Web-Based Dry Cleaners Take Dirty Laundry to Work

SAN MATEO (05/08/2000) - Web-enabling and automating the everyday chores that many consumers find onerous is a business-to-consumer model that appears to be gaining some traction.

Despite the hard hits to the value of their stock taken by grocery shopping online sites such as Peapod and WebVan, another company, PurpleTie Inc., will launch this summer a similar Web-based pickup and delivery service -- but this time for dry cleaning.

By building a brick-and-mortar back end to the front-end Web service, like Amazon.com, PurpleTie gets an additional element of control that many pure-play dot-coms lack.

Dry cleaning is a $32 billion industry that has no dominant players, according to founder and CEO Payam Zamani.

PurpleTie's approach will be national in scope. Centralized processing plants will be built around the country, with the first rolling out later this summer in Northern California.

"You need a closed-loop system. The online car-buying sites have the problem that they can't control how their customer is treated throughout the process.

So instead of partnering up with 5,000 dry cleaners, we will open up 25 centralized processing centers," said Zamani who is also the co-founder of AutoWeb, one of the first online car-buying sites.

Although pickup and delivery services are not new in the dry cleaning industry, the PurpleTie site will offer more flexibility. Users will be able to view orders and change delivery locations and times and even include special cleaning instructions.

The business model Zamani created will aggregate demand and handling by targeting businesses rather than residential customers.

"We want to make sure the first order that we carry on a per transaction basis is profitable," Zamani said.

Marketing guru Dave Taylor, a former Gartner e-business analyst who now runs E-Market Holdings in Stamford, Connecticut, believes PurpleTie is on the right track but does face competition.

"Going after employees at a business site rather than at their home is the most economical way of getting a large customer base quickly. But how will they unseat existing dry cleaning relationships that companies have?" Taylor said.

Profitability will be based on number of stops per hour and number of customers per stop, Zamani said. To do that efficiently, the business model Zamani created will aggregate demand and handling. PurpleTie will use Descartes Systems intelligent scheduling application, which offers open windows for pickup and delivery based on location, number of stops, availability of drivers, and the profitability of the customer.

"If you do a $1,000 worth of cleaning with us, you might get more open windows for pickup and delivery than another customer," Zamani said.

Delivery trucks will be equipped with both GPS systems and wireless handsets for rerouting on the fly.

In the future, Zamani plans on offering a broader spectrum of services at the site and for delivery -- everything from shoe shines to apparel.

PurpleTie is starting life with a great deal of high-priced Internet talent, including Chief Operating Officer David Kallery, former products and operations vice president for e-Visa; Chief Financial Officer Robert Stoffregen, former CFO at ZapMe and Sharper Image; and Vice President of Marketing Bill Young, former marketing guru for Autobytel and iPix.com.

But perhaps the best advice they will get is from advisory board member Sid Tuchman, who owned 50 dry cleaning stores in Indiana.

PurpleTie Inc., in Pleasanton, California, can be contacted at www.purpletie.com.

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