How Facial Recognition Will Change Smart Retail
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How Facial Recognition Will Change Smart Retail


"Smart retail" refers to the use of technology in retail environments to enhance the overall shopping experience by improving customer experience, streamlining operations, and optimizing sales opportunities. In particular, the adoption of facial recognition systems has increased over the past year, gaining attention as an all-in-one solution providing enhanced store security, personalized shopping experiences for VIP/loyalty program participants, contactless payment options, and valuable customer analytics. This article reviews smart retail use cases and solutions that will help boost your retail sales to the next level.

What is Smart Retail?

Smart retail is when a business uses various smart technologies to deliver an enhanced shopping experience to customers. The technologies used to deliver smart retail are typically a mix of hardware like camera equipped AIoT devices, kiosks, or tablets - in tandem with AI software - to create a hybridized shopping environment. The aim is to digitally transform a traditional brick-and-mortar store into the best of both worlds, providing the immediacy and intimacy of hands-on shopping, with the convenience and customized appeal of online alternatives.

What Do Retail Stores Use Facial Recognition Technologies For?

Online shopping has become very slick in recent years; with easy to compare products and customized offers– all while the online business is given permission by enrolled customers to store their profile and hence analyze their behavior. Facial recognition can now help bring most of the appeal of online and app-based shopping to traditional retail, while still maintaining some unique physical advantages.

Like online shopping, customers can benefit from personalized offers and a streamlined checkout process when facial recognition is incorporated. On the administration side of retail, facial recognition can also be of great benefit to businesses. Consider retail staff completing daily operating processes like clocking-in/out, using POS terminals, and accessing other business assets, using only their face to verify identity.

Lastly, we’ll also highlight the popular application of facial recognition systems in security and surveillance – helping to keep your retail outlet and its inventory secure.

1. Retail Analytics

a women with mask uses facial recognition technology to pay at the counter

While online retailers can easily collect data on consumer behavior, brick and mortar retailers often have more difficulty generating data-driven insights.

Facial recognition solutions like FaceMe® can give traditional stores a broader view of customer demographics and behaviors: who is buying what and when, and even insights into a customer’s mood during the purchasing process. Cost savings and competitive advantages can be achieved using the customer data, while also providing superior customer service, keeping shoppers happy, engaged, and loyal.

How to Use Facial Recognition for Retail Analytics

  • Identify Peak Traffic Hours and Demographics
  • The 50/20 rule states that stores generally see about 50% of a week's total traffic and sales in just 20 hours. Facial recognition's constant monitoring allows you to discover when these peak segments occur so that you can schedule appropriate employee coverage and display new inventory: critical steps in driving top-line performance.

    Knowing customer demographics, such as age and gender, during peak times is also lucrative. Insights gathered from facial recognition technology, such as FaceMe® can help you accurately plan sales, offers, and displays to reach target audiences during these key times.

  • Understand Customer Mood and Behavior
  • It can be difficult to discern how consumers feel about a retail experience, or about the products they are buying or avoiding. Facial recognition can help with this by assessing and charting emotions: happy, sad, angry, surprised, indifferent, etc.

    This analysis can help to evaluate, and if needed, make adjustments to areas such as pricing, displays, and customer service. With facial recognition you can also learn behavioral trends, such as whether customers in pairs purchase more impulsively or if larger groups buy smaller items as gifts for each other, unlocking a new dimension of in-store analytics.

  • Smart Digital Signage and Kiosk Applications
  • Displaying relevant, interactive, and personalized ads based on data-driven consumer analytics can greatly increase sales. It is impossible to create an ad that accurately targets all audiences, but with digital signage you can rotate ads based on individual shopper demographics, such as age range and gender.

    Similarly, digital kiosks use facial recognition to provide customers with personalized recommendations, as well as provide self-service checkout functions with contactless payment options.

FaceMe® SDK is an optimal solution for integrating facial recognition in IoT devices like digital signage and kiosks. Optimized for various AI inference engines, and supported on several platforms, analyzing your demographics, and bringing precision to your marketing efforts is now simple and easy.

Find out how to integrate FaceMe® SDK, a cross-platform AI facial recognition engine, into edge-based AIoT/IoT devices for all your business scenarios.

2. VIP and Loyalty Programs

digital signage shows a man his personalized shopping suggestions using facial recognition technology

VIP and loyalty customers are your greatest asset as they spread awareness about your brand and act as ambassadors for your products. Over half of U.S. marketers saw increased engagement when implementing personalization strategies. As such, treating VIPs like royalty, including tailoring every aspect of their experience whenever possible, is a valuable strategy.

How can facial recognition enhance store visits?

Facial recognition enables personalized VIP and loyalty program experiences for opted-in customers. Staff can receive alerts when particular customers enter the store, with a prompt to greet the customer by name. When paired with CRM (Customer Relationship Management) solutions, staff members can pull up customers' preferences and purchase histories to make specialized recommendations and offer tailored promotions. During checkout, staff can automatically apply rewards and promotions without the need for a physical loyalty card.

How can facial recognition enhance post-visit experiences?

By opting in, VIPs give permission for their facial biometrics to be scanned and stored by a retailer, which is good for business analytics, and in return they receive various loyalty benefits. The ability to make VIPs feel welcome, regardless of store location, generates positive associations with the brand itself. Moreover, by being alerted that a VIP is in one of your locations, a more personalized post-visit experience can be provided.

Some examples of VIP post-visit benefits include recommendations for companion stores in the area, the delivery of special deals to their smart devices, or even offers of a specialized thank you from the specific store branch. With FaceMe®, you can make your best customers feel like royalty, generating deeper brand loyalty.

Contact us to get an evaluation version and price quote today!

3. Security and Loss Prevention

Retail theft has long been a significant issue for store owners with the National Retail Federation reporting retail theft losses swelling to $112.1 billion in 2022, up 19% from $93.9 billion the year before.

Facial recognition technology addresses the issue by improving security and preventing loss.

Identifying Block-listed Individuals

By cross-checking everyone who enters the store against a database of identified shoplifters and unruly customers, facial recognition can detect and deter repeat offenders. When cameras equipped with facial recognition identify offenders, the system immediately alerts personnel with the person's identity, location within the store, and reasons for block-listing to ensure that the individual is approached appropriately and safely.

Establishing this block-list of known offenders also helps reduce mistakes and eliminate bias. Furthermore, this tactic frees up loss prevention personnel, allowing them to focus on keeping shoppers and employees safe.

retailers using facial recognition to identify block-listed people and receive alerts immediately

Securing Restricted Areas

Many retail stores and shopping malls contain restricted areas only for authorized employees. Security cameras and smart door locks equipped with facial recognition can control access, only unlocking for authorized personnel.

This type of deployment also performs an essential safety measure by monitoring how much time an authorized person spends in a potentially dangerous area (like freezer storage), and sending rescue if they exceed a preset amount of time.

Facial recognition software, like FaceMe® Security, can be integrated into retail stores’ existing security and surveillance systems to detect people of interest based on pre-enrolled facial templates. CyberLink’s solution integrates into a multitude of popular CCTV video management systems (VMS) from major players like Milestone, Axis, Vivotek, Hanwha, Network Optix and Genetec, to ease the monitoring burden on security staff.

This means that there will be little or no new hardware investment required and a company may find it possible to reduce staffing costs while improving both security and efficiency.

AI-enhanced facial recognition systems reach far beyond securing restricted areas with functions to recognize VIPs, allow authorized employees to enter restricted areas, or notify personnel when a known shoplifter visits a store.

Additionally, FaceMe® Security can be extended with add-ons for employee check-in, and to provide a functional video monitoring and recording (VMR) interface for those not adding the solution to an existing VMS.

Create smarter surveillance and access control systems with facial recognition technology today!

4. Employee Time and Attendance Management

The outdated time and attendance system of punching tickets, or tracking via computer logs, is often an afterthought for employees and creates unnecessary administrative work. Using facial recognition, retailers can know precisely when an employee arrives, takes breaks, and leaves for the day, resulting in more accurate timecards and efficient payroll. It also increases convenience for employees by avoiding issues such as lost or forgotten timecards.

5. Payment Systems

Point-of-sale (POS) systems that use facial recognition technology can verify customer identity and quickly and easily authorize payments. Like other biometric verification methods, customers don't need to take out a credit card or smartphone to pay.

Facial recognition also helps prevent fraudulent transactions. Even if your card or smartphone is stolen, the latest anti-spoofing technology prevents criminals from tricking the facial recognition system. This technology ensures that the face in front of the camera is not only a real person, but also matches with the database, thwarting spoofing attempts.

Cash registers and POS terminals can even integrate facial recognition for authorized employees, to ensure only they have access during scheduled periods. Instead of keys or codes, this can also be used when a cashier needs authorization for certain transactions.

Innovative Facial Recognition Use Cases for Retailers

Retailers have come up with some compelling applications for facial recognition in their stores. Just as you log into an app or online store before shopping online, some unmanned brick-and-mortar stores will allow you to enter the store using facial recognition. Then after browsing and selecting products, you can go through a secure self-service checkout, authenticating with only your face, instead of relying on cash, a card, or mobile device.

Personalized ads are also no longer an online-only experience. Now similar ads are appearing at store kiosks, or in the shopping aisles. Ads can be based on a person’s age, gender or other detectable demographics if they are unregistered.

retailers using facial recognition to identify block-listed people and receive alerts immediately

What Smart Retail Solutions Are Available?

Several facial recognition retail solutions are available to enhance your retail business.

1. Nosher (by Ordyx): Contactless Payments and POS Integration

Nosher provides an innovative approach, integrating with FaceMe® facial recognition technology to offer contactless payments. With the Nosher/FaceMe® integration, guests can pay simply by using their face. The payment experience is touchless and does not require a phone, card, or cash. Customers scan a QR code to complete a one-time registration and then use only their face to make payments at any Nosher-powered establishment. Instead of replacing existing merchant POS systems, the solution easily integrates into them, such as Ordyx POS and Clover, with many other point-of-sale integrations to come. The Nosher solution will be available soon.

Developing Hardware with Facial Recognition Technology

Retailers with existing hardware and development teams should choose a facial recognition SDK to easily integrate facial recognition. FaceMe® SDK is a ready-to-use SDK designed for implementation in IoT devices across a spectrum of use cases. Depending on your needs and scope, you can customize the solution with your choice of chipsets and cameras. See our top recommendations.

Find out how to integrate FaceMe® SDK, a cross-platform AI facial recognition engine, into edge-based AIoT/IoT devices for all business scenarios.

2. FaceMe® Security

FaceMe® Security is a turnkey software solution for smart surveillance and access control in retail environments. It can run on a wide range of hardware, starting from a modest IP camera equipped device like a laptop or NUC, and scaling up to workstations, and GPU accelerated servers.

When paired with a mainstream VMS, or with the VMR Add-on supporting up to nine cameras, FaceMe® Security maintains site safety by providing real-time monitoring and alerts when VIPs, people of interest, and/or certain employees arrive.

As evidence of its flexibility, FaceMe® Security can be further augmented with Check-in for your time and attendance needs.

3. FaceView (by Advantech): Visitor Identification and Notification System

Advantech's FaceView industrial app is a FaceMe® enabled facial recognition system for AIoT applications. While most retail stores have adopted IoT devices to reduce labor and improve services, devices are often not integrated with internal systems.

By installing FaceView on their devices, the high-precision FaceMe® facial recognition engine can perform real-time identification and analyze customer attributes, such as gender, age, and emotion, ultimately resulting in a better understanding of customer needs.

What's the Future of Facial Recognition in Retail Stores?

With FaceMe® facial recognition technology, retailers can create faster and more frictionless transactions, boost customer satisfaction by collecting rich analytics, offer targeted advertising, better manage employee attendance and store security, and provide personalization to VIPs and loyalty program members. Investments in such smart retail technology will ensure retailers continue to provide customers with the best possible in-store experience, boosting brand loyalty and increasing sales.

For a complete overview of facial recognition and how to deploy it, read What is Facial Recognition – The 2024 Ultimate Guide for Facial Recognition Technolgoy. For more information on specific facial recognition use cases, read our Top 7 Use Cases for Facial Recognition.


There are two main focuses of facial recognition for business. One of the most popular uses is in providing employees secure access to a business premises via facial recognition. This can easily be extended with timeclock functionality.

The second main use of facial recognition is on the customer side of a business. Here Fintech and consumer facing businesses will encourage customers to enroll their face data as part of electronic know-your-customer (eKYC) and smart retail business enhancement measures.

Retailers can make use of facial recognition to improve the customer experience in a number of ways. Firstly, facial recognition can be a new way of implementing a VIP system for shoppers. A camera can recognize registered customers when they enter a store and send them offers, alert staff of a VIP, and ensure the visitor receives loyalty benefits – much like a store loyalty card but with less friction.

Secondly, facial recognition can be used by retailers to check and monitor store stock popularity and layout performance. AI is smart enough to notice customers who are happy or unhappy, popular areas of the store, and any customer flow issues.

Lastly, facial recognition can be used by customers to check out with their purchases. In one example, CyberLink worked with Japan’s CAC Corporation in order to integrate facial recognition into the firm’s on-premises convenience store. The result was a store offering secure and cash-less, ID-card-less convenience, open for business whenever an employee required a drink or snack.

Big name retailers like Ace Hardware, Apple, H-E-B Grocery, Lowe’s and Macy’s are all thought to use the technology, but of these only Ace Hardware and Macy’s admit to using facial recognition in stores. Macy’s uses facial recognition for enhanced store security. It says that its cameras are used in stores where there is a high incidence of organized retail theft, and it is also used to alert security if repeat offenders enter any of its stores.

FaceMe®: CyberLink’s Complete Facial Recognition Solution

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