LOSS PREVENTION AND RETURN ON INVESTMENT Point of Sale Software and Video Integration

THE PROBLEM: RETAIL SHRINK

RETAIL SHRINK 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% “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. Source: 2011 National Retail Security Survey

RETAIL SHRINK 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 Shrink is a global problem, and internal and external theft are the primary sources of loss. Source: 2011 National Retail Security Survey

THE SOLUTION: SHRINK PREVENTION

SHRINK 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) Improvements in labor and security equipment are powerful tools for combating retail shrink and improving loss prevention. Source: 2011 Global Retail Theft Barometer

RETURN ON INVESTMENT 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 The number one objection to point-of-sale integration with video surveillance systems is COST.

PROVIDING SOLUTIONS Theft deterrence Evidence for restitution if an incident occurs Potential insurance savings 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. EXTERNAL THEFT AND SHOPLIFTING SOLUTION: VIDEO SURVEILLANCE

PROVIDING SOLUTIONS 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 alarms to notify managers and loss prevention officers of pre-determined criteria POINT OF SALE SOFTWARE INTERNAL AND EMPLOYEE THEFT SOLUTION:

FURTHER RETURN ON INVESTMENT 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 The Loss Prevention department is not the only business group that benefits from using SaleGuard. CROSS-DEPARTMENTAL VALUE

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

SALEGUARD OPTIONS

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

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

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

SALEGUARD BENEFITS

OPENEYE / SALEGUARD INTEGRATION 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 SaleGuard includes the same commitment to value, ease-of-use, and Heroic Customer Service OpenEye is known for.

SALEGUARD IS PROACTIVE 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 SaleGuard allows retailers to be proactive in their loss prevention, rather than reactive.

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