How AI Is Helping Theft-Plagued Retailers

Retailers are under assault…

They’re grappling with inflation… raising wages… and labor shortages.

But perhaps the most difficult challenge of all is rampant theft.

Police records show a 45% leap in shoplifting complaints in New York City last year over 2021.

And compared with the mid-2000s, complaints are up 275%.

Retailers across the country lost $112.1 billion from theft last year. That was a nearly 20% jump from 2021.

I know firsthand what these stores are facing. Nearly 20 years ago, I opened a small clothing store. And even then, theft was an issue.

I once chased down a thief after he snatched several items. And my store was robbed several times overnight.

Today, things have gotten so bad that Target, Dollar General, and Foot Locker have had to cut their profit forecasts for the year.

And where crime is at its worst, it’s forcing stores to shorten opening times… or even close down.

This year, Target closed three of its San Francisco Bay Area stores. This was largely due to theft.

I was in downtown San Francisco last week for a meeting with a tech startup. I noticed a lot of empty buildings. It was depressing.

And instead of finding solutions, lawmakers often make these problems worse. Since I was running my clothing store, state legislatures in California and New York have reduced penalties for shoplifting.

But technology is the great equalizer. When society and legislation fall short, technology often rises to the occasion.

And today, we’ll look at how one startup is using artificial intelligence (AI) to help retailers solve the rampant theft issues they face. 

AI to the Rescue

If you are a regular reader, you’re aware of my enthusiasm for AI technology.

You may even think I write about it too much.

But as a technology investor, I’m happy with that.

AI isn’t just a tech trend. It’s the tech trend.

Just like the invention of the computer has led to multiple other trends – think internet, smartphones, gaming, gene sequencing, and even precision-guided missile defense systems – AI will spawn a new set of trends.

It’s already being used widely to pilot self-driving cars… speed up drug discovery… increase crop yields… improve our chances of achieving nuclear fusion… and replace internet searches with human-like conversations.

It’s also coming to the rescue of theft-plagued retailers.

Take French startup Veesion. It’s created an AI-driven theft deterrent system.

It analyzes live footage from a store’s security cameras. And the folks at Veesion have fine-tuned it to spot body movements linked to shoplifting. This allows it to flag suspicious activities in real-time.

Turns out shoplifters have similar motions pulling a product off the shelf and putting it in a pocket or backpack.

Veesion’s AI detects theft in real-time

(Source: Veesion)

This AI monitors the store’s security video feed around the clock.

When it detects a suspicious motion, it sends an alert to staff about potential theft in real-time.

Veesion says security personnel catch less than 5% of shoplifting incidents.

And as early results from Veesion attest to, AI can dramatically boost that detection rate.

50% Drop in Theft

Take one 7-Eleven store in the U.S.

After enabling Veesion’s AI system, it saw a 50% drop in theft.

And the system had a nearly 100% accuracy rate.

Another test, in an airport duty-free shop, also led to promising results. In one month, the AI spotted 11 shoplifting incidents.

Six of these were within days of each other. And the same two culprits were involved. Their choice of products, timing, and tactics were similar each time.

Due to the high value of the merchandise they stole, police were able to secure an arrest warrant. This led to an arrest and the recovery of goods valued at more than $18,000.

The duty-free chain is now rolling out Veesion’s tech to 40 of its locations across Europe.

Job Killer or Creator?

Now, I know what you may be thinking…

“Colin, won’t this be a job killer? What about all the security guards who’ll lose their jobs as a result?”

That’s not what this system does. It will have the opposite impact.

Instead of businesses catching just 5% of theft that occurs using just security guards, Veesion’s AI system will increase these results dramatically. This will turn a security guard into a profit center for businesses.

In that case, businesses are more likely to have a security guard on duty because the system enables them to stop more theft than ever before.

We live in a society searching for answers. And AI is delivering solutions.

Without solutions, I worry more stores will be forced to close in our neighborhoods. That means fewer jobs and opportunities in our communities.

It’s a challenging time for American retailers. But it’s also an exciting era of innovation and transformation.

We’re on the cusp of a new frontier in retail security. And it will be led not by lawmakers, but by advances in AI.

Regards,

Colin Tedards
Editor, The Bleeding Edge