Technology Priorities Document (TPD)

Table of Contents

1. INTRODUCTION AND BACKGROUND

2. INVENTORY SHRINKAGE

3. DEFINITIONS

4. PREFERRED FUNCTIONALITIES FOR THEFT DETERRENT TECHNOLOGY

5. CATEGORY PROTECTION STRATEGY

6. OPTIMIZE CURRENT TECHNOLOGY & PROCESS

7. ITEM LEVEL SHRINK VISIBILITY

8. EMERGING BUSINESS TRENDS


1. INTRODUCTION AND BACKGROUND

The Retail Industry Leaders Association (RILA) is the trade association of the world’s largest and most innovative retail companies. Retail executives choose RILA’s unique collaborative forums, effective public policy advocacy, and premier educational events to advance excellence throughout the retail industry. RILA members include more than 200 retailers, product manufacturers, and solution and service suppliers, which together account for more than $1.5 trillion in annual sales, provide millions of jobs and more than 100,000 stores, manufacturing facilities, and distribution centers domestically and abroad.

RILA’s Horizons Committee is comprised of executives across retail segments having responsibility for identifying loss prevention technology solutions that address emerging and future business risks.  

1.1 Purpose

The Retail Loss Prevention Technology Priorities Document (TPD) was created by RILA with input from the Horizons Committee for the purpose of stimulating innovation across industries to improve retail loss prevention technologies. Other key objectives of the TPD include: (1)   describe preferred functionalities for certain theft deterrent technology identified by a majority of retailers represented on the Horizons Committee; (2) encourage non-traditional solution providers to help facilitate the advancement of theft deterrent technology; (3) encourage collaboration across industries to develop innovative solutions; and (4) facilitate the exchange of information between retailers and solution providers regarding technology-based solutions.  

RILA and the Horizons Committee believe strongly in competition. As such, the TPD and  supporting documents are made available through multiple channels to maximize participation from solution providers across industries. This TPD and the information-exchange process associated with it (described more fully in the FAQ) are not intended to pick marketplace winners and losers or to require or pressure any solution provider to adopt any particular actions or policies.  No adverse consequences will result from a solution provider’s non-participation in the TPD process.

1.2 Benefits to Innovation

Researching, developing and providing innovative and customer-friendly theft-deterrent solutions offer potential benefits to the solution provider, the retailer and ultimately customers. Theft creates inefficiencies across the supply chain including the need for additional, replacement inventory, which increases freight in the supply chain and, therefore, environmental sustainability. Additional manpower is required to handle, stock and price the increased inventory. Mechanical theft-deterrent devices slow the customer checkout process.  Innovative theft-deterrent solutions can have many potential benefits, including the following:

  • Additional visibility to sources of shrink and lost profit
  • Reduced employee intervention and merchandise access time, which can improve speed of checkout
  • Higher in-stocks, sales and profit
  • Potential reduction in labor and other costs
  • New business opportunities for solution providers to engage with retailers

2.   INVENTORY SHRINKAGE

2.1   Types of Inventory Shrinkage

According to the University of Florida’s 2010 National Retail Security Survey, inventory shrinkage falls into the following categories:

  • Employee Theft (45%)
    • Under-ringing
    • Sweethearting
    • Concealing and leaving the store
  • Shoplifting (31%)
    • Organized Retail Crime
    • Opportunistic theft
  • Administrative (14%)
    • Paperwork errors
    • Inventory pricing mistakes (e.g. markup and markdown errors)
  • Vendor Fraud (4%)
    • Theft of merchandise
    • Failure to deliver amount of product purchased
  • Unknown (6%)

2.2   Existing Solutions

  • EAS
  • CCTV
  • Spider Wrap®
  • Keeper Cases
  • Locking/Restrictive Peg Hooks and Showcases
  • Liquor Caps
  • Ink Tags
  • Anti-Theft Labels
  • Motion Sensors
  • Fixtures (anti-sweep, pusher, beeper, tethering)
  • Clamshell Packaging
  • Pull Tags
  • Pay from Scan/Scan based trading
  • Egress Control
  • Return Mitigation

3.   DEFINITIONS

  • Analytics
    Software application(s) that assist analysts in traversing large amounts of data from various internal and external sources to develop meaningful business conclusions.
  • Benefit Denial
    A system or technology designed into, or applied to, retail products that prevents anyone from gaining value or use of a product without first making a legitimate purchase.
  • Beta
    Non-fully functional model; start-up; not production ready; product beta not
    available in less than 19 months.
  • Business Intelligence
    Computer-based application designed to identify, manipulate, and analyze by providing historical, current, and predictive views of business data.
  • Case Management System
    Software application for managing both internal and external incidents.
  • Civil Recovery and Restitution
    Legal means by which a business attempts to reclaim losses and costs from a wrongdoer.
  • Deactivation
    The act of taking an EAS label from an active state and bringing it to an inactive state where it will not alarm an EAS system.
  • Electronic Article Surveillance (EAS)
    A technique that protects merchandise by utilizing security tags and labels and EAS detection equipment; alarm activates when items protected with an active tag or label pass through the detection equipment.
  • Electronic Product Code (EPC)
    A globally-unique identifier for the object being tagged.  It is specific to groups of goods, such as shipping containers or can be specific to each individual asset type.
  • EPCglobal
    An organization set up to achieve worldwide adoption and standardization of EPC technology.
  • EPC Information Services Standard (EPCIS)
    An EPCglobal standard for sharing EPC related information between trading partners; enables disparate applications to leverage EPC data via EPC-related data sharing, both within and across enterprises
  • Free On Board (FOB)
    The point at which the intended receiver takes ownership of the merchandise.
  • Failure to Deactivate (FTD)
    When an EAS label is not properly deactivated at the point of purchase, causing a false alarm when passed through an EAS system.
  • GS1
    Global data and application standards for bar codes that use the globally recognized GS1 Identification Keys to automatically identify things such as trade items, locations, logistic units and assets.
  • Global Trade Identifier Number (GTIN)
    Describes a family of GS1 (EAN.UCC) global data structures that employ 14 digits and can be encoded into various types of data carriers. Currently, GTIN is used exclusively within bar codes, but it could also be used in other data carriers such as radio frequency identification (RFID).
  • Graphic User Interface (GUI)
    A type of user interface that allows users to interact with electronic devices with images rather than text commands.
  • Kill
    Rendering a singulated tag permanently nonresponsive.
  • Mass Production
    Can produce prototype/mass production in less than 30 days.
  • Mobile Coupon
    Store employee scans coupon barcode image from customer’s smart phone.
  • Mobile Point of Sale (Mobile POS)
    Store employee scans items at a virtual register (e.g. on the sales floor) using a mobile device (e.g. iPod Touch, FIRST Phone) and accepts tender.
  • Mobile Self-Checkout
    Customer scans items using his/her own device (e.g. customer’s smart phone) and pays with tender.
  • Passive Tag
    A tag or label whose transceiver is powered by the RF field.
  • Payment Card Industry Data Security Standard (PCI DSS)
    An information security standard for organizations that handle cardholder information for the major debit, credit, prepaid, e-purse, ATM, and POS cards.
  • Pentaplex
    Allows for viewing, recording, playback, back-up and network access at the same time without stopping the recording or slowing down its recording speed.
  • Personally Identifiable Information (PII)
    Information that can be used to uniquely identify, contact, or locate a single person or can be used with other sources to uniquely identify a single individual.
  • PII Compliant
    Adherence to state and federal laws governing protection of PII.
  • Point of Sale (POS)
    A location within a store or facility where an object is sold and may be marked or otherwise indicated as being allowed to legitimately leave the store or facility. 
  • Point of Sale Activation (POSA)
    An item has to be purchased in order for product to work (e.g. when a television is purchased, a code is printed on receipt; the code has to be entered once in order for television to work)
  • POSA Customer Interface
    Customer is required to perform an action to make the product functional. 
  • POSA Non-Customer Interface
    Customer is NOT required to perform an action to make the product functional. 
  • Prototype
    Fully-funtional, pre-production model; can produce Beta in less than 18 months.
  • Radio Frequency Identification (RFID)
    the use of a wireless non-contact system that uses radio-frequency electromagnetic fields to transfer data from a tag attached to an object, for the purposes of automatic identification and tracking.
  • Real-Time
    A range of time from milliseconds to a few seconds after the business event has occurred.
  • Self-Checkout
    Customer scans item at store self-checkout register and pays with tender.
  • Shrink
    Merchandise unaccounted for at the time of inventory.
  • Single Sign-On
    Reduces the number of identities and logins required for user access and automates logins for heterogeneous systems across the enterprise.
  • Singulation
    Identifying a tag in a multiple tag environment.
  • Singulation Rate
    The rate at which a reader simulates multiple tags in a specified interrogation region measured in tags/second.
  • Sweeping Theft
    Stealing large quantities of the same product at one time.
  • Tag Reuse
    Returning a tag to a retail establishment and/or placing the tag back into the supply chain after the item to which the tag was attached has passed through POS or been otherwise removed from the retail store or supply chain.
  • Touchless Payment
    Store employee scans items; customer waves smart phone by reader usually part of, or by, pin pad.
  • Under-ringing/Sweathearting
    A cashier ringing a product at a price that is less than actual price.            
  • Universal Product Code (UPC)
    A unique 12-digit number assigned to retail merchandise that identifies both the product and the vendor that sells the product.
  • Uniform Resource Identifier (URI)
    An RFID reader may read and output a HEX value of 30700048440663802E185523. This value must be converted to binary, then decoded programmatically according to the EPC specification to extract the decimal field values and formatted to return a meaningful representation of the EPC called the Uniform Resource Identifier (URI) representation.

4. PREFERRED FUNCTIONALITIES FOR THEFT-DETERRENT TECHNOLOGY

The technology functionalities described in the pages that follow reflect the preferences and priorities of retailers represented on the Horizons Committee and are intended to be aspirational in nature only. These technology functionalities are not intended to set minimum standards or impose mandatory business requirements on solution providers. They are only intended to provide solution providers with information about the retail community’s theft deterrent technology priorities. 

4.1 Generally Applicable Functionalities

Preferred theft deterrent technology solutions can:

  • be adaptable to both US domestic and international retail chains
  • provide  means for providing systematic actionable intelligence
  • adhere to  legal and regulatory requirements
  • function in brick and mortar, mobile and dotcom  channels
  • be open standards based
  • have a small footprint and require minimal infrastructure (e.g. servers, storage)
  • have tools for effectively managing tens of thousands of devices and be  simple to upgrade
  • enable retailers to buy what they need and upgrade when they want
  • be compatible with and able to co-exist seamlessly with older solutions (where appropriate)

4.2  Solution-Specific Functionalities

Solution-specific functionalities are described in the following separate sections for each theft-deterrent technology identified in the TPD.

5. CATEGORY PROTECTION STRATEGY

Following are priority functionalities for Category Protection Strategies.

5.1   Benefit Denial

  • Customer Interface
    • Does not function without sales validation.
    • Requires one validation at first use only.
    • Provides a unique validation code to customer at POS.
    • Provides a means to enter validation code to activate (e.g. remote control, touch screen, etc.).
    • Has no adverse impact on transaction speed.
    • Does not interfere with other store systems.
    • Is adaptable to mobile telephone technology, including tendering on the device (e.g. product registration, etc.).
    • Does not require more space than existing hardware specs at POS.
    • Does not require additional procedure at POS.
    • Does not require any physical attachment to the product.
    •  Communicates to multiple retail system environments.
    • Customer does not need an internet connection to make product functional.
    • Has multiple options for activation channels.
  • Non-Customer Interface
    • Does not function without sales validation.
    • Requires one validation at POS.
    • Provides a means to activate without customer interface.
    • Has no adverse impact on transaction speed.
    • Does not interfere with other store systems.
    • Is adaptable to mobile technology, including tender (e.g. product registration, etc.)
    • Does not require more space than existing hardware specs at POS.
    • Does not require additional physical procedure at POS.
    • Does not require any physical attachment to the product.
    • Communicates to multiple retail system environments.           

6.   OPTIMIZE CURRENT TECHNOLOGY & PROCESS

Following are preferred functionalities to optimize current technologies and processes.

6.1 Case Management System

  • Event Reporting
    • Creates/edits investigation records.
    • Records user access/changes.
    • Tracks progress of case/incident investigations.
    • Has minimal impact on processing speed on dependent host applications.
    • Is scalable to accommodate any number of simultaneous users.
    • Uploads information, written records, video, reports, pictures, etc.
    • Marks cases confidential so only certain people would have access.
    • Accommodates varying levels of access, to allow or disallow specific job codes from accessing data.
    • Sets-up process flow mapping for investigations. 
    • Has single Sign On capabilities.
    • Sends real-time email/PDA notifications.
    • Provides access through web.
    • Is fully integratable with user’s case management system.
    • Tracks elements of cases network wide.  (e.g. Name, SSN, MO, etc.).
    • Integrates with host retailer systems (e.g. merchandise item reconciliation, HR systems).
    • Has configurable data entry parameters (e.g. case dollar amounts, item price errors, etc.).
    • Provides ability for templates for report building/case narration.
    • Creates cases offline and syncs once back online.
    • Transitions incidents to cases/investigations without additional data.
    • Provides host retailer audit functionality.
  • Incident Reporting
    • Provides a conversion program to convert all existing cases to the new case management system.
    • Hosting facility, if remotely located from retailer,    has 99.99% uptime.
    • Vendor monitors, unless remotely located from retailer, on a 24/7 basis, servers and equipment dedicated to company for  proper operation, capacity and performance.
    • Hosting facility provides requisite amount of cybercrime insurance as identified by the individual retailer.
    •  Is PII compliant. 
    •  Has single Sign-On capabilities.
    •  Is PCI DSS compliant.
  • Relationship and Analysis Trends
    • Identifies trends and patterns.
    • Has fuzzy logic capabilities to link cases with similar characteristics, benefitting organized retail crime investigations.
    • Plots map points.
    • Has minimal impact on processing speed on dependent host applications.
    • Is scalable to accommodate any number of simultaneous users.
    • Has integration functionality with other systems (e.g. EBR System, LDAP Associate Information, LERPnet, HRIS, Store file, etc.).
    • Has single Sign-On capabilities.
    • Provides import/export functionality to other programs (e.g. Excel, Access, etc.)
  • Civil Recovery and Restitution
    • Tracks collection information (e.g. amounts demanded, owed, received, etc.)
    • Manages collection letters when payments are missed.
    • Has minimal impact on processing speed on dependent host applications.
    • Is scalable to accommodate any number of simultaneous users.
    • Has functionality to include 3rd party applications use as stated above.
    • Is able to refer data to a third party vendor through a secured method.
    • Has real-time online interface with applicable state and local statutes governing collections.
    • Has single Sign-On capabilities.
  • Dashboard
    • Has alert functionality.
    • Provides customizable reporting.
    • Provides fiscal and period reporting.
    • Is e able to create and circulate announcements.
    • Has a comprehensive audit suite.
    • Has a search engine with “Google®” like search capabilities.
    • Has minimal impact on processing speed on dependent host applications.
    • Is scalable to accommodate any number of simultaneous users.
    • Has single Sign-On capabilities.

6.2   Returns

  • Merchandise Returns
    • Can electronically/systematically validate purchase to record of sale.
    • Provides a functionality disabler so the product can go back on the shelf. 
    • Has no adverse impact on transaction speed.
    • Does not interfere with other store systems.
    • Does not require more space than existing hardware specs at POS.
    • Does not require any physical attachment to the product.
    • Communicates to multiple retail system environments.
    • Has reporting capability.
    • Has real-time decision analytics capability.
    • Has real-time customer identification validation.
    • Has real-time validation to respective return policies.
    • Has functionality to include 3rd party applications use as stated above.
  • Merchandise Returns Acceptance
    • Interfaces with POS or allows a stand-alone device.
    • Compares customer’s identification to customer’s purchase and return history in real-time.
    • Provides a decision to accept/decline a customer’s return.
    • Provides override functionality.
    • Allows multiple forms of identification to link customers/create history.
    • Is customizable at user level.
    • Has no adverse impact on transaction speed.
    • Does not interfere with other store systems.
    • Has user configurable reporting capability.
    • Stores/processes any and all data for a period defined by the retailer.

6.3   Closed Circuit Television (CCTV)

  • Assessment
    • Is scalable to accommodate required number of users, cameras, and recording periods.
    • Provides for configurable recording duration by camera.
    • Maintains a log of all system related events to include user and/or functions.
    • Is capable of maintaining archived installation maps and configuration templates.
    • Provides for pre-programmed download of configuration templates for site to site consistency.
    • Contains “on-board” text and video training for system operation and maintenance.
    • Adheres to the requirements listed in NFPA documents 730 (Guide for Premises Security), 731 (Standard for the Installation of Electronic Premises Security Systems) and 70 (National Electrical Code).
  • System Guidelines
    • Provides the ability to define operator and administrator responsibilities separately.
    • Provides the ability to record case responses and actions.
    • Includes control, distribution, and upgrade of software applications.
    • Controls the chain of custody of image records for evidentiary support.
    • Recording devices provide for easy removal, replacement, and copy of all video data, on demand, for evidentiary support.
    • Removal, replacement, or copy of video data does not  impede other system operations.
    • Has universal user level access control.
    • User interface (dashboard) is customizable at user level.
    • Access control has programmable authority levels customizable by system administrator.
    • Has comprehensive case management and reporting tools.
    • Has full remote video functionality mirroring local operation.
    • Sends real-time email/PDA notifications.
    • Provides access through web.
    • Fully integrates with user’s case management system.
  • Technical Specifications
    • Supports archiving to Read-Only media.
    • Supports the inclusion of Metadata information stored with the image.
    • Video is protected using a one-way seal generation process using the Secure Hash Algorithm (SHA) which is part of a Digital Signature Standard.
    • Resides on a standards-based open platform.
    • Provides pentaplex (multi-functional) operations.
    • Provides saving and printing of still images.
    • Provides remote, live and playback video.
    • Provides intelligent search capabilities based on video motion and other analytic parameters.
    • Is capable of syncing multiple camera views.
    • Network infrastructure is secured both physically and logically based on adopted industry networking standards.
    • Is configurable by camera, schedule, and event with user definable adjustments for video quality including; frame rate; resolution; compression.
    • Camera selection is based on the necessary pixels per foot.
    • Has scalable storage capability to record required video duration for selected resolution from CIF to multi-megapixel.
    • Provides for interior-fixed, interior-PTZ, exterior-fixed, and exterior-PTZ camera applications.
    • Lens selections provide for fixed or zoom capabilities to comply with scene requirements.
    • Mounting of all system components can be completed using secure industry standard mounting hardware.
    • All components are listed by Underwriters Laboratories or other jurisdictionally required agencies.
    • All wiring is in compliance with National Electrical Code, Building Industry Consulting Services, International standards and other jurisdictional requirements.
    • Supports data from multiple outside systems to be associated to individual cameras. 

6.4   Business Intelligence (BI)

  • Graphic User Interface (GUI)
    • Is customizable at user level.
    • Has user level access control.
    • Operates on commonly used operating systems.
    • Is scalable to accommodate any number of simultaneous users.
    • Provides the ability to manipulate and present data in numerous graphical ways.
    • Does not require high level of technical expertise to operate.
  • System Functionality
    • Has drill down functionality to merchandise item level.
    • Is able to set up scheduled reporting.
    • Has minimal impact on processing speed on dependent host applications.
    • Is able to export data to other commonly used software applications.
    • Has data in real-time.
    • Is hosted on the retailer’s network.

6.5 Analytics 

  • Reporting  & Graphic User Interface
    • Is able to set up scheduled reporting.
    • Has minimal impact on processing speed on dependent host applications.
    • GUI has customizable dashboards at user level.
    • Dashboard has ability to drill down by organizational hierarchy.
    • Has the ability to overlay trend lines and moving averages over any historical metrics.
    • GUI has user level access control.
    • GUI has mobile device functionality and operate on commonly used operating systems.
    •  Is able to export data to other commonly used software applications.
    • Has data as close to real-time as possible.
    • Is hosted on the retailer’s network.
    • Has drill down functionality to merchandise item level.
    • Provides advanced statistical, reporting and data.
    • Captures data from databases, spreadsheets, and flat files.
    • Has the ability to query existing databases, spreadsheets, and flat files.
    • Is scalable (supports clusters and/or web farms) on the front-end and back-end to support high volume burst traffic.
    • Is web-based.
    • Supports Geographic Information System (GIS) functionality to show either thematic and choropleth maps.
  • Data
    • Communicates with 3rd party software applications.
    • Performs trend and predictive analyses.
    • Can process/store any and all data for a period defined by the retailer.
    • Has minimal impact on processing speed on dependent host applications.
    • Has data in real-time.
    • Is hosted on the retailer’s network.
    • Decimal numbers are stored with 5 decimal places of precision.
    • Has the ability to overlay trend lines and moving averages over any historical metrics.
    • Has predictive capability with a statistically significant approximation of τ+1. (τ+1 = next year, τ+2, etc.)
    • Finds correlations among multiple variables independent of human intervention.
    • Recognizes outliers in a statistical distribution that were not predicted to be outliers.
    • Has the ability to import a mathematical model, run historical data through the model, and output the results.

7. ITEM LEVEL SHRINK VISIBILITY

Following are preferred functionalities for item level shrink visibility technologies. 

7.1 Under-ringing/Sweethearting

  • Reconciles merchandise physically present to merchandise tendered.
  • Has no adverse impact on transaction speed.
  • Does not interfere with other store systems.
  • Does not require appreciably more hardware or storage space than existing specs.
  • Does not require any physical attachment or other modification to merchandise.
  • Communicates to multiple retail system environments.
  • Has reporting capability.
  • Provides data storage for internal research (rolling 6 month).
  • Communicates simultaneously/real-time with current transaction.
  • Integrates with existing POS systems and provides real-time identification of product presence.
  • Field of search is limited to current transaction cart only (to prevent over reading).
  • While in the search area, product is processed by POS.(multiple cart transactions).
  • Provides real-time alerts for multiple voids and/or price reductions.

7.2   Bottom of the Basket

  • Product is accurately recognized at a minimum rate of 98%.
  • Identifies the presence of an item 100% of the time.
  • Has no adverse impact on transaction speed.
  • Does not interfere with other store systems.
  • Does not require appreciably more hardware or storage space than existing specs.
  • Does not require any physical attachment or other modification to merchandise.
  • Communicates to multiple retail system environments.
  • Provides reporting capability.
  • Communicates simultaneously/real-time with current transaction.
  • Integrates with existing POS systems and provides real-time identification of product presence.
  • While in the search area, product is processed by POS (multiple cart transactions).

7.3   Smart Merchandise Displays

  • Accurately recognizes movement of product at a minimum rate of 98%.
  • Identifies the presence of product 98% of the time.
  • Displays product available on shelves with pressure to keep items forward facing.
  • Tracks the amount of product on shelves and synchronize inventory reporting to a central system for periodic or sporadic real-time requests.
  • Tracks and reports the rate of selection from shelves and record date, time, and item selected in a central system.
  • Reports or alerts when a velocity of selection has exceeded a retailer specified time or unit limit.
  • Provides for retailer configurable alarms and reporting when no product or low quantity of product is present on shelves.
  • Tracks when product is returned to a shelf and  reports date, time and item information to central system.
  • Integrates and synchronizes with other systems using open standards or following industry accepted standards for IP communication.
  • Is user serviceable and installable.
  • Central system allows for programming and modification of product information and location.
  • Coexists with multiple installations of smart displays without interference and tracks each unit separately.

8. Emerging Business Trends

The retail shopping experience is evolving at a rapid pace. Emerging areas in retail require the immediate attention from solution providers if the industry is to stay ahead of the loss prevention challenges that can result from these new ways of doing business. Listed below are some of these emerging business trends: 

  • Emerging POS technologies including self-checkout, mobile coupons, “touchless” payment,  mobile POS and mobile self-checkout.
  • E-commerce
  • Radio-frequency Identification (RFID)
  • Radio-frequency