Retailers Turn to Advanced Surveillance Solutions as Shoplifting “Crisis” Continues to Plague the Industry

New York City grocery chain Fairway Market was reported this month to be using biometrics technology, like facial recognition and eye scanning, to prevent shoplifting. The grocery store chain will join the ranks of other retailers and grocers, like Macy’s and Albertson’s, that have used facial recognition and biometrics data to combat theft.

In 2022, the US Chamber of Commerce’s chief policy officer said retail theft is becoming a “national crisis.” According to a survey released by the National Retail Federation (NRF), retailers, on average, experienced a 26.5% increase in organized retail crime in 2021. Almost half of respondents reported that their loss prevention and asset protection budgets were increasing, with many retailers expecting to spend more on technology and equipment to protect their stores.

Retail companies are some of the most important customers in the video surveillance market. As retail crime continues to grow, video surveillance companies should expect to find greater demand among one of their most consistent customers.

The retail industry has always been well-serviced by the video surveillance market. Loss prevention has been a consistent priority for retail customers, and video surveillance cameras are important tools used by retail establishments to defend their in-store products. Retailers are also important customers for video analytics solutions for operational efficiency. Using surveillance cameras and accompanying video analytics software, retailers can observe customer behavior to gauge future spending and satisfaction. Perhaps more so than any other vertical, retail has been instrumental in moving video surveillance technology beyond its historical use in security.

However, with the recent rise in shoplifting, retailers may once again view video surveillance cameras primarily as security tools. Grocery and retail chains like Fairway Market in New York City, Southern Co-op in the United Kingdom, and Macy’s in the United States, have all been reported this year to be using facial recognition technology to deter thieves. In the NRF survey, 12% of respondents said they were implementing or planning to implement facial recognition in their stores, and 29% intended to implement or were implementing AI-based Point-of-Sale (POS) or self-checkout (SCO) video analytics. Amid this “crisis,” retailers are looking to video surveillance solutions to help combat the recent rise in crime.

Facial recognition cameras are particularly well-suited to the current climate, as retailers are confronting growing incidents of organized retail crime, which are large-scale thefts typically orchestrated by groups of professional shoplifters. One study showed that almost half of shoplifters are repeat offenders. New York City Police reported that in 2022, just 327 individuals accounted for 30% of the 22,000 shoplifting arrests in the city. Facial recognition cameras can be loaded with pictures of known shoplifting suspects, and when a camera detects a face that matches someone on this “watch list,” the appropriate parties in the stores can be alerted. These watch lists can sometimes be shared with other retailers so that multiple chains can recognize habitual shoplifters.

Many video surveillance vendors are offering their products as security solutions specifically tailored for retailers. BriefCam, Solink, Oosto, and Hikvision view their video analytics products as solutions for retailers to reduce theft. Oosto specifically markets its facial recognition technology as a tool that can be used to quickly identify shoplifters in real-time.

Video analytics and surveillance companies should be aware that the right surveillance solution for each retailer will often depend on the characteristics and specific concerns of the store. Some retailers might be currently struggling with thefts at self-checkout counters, where customers can avoid scanning a product or purposively scan a cheaper bar code to avoid full payment. These retailers would most benefit from POS/SCO video analytics, while facial recognition solutions might be particularly beneficial for big-box stores struggling with repeat, professional shoplifters.

It is also important to note that retailers are interested in surveillance technologies beyond facial recognition cameras and POS video analytics. The 2022 NRF report stated that retail customers are also interested in Radar Frequency Identification (RFID) systems to manage inventory, and some are planning to invest in or are already implementing license plate recognition and Artificial Intelligence (AI) perimeter surveillance technologies. Knowing what solution is best suited to a particular store will help companies identify the appropriate customer for their specific products.

Vendors should also be aware that there are different regulations around biometric data gathering depending on the location of the retailer. The New York Times reported that customers in New York City were alerted by Fairway Market that biometrics information would be gathered at one location because the store put a notice sign on their door—something companies are required to do by city law if they collect biometrics data from customers. Certain establishments in the city are also not allowed to sell or trade the biometrics data they collect from customers. As retailers seek to battle the rise in shoplifting, video surveillance vendors should know the scope of the problem and how each local government balances crime prevention with privacy concerns.