Convenience Store Video Analytics

Part
01
of two
Part
01

Video Analytics Case Studies

Three examples of companies within the convenience store space in China that use video analytics in their video cameras include Jian24, Tao Cafe, and JD.

1. Jian24

  • Use of Analytics: Jian24 uses video analytics to register its customers’ facial data by scanning them at the entrance. In addition, in-store cameras make a note of the items picked up by customers and the payment is processed with another smartphone scan at the exit.
  • Benefit: The use of video analytics enabled Jian24 to open its first staffless shop in Shanghai, China.
  • Downsides/Issues: Jian24’s store in Shanghai closed in 2018 for repair works due to technical kinks.

2. Tao Cafe

  • Use of Analytics: Tao Cafe, a shop owned by Alibaba, uses cameras with video analytics for tracking customers using facial recognition. In addition, all products in the cafe are digitized and monitored including their placement on the shelf and purchase by customers using the cameras.
  • Benefit: The use of video analytics enabled Tao Cafe to minimize the number of staffs including cashiers and thereby reducing the resulting queues.
  • Downsides/Issues: The technology is limited only to Chinese citizens and the cost of building such store is huge compared to traditional convenience stores.

3. JD

  • Use of Analytics: In JD’s unmanned convenience store, video analytics using the cameras placed throughout the store recognizes customers’ movement and generates heat maps of their activities. In addition, its advanced computer vision technology tracks a range of shopping behaviors.
  • Benefit: With the use of video analytics, JD is able to monitor product selection, traffic flow and customer preferences which helps in optimizing inventory, product displays and all other facets of store management.
  • Downsides/Issues: JD’s unmanned convenience stores still require humans for cleaning and stocking products. In addition, many customers still require human touch provided by regular convenience stores during payments.

YOUR RESEARCH TEAM APPLIED THE FOLLOWING STRATEGY:

We started our research by looking for information on video analytics to gain insights on how it is used for motion detection and facial recognition. In addition, we also checked the definition of convenience stores to ensure appropriate examples were provided.
Subsequently, we started searching for examples of convenience stores in China making use of video analytics for applications such as motion detection and facial recognition on various media sources including but not limited to Asia Nikkie, DIPOL Weekly Review, Walk the Chat, JD Corporate Blog, and DigiDay.
From these sources, we were able to identify three examples of convenience store companies making use of video analytics in China namely, Jian24, Tao Cafe, and JD. In addition, we were able to provide the requested information on 'how they use analytics, how it benefits them, and any downsides to its use' from sources Walk the Chat and Digiday.
Part
02
of two
Part
02

Video Analytics Trends

Three important trends of using video analytics in convenience stores include the use of AI cameras, the use of video analytics for proactive and strategic planning, and the use of IP cameras.

AI Cameras

  • Retailers, as well as governments, are turning to AI cameras to combat criminal activity and to observe people's habits for other purposes. It's a development that has privacy advocates wondering if the anti-crime efforts outweigh the civil liberty risks.
  • This is a fairly common trend that affects both convenience stores and big box retailers such as Target, Walmart and Lowes.

Video Analytics

  • Retail businesses use video analytics for proactive, strategic planning to enhance the shopping experience, yielding higher sales and greater customer loyalty.
  • Thus, convenience stores can make proactive, data-driven decisions to increase operational efficiencies, that gives them the ability to recognize and prevent potential issues before they arise.

IP Cameras

Recently, most modern store security camera systems have begun utilizing IP cameras rather than analog CCTV systems. IP security cameras provide high-resolution footage that makes it easy to distinguish features of thieves, whereas older analog CCTV systems lead to the following risk factors:
  • Tampering: Many potential thieves will attempt to tamper with a surveillance system in order to obscure their identity during a theft.
  • Outages: Disruptions or surges in power can cause outages in a store security camera system, which could result in gaps in recording or even damage to security cameras. Store owners should ensure they have backup security measures in place.
  • Privacy: Keep cameras in public areas like sales floors and stockrooms in order to maintain the privacy of customers and employees.

Sources
Sources

From Part 01
Quotes
  • "A convenience store is a retail outlet that sells a limited range of prepared and ready-to-eat foods, bottled and fountain beverages, household staples, tobacco products and periodicals. "
  • "Convenience stores are typically small in size, are open extended hours, and, in most cases, are staffed by a relatively small team of cashiers, stock workers, and managers."
Quotes
  • "Jian24 opened its first staffless shop in Shanghai last October. Customers must first register their facial data and a payment method such as Alipay on the company's smartphone app. "
  • "When they visit, their faces and smartphones are scanned at the entrance. In-store cameras note which items they pick up, and payment is handled with another smartphone scan at the exit."
  • "But these stores have yet to work out all the kinks. A Jian24 location in Shanghai closed recently, with a sign on the door saying repairs were underway. "
  • "The phone number on the sign connected to a company representative, who acknowledged that no timetable existed for reopening the store."
  • "JD.com, China's second-largest e-commerce company, looks to open 500 unmanned stores this year, but it has struggled to implement the concept on a larger scale. Only about 20 locations are operating so far."
Quotes
  • "Alibaba, Chinese e-commerce giant, is testing a new automated sales system. Tao Cafe, the shop created for this purpose, is operated by a minimum number of staff, there are no cashiers and the resulting queues."
  • "At the entrance of the shop, customers register by scanning QR codes on Taobao app in their smartphones. Since then, they are tracked with cameras for facial recognition."
  • "Similarly, all goods in the cafe are digitized and monitored, along with their placement on the shelf and purchase by customers. "
  • "As the customers walk out of the cafe, their bills are automatically paid via e-payment accounts on their smartphones. The method of recognizing goods and customers is based on machine learning. "
  • "The system proved to be very effective: within 5 days of testing an erroneous identification rate was on the level of 0.1% in the case of goods and 0.02% in the case of customers. "
Quotes
  • "Users have to scan a QR code before entering the Tao Cafe, and users will need to wait in the payment tunnel before exiting the shop"
  • "It is limited to Chinese citizens"
  • "The cost of building a store and providing the technology to operate the store is still huge compared with the human cost it saved, thus not mature yet for putting into commercial use"
  • "It’s not clear how accurate the calculation of the cart value is yet"
Quotes
  • "Since launching its first unmanned convenience store in its Beijing headquarters in October 2017, JD’s unmanned store technology has become increasingly sophisticated, expanding the range of goods that can be purchased. "
  • "The unmanned stores leverage cutting-edge technologies, such as RFID, facial recognition, and image recognition, to track retail activity. "
  • "Cameras placed throughout the space recognize customers’ movement and generate heat maps of the activity to monitor traffic flow, product selection and customer preferences to help optimize inventory, product displays and all facets of store management. "
  • "JD’s recently upgraded unmanned store in its headquarters is now using advanced computer vision technology to track a range of shopping behaviors."
  • "JD now operates over 20 unmanned stores across China."
Quotes
  • "But the stores still require humans to clean them and stock products. Plus, an education problem exists, as staffless stores are a new concept for many shoppers."
  • "Most people don’t have a habit of shopping at cashierless stores, as many may still want the human touch provided by regular convenience stores,” said Chen. “And I think selling fresh produce will be a big hurdle for unmanned stores"