Compound Multiplier

When Sears Canada decided to move its national headquarters to space above its flagship store in downtown Toronto, loss prevention executives faced the prospect of thousands of shoppers, store and HQ associates, vendors and office workers coming and going every day in a dual-purpose building that suddenly seemed porous and vulnerable.

Relocating to four floors of offices above a bustling downtown store earlier this year took on a kind of before-and-after sense of urgency for divisional vice president and LP executive Don Berezowski. He recalls with some fondness the days when the head office was a self-contained building that housed only the headquarters operation in an isolated, contained situation.

Seemingly overnight, however, he and his staff had to plan for two distinctly different operations within the same overall footprint, both offering enormous potential for significant increases in losses due to shrink.

The building, Eaton Centre, now houses 1,375 headquarters employees, 300 sales associates and thousands of shoppers daily, as well as regular visits from a small army of vendors — all using the same access points and elevators, with greatly increased opportunities for after-hours access to merchandise in the store as well as the buying offices.

Prior to the move, we had projected a 10 percent increase in retail shrink because of the increased traffic and the additional access to merchandise, Berezowski says. But we are trending better now than before in the retail store, and for corporate thefts we are at zero since February — with one exception, a power tool lost during the actual move, that was quickly resolved.

The fact that shrink rates are actually lower than before the move is being attributed to the new 76-camera, DVR-based system that was installed throughout the headquarters offices by Toronto-based Quinn Digital Asset Protection. In fact, Berezowski's initial estimate of getting a payback from the new system within five years has now been revised downward to three years because of its immediate effectiveness at discouraging theft.

Based on his participation in multiple LP panels, Berezowski says Canadian retailers are confronting the same challenges as their U.S. counterparts — including gift card fraud, organized theft rings and merchandise that can go missing from anywhere along the supply chain.

We have vendors coming in on a regular basis … when the store is not open, he says. Sometimes, headquarters employees may have access to the store after hours. We wanted an IP video security system for the headquarters piece that monitors the vendors, the associates and our customers. We wanted to prevent and discourage access to retail locations from corporate offices, and we have the same LP issues in the corporate area, where we have lots of rolling racks of brand name merchandise.

Sears Canada is a multi-channel retailer that operates in every province. Its retail operations include 198 corporate stores, 193 dealer stores, 40 home improvement showrooms and a catalog.

The new surveillance system is actually networked DVR, or NVR. It is easier to install because cameras can be cabled to the nearest network point, rather than to a centralized DVR. The ability to use Power-Over-Ethernet switches to operate the cameras also reduces wiring costs. The cameras themselves are positioned in plain sight to present a strong visual deterrent, Berezowski says.

Rob Quinn, president of Toronto-based Quinn Digital Asset Protection, is a strong proponent of the technology due to its video clarity, ease of installation and flexibility of storage, retrieval and expansion.

Our retail clients are dealing with multi-faceted issues — everything from internal theft, external theft and security issues like panhandlers and demonstrators, he says. They also are very concerned about the safety of their employees and in a DC they will have a lot of temporary staff so they want to keep an eye on those staffers rather than the full-time people.

Like Sears Canada, most of Quinn's retail clients place a strong emphasis on deterrence. They only have so many people to do investigations and go to court, he says. They could make the cameras covert to catch the bad guys, but that is not the intention.

Embedded in software
The NVR system itself comes from Quinn Digital's technology partner, IndigoVision, headquartered in Edinburgh, Scotland. IndigoVision is creating its own analytics that can be added at any time, Quinn says. The analytic piece of the system is embedded in the software and identifies situations that should be brought to the attention of LP staff, like a pallet of goods dropped in front of an exit door.

When it comes to headquarters locations, theft issues include computer equipment and office supplies, and clients want to keep an eye on their valuable assets, Quinn says. But mostly it is done for safety reasons, to make sure their people are safe and secure.

The access control piece of the NVR system is tied into the overall LP system so that they can make a logical decision, like when a door has been forced open without someone using an access card, Quinn says.

Although Sears Canada's goal of installing an IP network in all of its stores will take some time, it is the retailer's long-term strategy to use this technology as a key weapon in its LP programs, Berezowski says.