The Hawk Report | Evolution Robotics Retail

June, 2009



		Future Trends – Innovation in retail technology

		Retail Benchmarking – How big is BOB?

		Under the Hood – How one LaneHawk BOB customer is using the "Risk Report"

		Product Updates – Expanded POS and Self-Checkout integration; LaneHawk InCart

Future Trends Innovation in retail technology Innovation happens in two ways: the harder way and the easier way. The harder way involves insight, inspiration, and the luck of the universe. We have penicillin because Sir Alexander Fleming figured out that dirty, dangerous mold could, if grown in a certain way, be a wonder drug. Our understanding of physics was changed forever when an especially contemplative Sir Isaac Newton became the victim of a falling apple. These "harder way" innovations are important, but also unpredictable and infrequent. Like any other industry, retail needs innovation. We need to find ways to improve the customer experience, to decrease our costs, and improve our position as brands. Unfortunately, flying fruit and mold are probably not going to help us. Can we innovate in an easier way? Yes, to start, we can look to other industries and regions, use what they have already innovated, and bring it to our retail environment. 3G cellular phone technology, for example, could be a game-changer for US retail in the next 5 years. In East Asia and parts of Europe, much more can be done on your phone than here in the US. There, many people watch TV regularly, pay for items at vending machines, use GPS, work remotely, or do everyday commerce on their phones. The phone, for many in these countries, has become so pervasive as to replace the PC. How might the modern cell phone impact US retail? The opportunities are numerous. Perhaps the phone will be used as a scanner, perhaps phones become mobile kiosks, or maybe the phone's functionality grows until it can act as a retail payment system. Your guess is as good as any, but fortunately, we will not need fruit, mold, or a crystal ball to innovate. The 3G cell phone is coming and it will have an impact. How will you use it? (article excerpted and modified from original) Click here to read the full version Retail Benchmarking How big is BOB? Bottom of Basket (BOB) loss seems to be a polarizing issue. We have spoken with retailers who believe that the problem doesn't exist in their chain, and we have spoken with retailers who believe that the problem is astronomical. Evidence would suggest that there are as many opinions on BOB loss as there are retailers. In a fit of intellectual curiosity, we once pondered the same question. Just how big is BOB? The answer is, well, it depends. What does it depend on? A lot of things really: store traffic, lane configuration, front-end policies, cart design, and so much more. In fact, we even have a theory about how parking lot size plays in to the equation. What we can say with confidence, after analyzing millions of transactions at dozens of retailers, is that BOB loss in grocery floats right around .1% of front-end sales (usually around $8.50 per lane, per day). When we work with a large grocer, that adds up fast. So, just how big is BOB? Pretty big as it turns out. How big is your BOB loss? Under the Hood How one LaneHawk BOB customer is using the "Risk Report" A large regional grocer has been using LaneHawk BOB reports across their chain to detect cashiers in need of additional training and those that are participating in fraud. Their favorite report is the LaneHawk BOB "Risk Report". It reports the store, lane, day, time, transaction, operator and most importantly, the image, of all items identified by LaneHawk that did not appear in the transaction log (items recognized but not transacted). This report is used by Loss Prevention personnel as an investigative tool to look at instances where a cashier inappropriately circumvented a LaneHawk BOB alert (a tell-tale sign of needed training or fraud). In the last 12 months alone, this grocer has identified a number of alarmingly dishonest cashiers. Three cashiers were found to have losses well over $10,000. One of these cashiers, in addition to ignoring BOB items, also scan-passed items for a total loss of over $25,000. In each of these cases, Loss Prevention was tipped off to the behavior by their "Risk Report". See a full Risk Report Product Updates Expanded POS and Self-Checkout integration; LaneHawk InCart It is an exciting time for new products and platforms at Evolution Robotics Retail. One of the significant developments has been the expansion of our POS integration options. Building on our strong foundation of deployments with the IBM ACE and NCR ACS, LaneHawk BOB is now also supported on IBM SA, NCR ACS-IR, and Retalix StoreLine (with the Retalix ISS45 adapter ready in July). In addition to expanding our support across a variety of manned POS systems, we are also introducing LaneHawk BOB coverage to Self-Checkout (SCO). Substantial pilot analysis indicates that SCO lanes and manned lanes have very similar levels of BOB loss (with fewer methods to solve it). Our first offering in this vein is our LaneHawk BOB integration with NCR SelfServ Checkout. In January 2009, at NRF in New York, we launched a new product: LaneHawk InCart. Built on our patented ViPR® technology, LaneHawk InCart is a system that monitors the top of a shopping cart in much the same way that LaneHawk BOB monitors the bottom of a shopping cart. LaneHawk InCart looks down from the ceiling and constantly reconciles the items in the current transaction with the items it recognizes in the cart. Like its BOB-centric sibling, InCart is integrated with the POS, allowing the retailer to prevent the loss before it actually occurs (instead of just reporting on it later). Visit the LaneHawk InCart Product page If this message was forwarded to you and you would like to sign up for The Hawk Report, click here. 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	Events June 15 - 17, 2009 NRF Loss Prevention Conference LA Convention Center Los Angeles, CA Come see us in Booth #105 June 15, 2009 Join us at our NRF party Lucky Strike @ L.A. Live Los Angeles, CA



	In the News April 6, 2009 Integrated Solutions for Retailers Innovation: Copying is the Sincerest Form of Flattery March 5, 2009 The Economist Machines That Can See February 24, 2009 RILA Report LaneHawk "Best POS Prevention Tool Available Today"



	Team Member Profile Dr. Jim Ostrowski (or Dr. O as we call him) is EvoRetail's VP of Product Development. Jim is from the University of Pennsylvania, where he was a tenured Professor in the Department of Mechanical Engineering and a member of the General Robotics, Sensing, Automation and Perception (GRASP) Laboratory. Jim's field of expertise includes mobile robotics, nonlinear dynamics, and vision-based control. He holds a Ph.D. in Mechanical Engineering from the California Institute of Technology and still dreams of being an astronaut when he grows up.



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