Each week, we seek expert advice to help a small or medium-sized business overcome a key issue.
We bank, shop, even book our vacations with the click of a few keys, yet dry cleaning remains one of the few tasks that has, so far, resisted the switch to a primarily online convenience.
There’s some logic behind the delay: Somehow, the clothes have to get from home to dry cleaner. That’s why, come Saturday morning, lineups can snake out the door.
Ryan Dingman, Reza Saljoughian and Nima Pazouki are hoping to end this analog anachronism. Last June, the three Toronto-area business partners launched Clean It Online, a cloud-based dry cleaning service that operates entirely on the Internet.
“We have a completely online system that manages the orders from end to end,” Mr. Dingman explains. “Our customers get notifications all the way, their payments are processed online and we communicate with customers predominantly through the system.”
Unlike Urban Hamper, another Web-based Toronto company that acts as a third-party broker between independent dry cleaners and clients, Clean It Online promises to take exclusive care of your best threads from start to finish.
And though many small dry cleaners offer delivery options, Clean It Online wants to elevate the urban dry cleaning experience by focusing on customer service.
“Traditionally, dry cleaners don’t have a system that operates on demand, so they’ll say you can come pick it up every Monday. That’s great for some, but we’ve found that people generally want the flexibility to be able to schedule their orders when they want, and our system allows them to do that in seconds, whether it’s through their phone, tablet or PC or an app we have coming out soon.”
By eliminating the need for a physical office, and partnering with a dry cleaning facility that cleans clothes in bulk, the company’s overhead costs are low, which means they are also able to offer competitive pricing.
The company’s growth shows there’s a market for their idea. Clean It Online hit profitability in January and Mr. Saljoughian says their clientele has grown by 300 per cent since last summer. The trio has even fielded requests for franchise information from interested parties across Canada.
Before they decide to licence their wares, however, the partners still have a major kink to iron out.
While their service has proved popular at condominium buildings with a concierge to keep an eye on precious cargo, some homeowners and apartment dwellers have expressed concern over the company leaving their clothing bundles unattended during the day. The company also delivers to customers’ workplaces, but some clients resist the idea of having their clothes brought to the office.
Mr. Dingman says they have considered installing secure lockers in concierge-free buildings, but they found that option expensive to set up and subject to spatial concerns.
They could also partner with convenience stores to provide drop-off points. But customers would still need to physically go to the store, which defeats the original purpose.
Until they solve this issue, their growth may be hampered by limited access to safe and convenient physical outlets.
The Challenge: Can a Web-based dry cleaning company work, or are there too many roadblocks to bringing this service into the Internet age?
THE EXPERTS WEIGH IN
Elspeth Murray, professor of strategy and entrepreneurship at Queen’s School of Business, Kingston, Ont.
These guys have a really good shot at making this work because they’re participating in the total value chain of the business. Unlike their competitor, which is just brokering it, they should have the margins to play with. And that’s where they can really get an edge on the trust part: I give you my clothes and I have one less throat to choke, so to speak, if there’s a problem.
That said, I still think they’re starting off too broadly and they’re struggling with trying to define convenience for everyone as opposed to convenience for a subset of the population.
Once they’ve figured out what convenience actually looks like for their target group, then they can figure out what the solution might be. Pick a partner that actually speaks to convenience. I only go to the drugstore when I specifically need something, but I go to Starbucks every day. Think about your neighbourhood superboxes from Canada Post and think about having the equivalent in your local coffee shop, where you could drop stuff off and pick stuff up. They can e-mail customers a code for their particular slot in the box, and for dropoff they could just have a bin to throw the laundry in. On the local coffee chains’ part, they are looking at an opportunity to drive more loyalty.
Maxime Gaudreau, vice-president for innovation and digital performance at the marketing firm iProspect Canada, Montreal
One possibility is to identify specific timeframes when most customers may still be home, during which the bulk of deliveries could be scheduled. Perhaps they could even create a mobile application that could be synced with the digital agenda of a client.
Another option is the creation of partnerships with transportation companies, for example taxi companies, who already benefit from advanced route optimization software. It would then become possible for a Clean it Online client to easily find a taxi available for a pickup in the next few minutes. This could be an option offered at a premium price for clients in need of super-speedy service.
Finally, it would be interesting to explore the possibility of offering dynamic pricing depending on the pickup and delivery location and timeframes. It would therefore become possible to optimize the transportation routes by offering rebates to clients who are willing to set up delivery during an available timeframe and at a designated location. These offers could be communicated by text message, e-mail and on social platforms.
Rob Winn, co-founder of Urban Hamper, Toronto
Urban Hamper found itself in a similar position at the outset. We had established partnerships with dozens of dry cleaners sprawling across the Greater Toronto Area. Unfortunately, this “one size fits all” approach proved disadvantageous for us when quality was not consistent and some customers were not at home to accept their orders.
We consolidated our partnerships to include dry cleaners who operate their own facilities and own a number of stores throughout key locations in Toronto. We also made a decision to only serve customers who have a concierge at their buildings or a receptionist willing to accept their clothing.
Narrowing your focus and determining who your actual customer is takes time, effort and the ability to step back and think objectively. Offering a great user experience and having satisfied customers is an important way to build brand loyalty, but this should be done only after determining who will be using a specialty concierge service such as Clean It Online.
THREE THINGS THE COMPANY COULD DO NOW
Narrow the focus
While it’s tempting to try to be all things to all people, this model may work only in a limited capacity. Focus resources on targeting a demographic.
Consider partnering with places that people are most likely to visit as part of their daily routine, like a popular coffee chain.
Consider an app that plugs into independent forms of transportation, such as hired taxis. Offer incentives for having clothes delivered during traditionally inconvenient hours.
Interviews have been edited and condensed.