access control package for managing his own employees to scaling up to integrated solutions which aids in the retailers determining the performance of the stores.
The markets are also becoming more open and there is considerable exposure to the latest technologies from developed markets. This is forcing retailers to look at ways to protect their profits. There is also an increasing interest in store performance solutions and in retail business intelligence platforms which help to track people, their movements, and pattern of spending inside the stores. We, as solution providers, urge the customers to look at the requirement in stages as we believe in providing scalable solutions.
Q. What are the main concerns of Indian retailers?
The Indian retail industry has been focusing on growth and expansion during the past decade. However, for most part of the decade, they have failed to adequately recognize the fact that shrinkage is denting their margins and profitability; they have also failed to deal with the problem head on. In this highly competitive economic scenario, with global players entering Indian markets and local competitors expanding, the external pressures on margins driven by aggressive promotions to garner higher footfalls and excess inventories to meet any stock-out situations, and the need to conserve working capital, more and more retailers are prioritizing on their loss prevention issues. In fact, it is the successful retailers who place loss prevention on a higher priority.
Retailers are most concerned about becoming larger targets for shrinkage as they grow, particularly for tier 2 and 3 retailers. For smaller retailers, employee-related shrinkage remains a top concern, Yet, as revenue rises, so does the trust in employees. Small retailers are troubled more by employee theft, while large retailers by consumer theft. Any technology refresh must eliminate the mundane work of balancing, cross-checking and low level data analysis, the essential value of business intelligence layered on top of existing investments.
Q. What advise would you offer them?
In India, retailers experience about two times the thefts when compared to their global counterparts. It is also long overdue that retailers get their perpetual inventory systems under control. It is simply not possible to get a handle on shrinkage when the data is only available by department or category. Further, as it relates to organized retail crime, the smallest retailers are often the biggest targets, but don’t often recognize it as such.
All retailers should work more with local law enforcement and stay up to date on the tools and techniques of the largest retailers. Because Loss Prevention is one of the rare components of retail not seen as competitive, there are myriad opportunities for retailers to learn from one another’s experiences. While the keys to having a better perpetual inventory system may be closely guarded, the tools and techniques to keep employees in line and customers honest are openly discussed, particularly at well attended industry events. Finally, keeping Loss Prevention up-to-date, and shrink under control, requires a continuous commitment with constant improvements. With difficult economic conditions, high unemployment and technology advances, thieves aren’t going anywhere; they are only more desperate and sophisticated.
Q. What internal/external security products and solutions is ADT offering retailers?
ADT provides customized security solutions that fit the unique needs of modern retailers. The full spectrum of solutions and products extends from Sensormatic Electronic Article Surveillance (EAS), video surveillance, remote viewing, video analytics, 24/7 monitoring solutions and fire detection, to the more robust solutions that encompass point-of-sale data mining and integrated technologies.
These solutions go beyond just loss prevention; in fact, they can provide the tools for improved operations efficiencies. For instance, the electronic article surveillance systems that are backed by the power of Sensormatic, can help protect a variety of exit widths for any store setting. Besides exit coverage, integrated deactivation solutions, disposable labels, reusable hard tags, we have introduced our new UltraLite Pinless Tag and Alarming SuperTag.
From EAS systems, people-counting devices to point-of-sale terminals and video surveillance systems, retailers can easily collect store data and transmit it over the store’s IT network so that it can be analyzed and delivered in graphical, easy-to-read exception reports. It helps to turn information into actionable store intelligence.
Our aim is to ensure all around security during open hours and closed hours with our intrusion detection and 24×7 monitoring services. The intrusion detection security alarm systems allow employees in one area to be productive and move about freely, while other parts of the building are safely secured. This helps the retailers’ assets to be completely secure, and they can operate their business more safely, efficiently and profitably. From a single door edge device to control a specific entry point in a store to an enterprise wide solution for corporate headquarter locations or distribution centers. Access Management by monitoring and restricting entry, protection of valuable assets, and sensitive areas from theft or damage is enhanced. We are providing security solutions to leading retailers such as Lifestyle, Shoppers Stop, PVR, Muthoot Fincorp, Best Seller, GRT, to name a few.
Q. How can a retailer optimize security applications within his store?
All security applications must be mindful of the ergonomics of store design. While security measures should tackle shrinkage effectively, retailers should ensure that security is never at the expense of good customer service. As competition in retailing intensifies, retailers need to make their store processes as streamlined as possible so that they can provide greater levels of efficiency as a means of driving down costs and delivering improved customer service. It is, therefore, important that security applications are carefully designed with these aims in mind. Just as we have become familiar with the idea of designing security systems that blend in with the look and feel of a store design, we should also ensure that the technology performs seamlessly within the smooth operation of a store.
For instance, ADT’s Sensormatic® electronic article surveillance (EAS) systems utilize Ultra Max® acousto-magnetic (AM) technology and offer high levels of detection. However, ADT feels that it is just as important that the systems are designed to minimize false alarms. This helps ensure that the positive impact of the EAS systems in a retail space is not adversely affected by numerous false alarms that require the attention of staff and disturb the store’s environment, thereby annoying the customers. Wherever possible, security systems should combine with current store processes rather than add to them.
Q. How can security applications improve a store’s efficiency?
Intelligent use of security applications can even be used to provide management information that can help drive further efficiencies. For example, people counting technology when integrated into EAS pedestals, and linked with POS and video surveillance systems, can be used to measure the effectiveness of store promotions. It can establish traffic flow patterns in the aisles and at checkouts, and help the retailer to determine the number of staff required atdifferent times of the day. Security technology when applied in a retail space must avoid adding unnecessary operational demands on the store’s environment. In fact, security systems and loss prevention technology should work in synergy with the retailer’s operational processes so that they can realize greater efficiencies and offer improved customer service.
*This interview was originally published in November- December 2011 issue of IndiaShop.
