As part of our own strategic targeting efforts we recently dug in to better understand how and where QSR’s are looking to drive revenue growth.  The objective is simple, better understand one of our target customer segments better so we can better understand where MVaaS can deliver for them.  Interestingly enough we found QSR’s similarly digging in.  They are all laseringg in on the strongest/highest demand customers.  Probably not a surprise but there is a growing segment of consumers who purchase 7+ QSR meals per week.  These customers are the golden target that QSR’s want to better understand, appeal to, and attract.  

To do so QSR’s are investing in strategies to better understand who the customer is,  how they spend, and of how best to improve the overall customer experience. The outcome of these strategies are customer-focused innovations that result in improved customer satisfaction and increased sales.  Examples include Jack-in-the-Box, who has installed self-serve kiosks in 230 company and franchise restaurants primarily as a tool to improve guest satisfaction. As a secondary outcome, however, Jack in the Box found that kiosk transactions generally have higher check averages, due to the ability to customize messaging to prompt add-on items.  To grow guest counts, McDonald’s installed Wi-Fi in 12,000 restaurant locations and nationally launched the McCafé beverage line capitalizing on the trend towards designer coffee.

These customer focused initiatives rely on understanding of the customer and customer preferences.  So how do these companies gain the insight to create these strategies?  Usually it involves expensive and time consuming market research.   I’m not here to suggest that market research is a thing of the past but here’s one idea to supplement and accelerate – leverage managed video to get unfiltered visibility to the behavior of multiple customers across multiple stores across a region or across shifts, as they interact with staff, react to in-store promotional displays or pay for their meal.  With unlimited and unfiltered access it is a straight forward exercise to compile cross-store data and quickly understand and respond to the impacts of a change in pricing, a new marketing strategy, or a new promotional plan.  With improved understand of the customer, QSR’s can better develop and adjust growth strategies…and its possible to do with the same tool that will deliver loss prevention, security, and operations improvement.

As segments such as QSR begin leveraging video for customer research and marketing efforts to drive sales they will compound their returns to video.  Of course it takes a open, easy, accessible platform to enable this…and that is where MVaaS truly distinguishes itself. 

A recent press release from Envysion and our sibling company through common investors, Zayo Group, congratulated Louisville on being named CNN Money Magazine’s best place to live for the second time. Even though I don’t quite live in Louisville, I feel proud to be a part of the community. I know my co-workers would agree – nearly 10% of Envysion employees have chosen to make Louisville their home (those 5-minute commutes must be tough!). It’s a vibrant, bustling community that still manages a quaint, small town vibe from the friendly people to the prospering local business environment, right down to our Louisville location.

Louisville has a rich heritage dating back to 1882 as a coal mining town. The Main Street we know today is the same as it was back then. Business is alive and thriving here. The offices filled with growing technology companies like ours that add to the innovative culture of the town.

There was a time when Envysion was a much smaller company and fit in a Louisville office right off Main Street.  As we outgrew that space, we needed a new home and it was clear that the office had to be in Louisville. Although we’re now farther from downtown, I enjoy walking into our building and around the area which is surrounded by trees and set against the beautiful backdrop of the Rocky Mountains. As we head out for lunch or coffee, soaking in the scenery, sun and fresh air, we have a great mix of national chains (including customers, Qdoba and Chipotle) and mom and pop restaurants, literally out our back door. There are 30 miles of biking and running paths that many of the Envysion team use – some even bike to work.  And to wind down, we have a long-standing tradition of heading out after work on the first Wednesday of every month to one of the many great eateries around town.

A big congratulations once again to Louisville. We’re happy to be here!

Marketing and advertising is typically one of retailers’ biggest expenses. So what’s the best way to measure how effectively money is being spent on various campaigns? Sales? Wrong. People Counts.

Previously we examined all the factors that go into Sales.

Where PC = People Count; CR = Conversion Rate; $ = average dollar amount per transaction; and S = Shrink.

If you recall People Counts – how much traffic is driven through the doors into the stores – is largely the domain of the marketer. Once would-be customers are in the store, converting them into actual paying customers becomes the domain of operations and sales (more on this in the next post).

So how do you decide where you need to focus your marketing efforts in order to get the most bang for the buck? We use a scorecard to look across all of our stores to see where people counts are low.

First let’s segue into a quick discussion about one factor affecting people counts that a marketer has no control over: Real Estate.

Real Estate 101: What are the top 3 most important factors determining Real Estate value???

1. Location
2. Location
3. Location

Depending on where any given store is located – how easy it is to find and get to – will affect your people counts. Period. Additionally, the type of location will affect your people counts. For example, free standing locations vs. mall locations will have different people counts by their very nature. Free standing locations are destinations; customers go there with a purpose. Mall locations will have higher People Counts from passerbys who are “just looking.”

Why do I bring this up? Because when you are determining which store locations have people counts that could be improved, you need to compare apples to apples, comparable free standing locations to free standing locations, and comparable mall locations to mall locations.

Back to the point: you use a scorecard to you identify comparable stores with low people counts. Your goal, your purpose is now to do what you do best: figure out a clever way to drive more prospective customers into your stores where there are lower people counts. You could run local campaigns to build awareness. You could run promotions to entice people. You could do… well, a lot of different things. That’s up to you.

Coming full circle, when you report back to management on how good your campaign was, be sure to report on People Counts.

So, you effectively identified stores where you people counts are low. You ran a brilliant campaign and increased traffic. But did sales increase??? Be careful, people counts are just one variable in the equation…

Denver area cinema operators beware. Last night on the radio the deejays were doing a segment on creative ways to score a deal. One gentleman in his late 20s called in and revealed how he hasn’t paid for a full price, adult ticket in years. In a nutshell, he has been defrauding cinemas of revenue using a simple, yet very effective scheme.

Here’s the scheme as the caller explained it on the radio:

You go to a movie theater that has self service ticket kiosks and instead of buying a regular, adult ticket you buy a senior price ticket, often at half the price of an adult ticket. Then enjoy the movie at a major discount.

This scheme works for two reasons.

1. The caller has no moral issue buying a senior ticket. He admits it’s wrong but does it anyway.
2. The employee does not stop the fraud.

When the deejays pressed him for how he gets away with this, the caller says that he knows the minimum wage employee collecting tickets does not care that he has the wrong ticket type. The employee just wants to collect a paycheck and go home. Therefore, the caller said no one has ever stopped, or even questioned, him using a senior ticket

Fortunately, cinemas can limit loss due to this type of fraud with MVaaS. Leveraging Envysion’s powerful reporting capabilities, a cinema operator can easily identify all senior ticket sales at the kiosk register and review the video of those transactions to quickly determine if customers are taking advantage of the senior discount. (The cinema operator might also consider running a report for student tickets too.)

Once the extent of the fraud is determined, it is essential to communicate to employees the seriousness of this type of fraud. Short of limiting the types of tickets sold at kiosk registers, cinema operators must rely on their employees to catch and stop the fraud. Again cinema operators can leverage MVaaS to help ensure, employees are guarding against this type of fraud. If employees are catching and stopping the inappropriate tickets, then cinema operators can expect an certain number of ticket exchanges, i.e., if 10 customers inappropriately purchase a senior ticket in one day, then there should be 10 senior tickets exchanged for full price adult tickets during the same day. Using Envysion’s MVaaS a cinema operator is able to determine the number of senior tickets sold at the kiosk, visually identify any inappropriate sales and compare the number of inappropriate sales with the number of tickets exchanged – all within a matter of minutes.

The channel was a hot topic at the MVaaS summit a couple weeks back (summary blog here) – there are many open questions when it comes to managed and hosted solutions and their path to market.  For starters, managed and hosted solutions present a different value proposition as well as a different technology and operational delivery model vs. legacy video surveillance.  So if you are selling a different story and different set up to a potentially to different set of buyers can it begs the question, should you use the legacy channel model? 

At the summit we heard a variety of answers.  The more security centric players advocated leveraging legacy security channels and players that had broader value props (reaching out to loss prevention, operations, marketing etc.) the feedback was that today’s channel options likely would not suffice or at minimum would need to evolve to deliver successfully.  Here at Envysion we recognize how different our solution is (both value prop as well as technology itself) vs. what the traditional channel has sold.  Because of this, the majority of our sales are direct.  We are certainly open to engaging with channel partners but predominantly in a referral type arrangement vs. resale which has had limited success to date. 

Over the last weeks we’ve had a number of interesting conversations with channel players.  The conversations generally take one of two paths.  The first path is the channel partner that recognizes that the solution we bring to market is different.  In many cases they will say something to the effect of ‘we know the market is changing and that we will need to change with it’.  The second set of conversations is just the opposite.  They involve someone berating me (or a colleague).   Below are a couple examples

1. “You just don’t get how this works.  We own these guys and you have to go through us.  Do you not understand?  This is how we do it in Retail”
2. “We understand that you have a solution they need but…it has to go through us.  Why are you messing with this?”   

In both of these examples Envysion directly engaged an end customer who ended up selecting our solution – the conversations above were ex post with their current channel provider who was upset about losing the business.  You see in their view it was an entitlement…the conversations felt a bit like ones I’ve seen on the Sopranos if you know what I mean. 

Of course disruption and introducing different selling and solution models can rub people the wrong way.  But at the end of the day it is about value delivered to the end customer and/or through the chain that will determine what channel models are successful and can sustain.  At Envysion we welcome the opportunity to work with channel partners who are willing and able to think and act differently.  To go faster and achieve our ambitious goals and reach more end customers we would benefit from working with partners.  But that said a partnership needs both partners to deliver and have economics commensurate with value created.  

Saw a banner ad the other day that reminded me that Envysion thinks differently than the majority of incumbent video providers.  The ad was for one of the leading IP camera manufacturers – it had a very simple tagline: “IP cameras drive increases in sales”.

That kind of statement not only is silly, (how can a camera by itself without anyone using it increase sales), but also demonstrates that the industry still has a technology, not user or application focus.  People can use cameras, whether they are analog or IP, to better understand what is happening in their business.  The thought is that they can then make better decisions with this new knowledge that will enable them to improve the way they operate.  For this to be true, business people have to look at video, see something that is interesting, be able to learn from it and then take action on that insight.  The camera is one piece of the solution, but the key to delivering the value is the person that is to use the technology.  What are they trying to learn?  What tools do they need to learn it? How can you make the learning more proactive and more efficient?  How do you help them communicate the lessons through their organization and make them actionable?  Any increase in sales, or any other improvement, would be driven by the user and this whole process and system, not by a specific camera.

So back to the ad. IP cameras drive increases in sales.  The intended message, given it was an IP camera manufacturer’s ad, must have been that IP cameras, more so than analog cameras, help users increase sales.  What is it about IP cameras that makes this true?  Are they claiming that because of the higher resolution found in many IP cameras that suddenly people make better decisions?  Maybe – but the video provider should be explicit about the impact for the user and how they are going to use that increased resolution to learn something that they otherwise couldn’t and how that will translate into increased sales, not on the fact that it is an IP vs. analog camera.

I see this same thought process with many companies that are promoting MVaaS services.  They implement some form of web-based or hosted video and then make claims about how it will enable you to improve your business and generate a compelling ROI.  MVaaS is a service delivery method, hosted video is an architecture – if you don’t use them differently than you would traditional video, then you may save some money on the cost side but you won’t get anything more material out of them than you did your old video solution, certainly not an increase in sales.  The technology is the enabler, how you use it is the difference maker.

At Envysion we have a differentiated technology that helps us create tremendous value, but the value is delivered by focusing on the user and how this technology can change the way they impact their business, providing them with new insights that they couldn’t have gotten before.  The customers getting the most value from MVaaS don’t care whether the video is hosted or distributed or a combination, whether some or none or all of the cameras are IP – all they care about is whether they can easily get to the insights and do something with them.

The video market as a whole will increase dramatically once more vendors start to focus on the user and how to help them drive value instead of promoting technology for technology’s sake.

At the risk of stating the obvious, at the end of the day most of us are in business to make more money. For a retailer, we can easily distill sales into a simple, four factor equation:

Where PC = People Count; CR = Conversion Rate; $ = average dollar amount per transaction; and S = Shrink.

People count is the number of people – prospects – who enter a location during a given time period (e.g., one day). Typically, marketing drives this variable in the equation by generating awareness and demand through campaigns, but other factors such as physical location also affect people counts.

Conversion Rate is the ratio of the number of transactions to the number of prospects. Conversion should be owned primarily by operations who manage staffing levels to ensure proper amount of “touches” per prospect and enough cashiers to ensure that line times are tolerable and refine sales techniques to more efficiently convert warm prospects.

Average dollar amount per transaction for a given time period (e.g., day) often comes down to sales technique – up-selling or cross-selling – e.g. “these wicking socks will really keep your feet comfortable in those running shoes…”

Shrink is money lost due to theft and fraud and is the domain of the operations and loss prevention team to identify and mitigate sources of shrink.

Using a system such as Envysion’s MVaaS provides an end-to-end solution to review and manage each variable of the equation. Cameras equipped with video analytics technology perform People Counting. Integrated POS is combined with People Count data to compute Conversion Rates. POS data is also used to compute Average Dollars per Transaction and is used by Loss Prevention for other exception-based reports to reduce shrink. One system is leveraged across all functions of your organization to have a more profound impact.

Envysion will be co-presenting with Qdoba at NFSSC this week – specifically speaking to using MVaaS to deliver demonstrated operations and profit improvement.  The team will be at the show for in Indian Wells, CA for the week.   Looking forward to seeing many of our current customers and prospect

Please join us for our presentation, stop by our booth, or catch any of us at the event.  We look forward to speaking with you.

As people continue to demand increased convenience, more and more casual dining restaurants have begun to offer curbside service, which combines elements of a drive-thru with take-out. In essence, it works like this: A customer places an order via phone, fax or email to a casual dining restaurant. The restaurant indicates when the order will be ready for pick up and the customer gives the restaurant a description of his vehicle. When the customer arrives, he parks in a spot designated for curbside service, usually near a side door of the restaurant. This section of the parking lot is typically monitored by video so that the restaurant staff is aware when the customer arrives. The restaurant server collects the order from the kitchen, prints a receipt from a register near the curbside door, delivers the order to the customer and collects payment.

While curbside service opens new business opportunities for casual restaurants, it also creates new opportunities for loss, including:

• Sweethearting: The employee delivers more food than the customer actually paid for or delivers food that was not ordered at all.
• Under-ringing: The employee under-rings the sale and pockets the difference.
• Fraudulent Voids, Discounts or Comps: After the server delivers the food to the customer the employee applies a fraudulent void, discount or comp to the transaction and takes the cash difference.

These have a negative impact on food costs and restaurant-level profitability. Fortunately, casual restaurants can utilize MVaaS to guard against this costly lost. Leveraging Envysion’s easy-to-use video-based intelligence, the restaurant operator can quickly identify events at the side door that may indicate theft and rapidly review the video footage. Since Envysion’s MVaaS integrates with the POS, restaurant operators are able to quickly get a complete understanding of what actually occurred by reviewing the POS data with video of the curbside parking area and the side door register. The restaurant operator can easily build reports and alerts for a variety of transaction types at the side door register and review the video to determine, if a customer was present at the time of the transaction, if the correct amount of food was delivered and if the full transaction amount was entered in the register.  The restaurant operator can also use Envysion’s motion mask feature to identify how many times employees go through the side door or how many cars park in the curbside parking spaces. Here are some of Envysion’s recommended reports for identifying curbside service fraud:

• Voids, discounts and comps at the curbside pickup register, which are easy ways for servers to skim cash from the total bill
• Low dollar amount cash transactions at the curbside pickup register, which can indicate that the full order was not entered
• Employees with below average sales at the curbside pickup register, a possible indicator of sweethearting or theft