AI-enabled video in retail: understanding missed sales opportunities

Retail leaders face a mix of opportunities and challenges over the coming years, with economic headwinds putting pressure on leaders to optimise processes and costs. Meanwhile, customers expect greater personalisation, unique in-store experiences, and compelling offers to attract them through the door. Strong controls on demand, cost, and margin, along with embracing technology to improve efficiency and data-driven decision-making, will help retailers get ahead.

AI is core to increasing competitiveness

AI services in retail alone are predicted to increase from USD 5 billion in 2023 to above USD 31 billion by 2028. As part of this, AI-enabled video technology is emerging as a core tool in the modern-day retail leader’s toolbox for increasing competitiveness and efficiency. As recent Hanwha Vision research reveals, there is a growing appetite among retailers for expanding video beyond security to wider operations. The combination of AI and video technology is key to this.

Rising interest in AI-enabled video

Of the sectors researched by Hanwha Vision, retailers show some of the highest interest in technology, with more than one in two (52%) citing its potential to better understand missed sales opportunities. As one of the first users of what was then CCTV, it’s perhaps no surprise that the retail sector is open to adopting the latest functions of AI-enabled video. There are many new and innovative uses for AI-enabled video in retail that build on its traditional use in loss prevention – from optimising store layouts and queue management to increasing sales and supporting stockroom logistics.

Understanding customers better

While still an area for investment, traditional security applications such as detecting anti-social or threatening behaviour (29%), identifying break-in attempts (20%), and alerting managers to shoplifting attempts (12%), appear to be a lower priority for retail leaders using AI-enabled video. They are more interested in using the technology to understand customer behaviour better.

Many retailers are expanding the role of video to support customer behavioural analysis and sales and inform store layouts. The research found that the top five applications of AI-enhanced video technology in the retail sector are:

  1. Confirming the demographics of those who leave without a purchase.
  2. Revealing how shoppers browse store sections.
  3. Providing guidance on the optimum position to display goods in store.
  4. Notifying managers when queues form so they can reassign staff or open new tills.
  5. Showing how shoppers navigate a store and revealing bottlenecks.

AI-enabled video can help in-store managers better understand the context around missed sales opportunities. Using video, they can also learn about movement patterns around a store to inform aisle layout and product displays. Bottlenecks can be removed to improve the shopping experience, and queues can be managed with real-time alerts from video cameras to advise store staff to open more checkout counters at busy periods.

Bringing AI-enabled video in-store

To bring AI-enabled video to retail stores in an effective and responsible way, a balance is required between regulating the use of technology to ensure it is trustworthy and protects individuals and encouraging innovations that give rise to more applications where AI can deliver real benefits.

Responsible manufacturers like Hanwha Vision are used to striking these balances. To be clear, Hanwha Vision doesn’t offer a live facial recognition solution and closely monitors developments in all relevant legislations.

The EU Artificial Intelligence Act, which is in the final stages of being passed into law, is the first-ever legal framework on AI, and aims to provide AI developers, deployers and users with clear requirements and obligations regarding specific uses of AI. Central to this will be the identification of different levels of risk associated with a particular application of AI. Meanwhile, Hanwha Vision has already announced its preparedness for the EU’s NIS2 and CRA cybersecurity directives, which are due to come into force this year.

Indeed, as a Korean manufacturer that is NDAA-compliant with complete control over its supply chain and a strong background in cybersecurity and ethical practices, Hanwha Vision is a strong advocate for the responsible use of video surveillance technology.

To discover more about retail’s use of AI in video, read the full research report here.