More Than Mug Shots

When Brandon Knudsen discovered that the food/beverage costs at his upscale coffee shop were running 25 percent above the industry average, he knew he had a problem. He just didn’t know what it was.

“I thought maybe our vendors were not delivering everything we had ordered and paid for,” says Knudsen, who with wife Camrin owns and operates Ziggi’s Coffee House in Longmont, Colo. “So I restructured how they delivered and I kept trying to figure out what was wrong. But I couldn’t identify the problem. All that time, I was going about it completely wrong.”

Ziggi’s had a closed-circuit video surveillance system, but it was cumbersome to use and therefore underutilized, he says.

“To view the store remotely, you had to have the software installed on your computer, which was a pain,” Knudsen says. “And although they gave you two cameras, when you watched you could only see part of the store from the main camera. Then you got a smaller image — like a television picture-within-a-picture — of another part of the store. But you couldn’t see everywhere.”

Another problem with that system, he says, was the review process. “You couldn’t go to the exact second that a behavior occurred,” Knudsen says. “You had to slowly watch every single thing.”

Last spring, Ziggi’s installed Envysion Video from Louisville, Colo.-based Envysion, a provider of web-based video surveillance solutions. With five cameras, Knudsen can now see what is happening anywhere in his shop. “I can read the letters on a $5 bill as clear as day,” he says, and the ability to “easily search the Envysion videos for specific incidents is awesome.”

Because all that is needed to remotely view the store is a web browser and a secure password, Knudsen can give friends and family — including his father, a silent partner in the business — the ability to see inside the coffeehouse whenever they like.

“With my other system, I had to put in a disc, download software, type in an IP address and all that other nonsense,” he says. “I had a hard enough time doing it, and I knew what I was doing.”

Beyond LP
Matt Steinfort, president and COO of Envysion, says the network-based surveillance solution has a number of applications that go beyond loss prevention.

“Historically, people would put cameras into a business like Ziggi’s … just to catch bad people doing bad things, or to prevent a criminal who spots a camera from doing something bad,” Steinfort says. “But being able to see inside your business gives you the ability to improve the way you are operating and to manage from a remote standpoint rather than being in the store all day. That means owners and managers can leverage their time more effectively and potentially manage more locations.”

Operators of chain or multi-unit stores (current Envysion customers include IHOP, McDonald’s, Shell, Chipotle Mexican Grill and Qdoba) are able to remotely look at live or recorded videos for all stores in their enterprise and, with the video system tied into POS, can get video verification of transactions occurring at the register, helping to identify incidents of employee theft.

Between them, the Knudsens used to spend 17 hours each day physically being in the coffeehouse. “One of us would leave [home] at 4 a.m. and one of us would close the shop at 9 p.m.,” Brandon Knudsen says. “Now we leave the computer on the kitchen counter and we watch it all the time. We’re usually at the coffee shop by 7 a.m. and out by 4 p.m.”

Knudsen rates customer service as a top priority. When he sees lines getting long and only one associate working the counter, he can call the store and redeploy workers. “The second girl is usually in the back, washing dishes or something, so we tell her to go right to the counter to help the customers,” he says.

The cameras are attractive but quite visible — a feature Knudsen particularly likes. “If someone walks in here thinking, ‘This is a coffee shop, I can easily rip off $500 bucks’ and then sees the cameras on him, he’s going to turn right around and walk out the door,” he says. “I love that.”

And if someone shady walks in on a lone employee at night, “the kids know that I’ll call the police and have someone down there in a second. It’s almost like having a second person there, and they feel so much better about that.”

A training issue
When Knudsen first began performing remote video surveillance, what he saw stunned him. “The kids were stealing,” he says. “I don’t think they knew they were stealing — they were just being kids — but they were taking free drinks for themselves, they were giving their friends free drinks, they were using 20-cent paper cups to drink water from three or four times a day. They didn’t comprehend; they didn’t have a clue as to how much that all added up to, and how their actions were impacting my business.”

Ziggi’s shrink problem became a training issue, and Knudsen didn’t fire any of his youthful employees. “They were full of energy; they were awesome with the customers,” he says. “They were just being very careless.”

Turnover rates are high among part-timers, so most of the associates who first worked for Knudsen have moved on, but the Envysion video system remains a key tool for preventing shrink.

“Because I can see clearly what is happening in the shop and because it’s so easy to review, I can clearly see all the areas of the store where shrink might happen,” he says. “And the kids all know that now. I’ve shown each one the system and how tight it is. I explain that having this system is for their safety, but at the same time, we can see what is going on.”

As a result, food and beverage costs are now in line with segment averages.

Envysion sells its solution to businesses, but Ziggi’s took advantage of the subscription option. “I really didn’t want to make another large capital investment,” Knudsen says. “This way I pay by the month, and just from peace of mind I feel I reached an ROI on Day 1.

“I’d estimate with all the money we’ve saved from reducing shrink, I probably made my money back in a few weeks,” he says.