The Credit CARD Act took effect last week and will have variety of effects on retailers, mostly financial. A less hyped stipulation of this law is that it limits certain fees on gift cards and requires these cards remain valid for at least five years. From a consumer standpoint this is great news. How many times have you found a forgotten gift card only to discover that it expired or that fees have eaten away at most of the balance?

I wonder, though, if Congress realizes the logistical nightmare and potential profitability damage this small clause will have on retailers. For instance, Target comes out with four or five new card designs with different photos or seasonal themes every few months. That’s roughly 20-30 different gift cards a year, meaning that at any given point the Target now must honor 100 different styles of gift cards. With a lot more gift cards in circulation, we may see an increase in scams. Retailers need to review their current gift card sales policies and boost employee training and compliance checks or face a decrease in profitability due to scams, fraudulent cards or simple processing mistakes. This is especially true for retailers with frequent employee turnover, where protocols need to be reinforced frequently. An easy way to accomplish this is with managed video with exception reporting and alerting. Start by reviewing how employees are processing gift cards today. As you watch the video, you’ll start to notice some best practices and common errors. Use the video and apply the insight into your operations to refine your gift card procedures and also to train employees on the right way to process gift cards. You’ll be amazed how reviewing this video with employees can prompt an open dialogue with employees about what is not working in your current gift card policy.

Now let’s get shopping.

I’ve had a number of conversations with other providers in the video space over the last several weeks that have provided further evidence that a lot of people still don’t get software as a service.

I’m always looking to figure out which other providers out there really have a SaaS solution and which of them are just calling their enterprise software or PC-based solutions with web interfaces SaaS.  The typical response I get when I probe on how a provider’s solution is implemented can be paraphrased as “we have a web brower interface, we do updates over the network and we charge monthly for our solution – so clearly we are a SaaS provider”.

I don’t need to go into a complete definition as there are great sources out there such as the wikipedia entry for SaaS.  Let’s just focus on what isn’t SaaS for a minute.  Putting a web server on a DVR (each and every DVR mind you) that users can access over the Internet is not SaaS.  Automatically pushing updates to DVRs or clients running individual copies of software is not SaaS (have you had the joy of being asked to “automatically” download iTunes v.9.0.x every two weeks b/c they pushed some fix or feature you won’t even notice?)  Charging monthly for hardware or software that you would otherwise sell to someone outright is not SaaS.

SaaS is a key element of MVaaS and with it comes a number of inherent capabilities that we believe provide advantages in the delivery of video services across large numbers of users and video endpoints.  Given its been a while since I’ve posted, I should probably follow up with another post to make my argument.

Over the last couple weeks you may have seen press on restaurants and small businesses pushing back against credit card ‘swipe fees’ (which can be as high as 5%) and only accepting cash. It seems that all the talk of a cashless society may have to wait at least a bit. See link. Apparently a growing number of trendy, successful establishments in major metros across the country are saying ‘cash only’. I can certainly understand why retail establishments aren’t excited to drop a handful of points off their top line to the credit card processing giants. And while I won’t use real-estate here to comment on financial reforms I will say this, restaurant and retail operators should dial up their loss prevention efforts and tighten cash handling policies or risk losing their swipe fee savings to internal loss.
While internal loss occurs in all environments, plentiful cash transactions can provide a degree of temptation and fungibility that can add risk. As an example, in a restaurant environment small cash transactions, and high relative ratios of these transactions, can be a red flag.  A cashier may be ringing in only a sub-set of customer ordered items and ‘banking’ the remainder. But certainly a robust loss prevention capability can mitigate any added risk that can come from increased cash transactions. Some keys are strong and effective policies/processes around cash handling, combined video-data exception reporting and alerting, and strong on premises management. Feedback from our customers and loss prevention specialists who are familiar with tools available is that MVaaS solutions are an integral loss prevention component. Managed video extends management’s visibility, provides a tool to identify and investigate areas of concern, and puts management a step ahead. The ability to make video available to anyone, anywhere combined with the ability to integrate to POS data and provide actionable exception reports and alerts serves both to drive bad behaviors out and also serves as a strong deterrent to prevent it from happening in the first place.

Long live cash, just take advantage of the LP tools available to mitigate any added risks.

Thought I’d do a little something different and have a guest blogger – an MBA who is interning with us this summer – post some thoughts on the summit. Here is a post from Dan Deppen
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I had the opportunity to attend the Managed and Hosted Video Summit last week. The summit was a very unique event in that it was not a tradeshow, but a way for the companies in this space to have a dialogue and figure out how to advance the industry as a whole so that everyone benefits. I’m a full time MBA student at the University of Colorado, and have been doing an internship this summer at Envysion in Product and Marketing. Prior to my internship, I had no experience with video surveillance or SaaS. This is an exciting industry to be working in because it is so new, and it is unclear what it is going to look like in the future. This industry is interesting because it has so many unsolved problems, and there are numerous opportunities to make a meaningful impact. Attending the summit was a great experience which gave me a better understanding of state of the industry and the challenges it faces.
The first thing that stood out to me is the sheer size of the video market, currently about $7.3 billion. Managed and hosted video currently makes up a very small slice of this market, although it has been growing rapidly. Many of the technologies involved with managed video are only about 5 years old, and the SaaS/cloud computing approach to software is just now being understood by many customers. The SaaS approach makes it much easier to expand the use of video beyond a handful of security or loss prevention personnel, to anyone in an organization. By viewing video through a web browser, people in security, management, finance, marketing or HR can view video from anywhere. This is a radical shift in the use of video that many potential customers may not realize is possible yet.
One of the themes that came through at the summit is that counter balancing the tremendous opportunity in managed video, there are challenges. Among them is the use of different terminology by different companies. Customers may not understand the differences between Saas, MVaaS, hosted video, or cloud computing. The participants seemed to agree that it would be helpful for everyone would be to come up with some standard terminology.
Another hurdle to gaining wider adoption that was discussed is the need to produce verifiable ROI’s for customers. Everyone is facing economic challenges right now. And any capital outlay is going to face severe scrutiny. This challenge can be compounded by the fact that when video used by more people in an organization, the people who make the decision on whether or not to deploy a system also change. In addition to selling to someone in loss prevention, there may be several other people that need to sign off, particularly in the IT department. This calls for a different sales approach than is used by legacy providers. I know Envysion has developed detailed ROI’s for its customers and it would seem others would benefit from focusing here.
Overall the summit was a great learning experience. I was able to get a much better understanding of the opportunities and challenges facing the managed video industry. This is certainly an area that will provide lots of interesting problems to solve and opportunities for career growth well into the future.

The Managed & Hosted Video community and ecosystem held its inaugural summit this past week in Boulder.  Thank you to those of you who attended and participated in this year’s event.

The feedback was overwhelmingly positive on the content, mix of attendees, and dialogue driven by the sold out event.   The energy and excitement throughout the summit and the social events was evident and invigorating for everyone.   Now it is on all of us to maintain and seize the momentum that was created. 

So what’s next?  Given unanimous support for a recurring Summit, we’ll take feedback and circle back on dates for the next Summit.   And in addition to this blog we will also build some other vehicles for all of us to continue to build the managed and hosted video community.

More to come shortly…

We are excited about both the content and participation we have lined up for the inaugural Managed & Hosted Video Summit planned for July 22nd and 23rd in Boulder, Colorado. I invite and encourage those of you still thinking about the event to pull the trigger. A sample of the participants joining in the Summit include: Axis, Salesforce.com, Cisco, Sony, Brivo, ACTi, Verint, Retel, Siemens, Archerfish, Connexed, Video IQ, Marketforce, Trextel, among many others.

The objective of the summit is to accelerate segment growth and speed adoption of MVaaS and Hosted video solutions. The agenda is geared toward business development and generating a productive dialogue that will inform how to best attack the opportunity. And of course Boulder is a great place to escape the summer heat and humidity hitting most of the country.

Find registration information here or give us a call if you have questions.

A recent article in the Economist observed both how most of QSR has recently weathered the economic storm while at the same time calling on them for additional innovation and change. Mostly the article spoke to menu changes – like the dollar menus we’ve all seen advertised by all the big players and now dominate their innovation. Dollar menus have been effective in retaining customers and perhaps even getting some new customers through ‘trade downs’ from other establishments they would have frequented. But the dark side of the dollar menu is margin risk. They are razor thin and some franchisees are even objecting and trying to fight corporate efforts to go dollar. Thinking about innovation at QSR then reminded me of a conversation we had with a CIO of a QSR concept who was attending NRF-LP. He said that QSR in general typically lagged retail (and many segments) in technology innovation. He gave a laundry list of reasons but a key one was limited IT staff and capability to assess and implement innovative technology solutions.

Call me crazy but it would seem that a great opportunity to innovate and perhaps de-risk some of the margin challenges presented by growing dollar menus is Managed Video. Managed Video as a Service targets operations and profit improvement and provides a rapid payback with no strain on IT and little to no overhead. We’ve delivered with a large (and growing) set of customers and can provide historical proof and pilot demonstration for new customers of 10-15% profit improvement.  Matter of fact just today we ran the numbers for a customer who is adopting our solution and predictably the results came in at 10%+ profit improvement. While I’d argue 10% profit improvement and under six month payback is always a good answer it seems to be even better when combined with the current dollar menu craze.  A one, two punch of innovation to drive revenue and sustain margin.

You had me at hello!

At the risk of falling into a bit of a rant, I thought I would post on the inconsistent ethical standards some companies appear to have when it comes to the practice of gathering information on their competitors.

First, let me start with the clear declaration that I am 100% in favor of companies gathering as much competitive information as possible.  Any good company should have a strong understanding of who is its competition, how they are differentiated, and what should the company be doing to win in the marketplace.  Also, having spent a bunch of time at Bain & Company I am very familiar with the full range of approaches that companies and 3rd parties can use to legally and ethically gather competitive information.

While there are clearly defined legal guidelines, there aren’t as universally accepted ethical guidelines.  We’ve been to a couple of trade shows recently that have provided some great examples that clearly fall on the wrong end of whatever line you draw.

Example #1: If you want to see my marketing material, just ask.  We publish a lot of our material on the web and we are also willing to share it with anyone that stops by our booth to say hello.  Just don’t sneak by when the booth is not even open and pick through our stuff to “borrow” some of it.  If you aren’t willing to ask for it, you probably don’t think you should have it.

Example #2: Don’t pretend to be someone else.  I’ve had folks stop by and introduce themselves as working for one company when I find out later that they are directly working for another, competitive company.  I often stop by other folks booths during shows to see what they are up to and how they are representing themselves.  I wear my badge (with my name and company on it), I introduce myself, and I have a conversation.

Example #3: I’ll show you mine if you show me yours.  Anyone that has talked with me will know that I tend to be very open and share a lot about our business and what is going on in the market (this blog is just one of the channels we use for that open communication)  I enjoy talking with other players in the market and will share a lot of high level information with folks – my only request is that the information sharing is reciprocated.  Don’t pepper us with a bunch of very detailed questions and then say “I’m not allowed to tell you anything” when we ask you the same questions in return.

No real point in this post as “people are who they are” and will behave accordingly, just thought I would offer some suggestions to anyone out there with a competing solution that wants to better understand what we are doing.

The National Retail Federation – Loss Prevention Conference was this past week in steamy Atlanta. I’m sure many of you are familiar with the show, it lasers in on how to reduce shrink, stop theft, control inventory etc.

One of the more interesting themes in my discussions (though I’m sure there was some selection bias in my sample) was the need for solution providers to be able to play and engage other functional areas of the retail enterprise customer to drive differentiated results. In discussion and demos that I saw, typically solution providers were pairing up Loss prevention with Security (theft deterrence and investigations as examples) or pairing Loss Prevention with Marketing (e.g. mystery shoppers and video based analytics companies). But overall it was a recurring theme and was even mentioned in my discussion with the trade press. 

While cross-functional value seems intuitive and isn’t a complete shocker of an observation, it was a Loss Prevention specific show so I thought it was interesting. It also resonated with me given that a key piece of the MVaaS value proposition is to provide easily accessible video insight to the masses (across functions). Loss prevention is definitely a key value area and application for MVaaS and we pair with marketing, security, human resources like many of the solutions I saw and discussed.  However, the two differences for MVaaS from what I heard was that no one was talking about reaching out to all of those areas and no one was talking about pairing Loss Prevention with operations. Analogous to Human Resources, if you can get every store operator and retail field employee thinking about loss prevention you are going to be more successful than if it’s a small team focused on LP (10’s of people vs. potentially 1000’s). Empower the masses with something that is easy to use and you can become part of the culture/DNA and drive exponential results.

And for the record, my 6+ years in Colorado have officially killed my ability to deal with Atlanta heat.  Amen to 11% humidity and 82 sunny degrees!

As adoption grows for SaaS (and MVaaS) we are starting to see ripple effects, adjustments, and observations, that impact how business is conducted and what we view as best practice. Great recent article in Sand Hill highlight a top five tips for delivering value to customers.

I think all 5 are spot on but I wanted to expand a bit on #3 – Know How You Will Measure Success. For readers of this blog, and those of you familiar with Envysion, you know that we are laser focused on delivering bottom line profit improvement for our customers. Because of that focus we are actively involved both in defining metrics but also the measuring.

For this to resonate and be valuable for customers its critical that the metrics and the measurement be in terms familiar and selected by the customers. Specifically, what are their KPI’s? What matters to them? How do they calculate it? Once value and success metrics are defined with the customer the next question is how do you measure it. Here again it is critical to align with the customer on the data, method, periods etc. At Envysion we typically conduct a pilot with our customers at the beginning of which we align on success metrics and at the end we run the numbers together with the customers finance team. While we are happy to do the math and run the numbers on behalf of our customers we make sure that they completely buy in up front and the results at the end.

The net here is that not only do you need to measure success for customers – in our view you should also align with your customer on what those metrics are and how you calculate them.