Loss prevention and return on investment

1. Loss prevention and return on investment Point of Sale Software and Video Integration

2. The problem:retail shrink

3. Retail shrink “Shrink” is a reduction in inventory due to shoplifting, employee theft, paperwork errors, and supplier fraud. Shrink affects your bottom line, and makes you less profitable. • US shrink grew 6% in 2011 • Overall average of 1.59% of sales • $41.6 billion total • A growing problem, prompting business response • Global spending on Loss Prevention grew 5.6% Source: 2011 National Retail Security Survey

4. Retail shrink Shrink is a global problem, and internal and external theft are the primary sources of loss. • Internal and External theft accounts for nearly 80% of retail shrink • 43% of all loss is due to external theft • 35% increase in shoplifting • 35% of all loss is due to internal theft • 24% increase in employee theft Source: 2011 National Retail Security Survey

5. The Solution:shrink prevention

6. SHRINK PREVENTION Improvements in labor and security equipment are powerful tools for combating retail shrink and improving loss prevention. • #1 Solution: Labor • Over 50% of Loss Prevention expenditure in 2011 • #2 Solution: Security equipment • 31% of Loss Prevention expenditure in 2011 • Equipment expenditures in the US are declining • An effective Shrink Prevention Solution must provide effective and efficient Return on Investment (ROI) Source: 2011 Global Retail Theft Barometer

8. RETURN ON INVESTMENT The number one objection to point-of-sale integration with video surveillance systems is COST. • Sample ROI calculation • 10M annual sales with 2% shrink equals $200K lost • 80% of this is shoplifting/employee theft, totaling $160K • An integrated system can reduce employee theft by 90% • This saves $144K in the first year • ROI dramatically affects the total cost of ownership over the life of the product

9. Providing solutions External Theft and shoplifting solution: OpenEye surveillance products have a strong record of reliability, ease-of-use, and innovation in the areas of business security, theft deterrence, and restitution. With a variety of cameras and recorders available, along with RADIUS remote management software, OpenEye’s products are as effective as they are versatile. Video Surveillance • Theft deterrence • Evidence for restitution if an incident occurs • Potential insurance savings

10. PROVIDING SOLUTIONS Internal And Employeetheft solution: Point of sale software • Dramatically reduce average investigation time • Conduct investigations with improved efficiency • Proactive identification of employee theft • Customized Key Performance Indicators (KPIs) highlight irregularities • Improved evidentiary video with transaction overlay • Increases information provided by video surveillance • Add real-time awareness to suspect exceptions • Use email alarms to notify managers and loss prevention officers of pre-determined criteria

11. Further Return on INvestment Cross-Departmental Value The Loss Prevention department is not the only business group that benefits from using SaleGuard. • Human Resources / Management • Objective employee review metrics • Trace specific activities • Track employee performance trends • Reward positive employee behavior • Correct detrimental employee behavior • Terminate problem employees • Marketing / Merchandising • Use video analytics alongside data analytics • Build conversion rate reports • Show dwell times for specific items

12. Case Study: festival foods Festival Foods is a regional grocery store in Wisconsin, with roughly 30 large locations. Calculated that 60% of shrink was internal after focusing on shoplifting and external theft Used a formula consisting of 2 parts training/procedures and 1 part technology Deterred theft by demonstrating to employees that the Loss Prevention department was paying attention via specific examples Installed video surveillance with POS integration Utilized example videos during cashier training Reduced employee theft by 90% after 1 year of implementation

13. Saleguard options

14. Saleguard basic • Provides live text overlay • No database functionality • Video can be played back with overlay • Accomplished through third-party text inserter • No advance search tool

15. Saleguard Intermediate • Provides live text overlay • Database logging • Multi-criteria transaction search with video • Export video with or without transaction information • Alert notifications • Remote transaction search capability • Basic reports available

16. Saleguard advanced • Provides live text overlay • Database logging • Multi-criteria transaction search with video • Export video with or without transaction information • Alert notifications • Remote transaction search capability • Basic reports available • Customizable intelligent algorithm • Proactively identify key trends • Produce detailed LP reports

17. SALEGUARD BENEFITS

18. Openeye / saleguard integration SaleGuard includes the same commitment to value, ease-of-use, and Heroic Customer Service OpenEye is known for. • SaleGuard Pro combined with E-Series recorders is a great value • No long term residual contract pricing • Free software updates throughout the life of the product • Potential for third party video integration for large projects • Decentralized transaction and video search

19. Saleguard is proactive SaleGuard allows retailers to be proactive in their loss prevention, rather than reactive. • Automated reports direct Loss Prevention officers to possible problems • Risk Analysis feature provides the fastest method to conduct investigations quickly • Provide an automated base-line risk ranking on a location-by-location basis