Walmart is using AI cameras to fight theft (WMT)

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Walmart is using cameras and computer vision technology as part of a program — referred to internally as "Missed Scan Detection" — designed to reduce shrink, the term used by retailers to define losses due to theft, scanning errors, and fraud, among other cases, Business Insider reports.

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The cameras watch and analyze the checkout area, including self-checkout stations, and notify store associates if they detect a potential issue, such as an item moving past a checkout scanner without actually getting scanned. Several companies are supplying Walmart with tech for the program, among them Ireland-based Everseen.

Here’s what it means: Missed Scan Detection could pad Walmart’s margins and even help its self-checkout initiatives.

Catching the errors that cause retail shrinkage may save Walmart a significant amount of money. If Walmart’s shrink rates match the industry average, the company’s US business would have lost over $4 billion last year to theft and related losses, per Business Insider.

This is an astounding amount of money to lose to errors like theft and scanning mistakes, but if Missed Scan Detection can fight these problems, Walmart’s profit margins could enjoy a surge since they’d be less constrained by shrinkage.

The technology could also help Walmart revamp its previously shuttered Scan & Go program. The service — which enabled shoppers to scan their items with a smartphone app and skip the checkout line by paying through the app and showing a digital receipt to an employee before exiting — was shuttered in May 2018, and theft, both intentional and accidental, was cited as an issue.

But the retailer seems to be testing a similar program in Canada, and if it can use Missed Scan Detection tech to make theft less of a problem, it may be able to release an updated version of the program.

The bigger picture: Walmart’s been investing in sensor technology for various uses recently to make its stores and associates more efficient.

In addition to Missed Scan Detection, the retailer has opened a store augmented with AI and even has a patent on sensors to monitor audio data.

Walmart’s "Intelligent Retail Lab" uses thousands of cameras on the ceiling and other technology, like sensors on shelves, alongside AI to detect issues like spills and out-of-stocks. It also has a patent on a system of audio sensors that detect sounds, like beeps and conversations, in the checkout area that could ensure employees are performing their jobs effectively, though it hasn’t built this tech yet.

These combined initiatives point to Walmart pushing toward building a smarter store and getting the most out its expansive physical footprint.

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