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Inside Retail & Sensormatic

O2O trend transforms Sensormatic into a data-driven retail partner

An RFID tag is deactivated at checkout as the product’s journey is complete to customer.

The growing global convergence of online and offline shopping has helped accelerate loss-prevention specialist Sensormatic into the world’s largest data-driven solution provider serving the retail sector. 

Sensormatic, founded in 1966, started out manufacturing loss-prevention tools, but through acquiring other businesses the company has progressively expanded into what is now best described as a connected infrastructure, also monitoring and analysing footfall insights, RFID inventory intelligence and AI-powered analysis, explains Singapore-based Daren Ng, GM at Sensormatic Loss Prevention Asia Pacific. 

Most retailers – and their customers – are familiar with Sensormatic’s storefront loss-prevention systems. Pedestal-style sensors are designed as a visible deterrent to customers considering shoplifting, but there are more discreet versions hidden by floors, ceilings or doors. Years ago these might have merely triggered an audible alarm, but in today’s world the recently relaunched Sensormatic IQ platform and its retail-specific software are multitasking, recording footfall data, looking out for suspicious behaviour like concealing things, or monitoring blacklisted individuals. 

Sensormatic’s pedestal-style sensors are well recognised by retailers and consumers alike.

At the same time it can track customer browsing patterns, allowing Sensormatic to produce a heat map in each and every one of their stores, so that they can understand customer behaviour better and adjust merchandising accordingly.

AI cameras and AI software can detect gender and age to an accuracy of around 84 per cent. “We are even able to detect a smile or a frown,” says Ng.

Since governments imposed limits on the number of customers allowed inside stores at once as a Covid management measure, Sensormatic’s solutions have been adapted to control turnstiles at entrances to manage people flows. 

‘May I help you?’ is no longer enough

Ng says with the growth of online shopping, physical stores need to offer a more curated experience in which greeting customers with ‘How may I help you?’, is no longer good enough. By identifying customers arriving at the store, Sensormatic IQ, with the support of AI software in the background, can allow store staff to greet a customer by name, suggest products that might complement previous purchases from the store, or promote added-value service like customised shoes from an in-store 3D printer. 

Creating a more engaging in-store experience helps differentiate offline from an online experience. Individualisation, Ng says, has traditionally been hard to find offline, but that is changing. 

“The integration of online and offline is helping merchants grow – not just through brick-and-mortar retailers going online, but also online merchants like Lazada building physical stores in shopping malls.”

Sensormatic is playing a growing role in helping retailers monitor their inventory. “We call it inventory intelligence – all the way from the warehouse to when it’s transported and delivered into the back of the store to the front of the store. We have a very clear and detailed tracking system that we offer our retailers, depending on the country they are in.” 

Such tracking can help retailers with inventory management, explains Ng, citing a personal experience to illustrate what can go wrong. “I just purchased some shorts online and the store said it had enough inventory and after I paid – 15 minutes later – it came back and said it was out of stock,” Ng recalls. “This got me hopping mad because the retailer just said it had enough inventory and took my money, and then its system came back and said, ‘We’re sold out’. It’s not even a week, it’s the same day! That’s because they don’t have item-level visibility to their inventory.”

Paying for outcomes

A lot of Sensormatic’s contracts nowadays are moving to outcome-based charging. Where retailers have traditionally paid to receive data, they are now seeking actionable insights such as information about the busiest times of the day or whether their staffing levels suit the customer volumes. “These are insights which our retailers pay us for. The thing about outcomes is that if you give them insights and then they can act on them, they feel that is very valuable. 

Today, many retailers are negotiating less than they used to, because it’s no longer all about which is the better or cheaper or most respected device to install, says Ng. 

“They want someone who will partner with them on outcomes. If you help me reduce my shrinkage by 5 per cent, I will pay you this amount. Of course, they have to be willing to share it so the information is transparent before we agree.

“This is rather new, but I believe it is the future of how we will operate in retail. A consumption model will allow smaller players to come in because they may not have that big pot of money to invest in a big system, but by partnering with us, a lot of smaller, innovative retailers can buy services and then hold us accountable for those services and outcomes.”