Private investment firm Comvest Partners acquires the financially troubled e-retailer, which filed for Chapter 11 bankruptcy protection in March.
Web technology that allows real-time monitoring is making in-store security cameras more than window dressing.
Retailers have long known that having a video camera in a store is a great security device and helps keep the clerks a little more alert. But the drawback to having a closed-circuit TV system or a videotape system is maintenance. Especially in small stores where a manager might not be on duty all the time, the retail organization would have to rely on the clerk to replace the tape in the camera every few hours and to make sure the camera is operating properly. And if the tape runs out-whoops! Who knows what might have happened while the tape was out?
Now a group of vendors of digital video technology is hoping the web will change retailers’ approach to video monitoring. “Most retailers have closed circuit TV cameras, but most aren’t taking complete advantage of the technologies that the Internet offers,” says Mike Tobin, vice president of marketing for Eyecast Corp., which offers retailers the ability to monitor their in-store video cameras over the web.
The Eyecast system-which is running about 600 cameras-links a retailer’s cameras to a small box in the store and from there to a phone line and then to the Eyecast IBM mainframe in Herndon, Va., which hosts Eyecast’s web site. Any time of day, managers from a retailer’s headquarters or division office can log onto the password-protected web site and see what the camera sees.
The server also archives the images, all date and time stamped. So if the viewer wants to see what was happening at a specific time, the viewer can type in the date and time and watch the exact desired moment.
Besides Eyecast, providers of such services include OrtegaInfo Systems of Santa Clara, Calif., BroadWare Technologies of Cupertino, Calif., and iMonitoring.com of Mountain View, Calif. They are in the right place to take advantage of a shift in how businesses are using streaming media, says John Parker, senior analyst in multi-media and content infrastructure with Aberdeen Group. “We are seeing a shift from streaming in entertainment to streaming in the enterprise,” he says.
BroadWare’s system links cameras to the web in the same way Eyecast does. They feed into servers on the East Coast or the West Coast, although BroadWare plans to position servers near customers as the client base grows. Ortega’s cameras feed into its client’s own web hosts. iMonitoring maintains the videos at the retailers’ site.
While retailers have used video technology for a long time, its migration to the web is new. Eyecast, for instance, has been in business only since 1998 and installed its first web-based video system in the middle of last year. Ortega has only had such installations in the U.S. for one year and in Asia for two, says Thomas Stoker, senior director of marketing and business development for Ortega, which is also only 3 years old, although its predecessor company dates back to 1993. BroadWare is launching its web-based offering on April 4 and has been running beta tests in three locations, one of which is a single-site specialty sports retailer.
A number of factors have come together to make the market ready for this technology. “The compression algorithm has gotten better, the bandwidth has gotten better, the browser and media technology have gotten better,” says Mark Olson, vice president of marketing and sales at iMonitoring, which is close to deals with a drugstore chain, a paint store chain and an eyeglasses retailer.
While Eyecast is selling its system as a management tool, retailers primarily have used video systems for security purposes-and they continue to do so with the web-based video. “It’s a really good tool, especially when employees know that they are being watched,” says Paul Akhavan, general manager of Pappillon, a six-store chain in the Washington, D.C., area that sells neckties and men’s accessories. Using the Eyecast system, Pappillon was able to nab a dishonest employee, he says.
Replacing the manager
Pappillon operates stores of 400 to 600 square feet, usually staffed by a single employee. Often that employee has a key to the store after only a few weeks of training. Having a camera on-site that management can view at any time helps Pappillon manage its employees without having a manager in the store or hiring someone to make the rounds of the stores. “A good salesperson in a store like ours can make or break the store,” Akhavan says. “This allows us to see if our clerks are courteous, if they are greeting customers when they come in the store, if they’re doing suggestive selling and giving information to the customer. Then we like to see if they’re doing things like straightening out the ties when there are no customers. This gives us some peace of mind.”
Pappillon paid a $2,000 set-up fee and pays $350 a month per store. Eyecast customers pay $50 to $400 a month per store for cameras that record at five frames per second at the low end up to 30 frames per second. Set up fees typically are $400 to $700 a camera. All equipment is owned and maintained by Eyecast so retailers take no risk with equipment. “If it breaks, we replace it at our own expense,” Tobin says. Eyecast’s system operates over any phone line, but typically is linked to a DSL. The camera feeds into a device on site that converts the camera signal to MPEG-4, a moving picture standard. While Eyecast archives the videos at its own location, it also has redundant storage of up to seven days at the retailer’s site. Eyecast is backed by a $30 million investment led by ComVentures and New Enterprise Associates.
Akhavan says the video system has allowed Pappillon to avoid having a manager in each store, saving the company $30,000 a year plus benefits per location. Now a manager can oversee a number of stores by using the video system. Pappillon tells all its employees that the camera is there and is on all the time. “It’s not a secret,” Akhavan says.