How to stand out of the crowd of video analytics?

Video analytics is gradually becoming one important aspect of retail analytics, pivoting from conventional security usage to business performance enhancement. It is not a holy new concept and a bunch of companies has been dancing around for a certain period. But the adoption of retail video analytics has not gained enough traction in China so far.  On top of that, we heard e-commerce is crushing offline business, and the news waves of brick&mortar closures are sweeping the media. Somehow these did not deter one local company Ovopark to carve out a niche in the market with its smart positioning strategy.

For large retail chain in China, store management can be a pain in the ass. Suppose you have 2000 chain stores across the country, you would need to send out at least 100 supervisors to check all of them on a very frequent time base for different kinds of issues such as store compliance, merchandising, shelf display, product promotion, inventory, out of stock, staff service etc. The whole process is often time-consuming, high cost and above all labor intensive, requiring your battalion of supervisors traveling a long distance, conducting a tedious on-site inspection, taking photos, writing summary reports etc.

Ovopark was founded in 2012 and offers a hardware camera and Saas model to improve in-store management efficiency.  It first eyed on the pharmacy industry as the go to market strategy. Because this sector has remained more or less intact upon facing the e-commerce tsunami due to the restriction on drug online sale imposed by the regulators (only recently the regulator decided to relax the iron grip). It stroke an instant success and attracted China’s leading pharmacy chain company LBX as one of its biggest clients. LBX has over 2400 pharmacy shops nationwide and now it is said 80% of them are implementing Ovopark’s solution.

Many might be concerned with the hight cost of new camera installation. Ovopark is, in fact, a spinoff startup from KEDACOM, a video camera and surveillance technology company in Suzhou. Thus Ovopark can sell the hardware of 360-degree view, high definition camera at a reasonable price. For a typical store with 100m2 it would require the setup 1 or 2 cameras and the minimum upfront cost is usually around RMB3000 (USD435). 

As for the software side, Ovopark charges a monthly fee RMB100 only for the Saas subscription. The platform collects the data from the camera and can integrate with store’s CRM, ERP, POS system in order to generate aggregated data analytics within one dashboard. In that way, the big retail chain is able to monitor the operation of hundreds of store in a mobile app in real time.

Though Ovopark also offers sensor hardware for traffic counting, tracking and heatmap, it has not been a priority for many of its clients. Or simply put that way, their clients are not interested in paying money for customer insights but more keen on reducing the costs of store management. See Ovopark dashboard example for LBX pharmacy below:

(English translation for above dashboard:

1)There are total 380 checklist items for store supervision. 37 items were checked and 34 out of 37 items met the requirements

2)Top 5 mismanagement issues for all the chain stores

3)The detailed description of each checklist item, i.e. the requirements of keeping pantry area clean, and 75.6% of the stores are qualified

4)The checklist item for a specific store

-Is the store manager on duty?

-Is the store manager acting as a role model for the customer service?

5)The specific store has a problem: the store manager was not on duty with a photo clip from the camera as evidence)

Ovopark said LBX pharmacy only adopts the sensor for newly opened stores, to see whether it can attract new customers. The sensor is usually installed at the entrance, at the unit price of RMB1500 for each.

Currently about 50% of the Ovopark clients are from pharmacy chain, but it also landed prominent clients from other sectors, such as one of the largest snack food brands in China Laiyifen (now 1000 out of total 3000 stores are using Ovopark solution). Ovopark currently serves about 200 clients, covering more than10,000 chain stores in China.

Of course Ovopark is not the only local player in this arena. There is another breed of startups, such as PPZnet which in stead of relying on camera, resorts to crowd-sourcing to take photos and fulfill the task of store inspection, then develops AI-powered image recognition platform for real-time dynamic analysis. 

The good news is local big retail chains are getting more and more open-minded and proactive to try any new solution to combat their declining business. This really helped to spawn quite a few local startups to develop solid technology in the country.

Author: Cecilia Wu