Tony Bone had been in the VAR business since 1997 but decided three years ago to work for himself.
His answer was Zeroedin, created with a partner in late 2004 to provide customer relationship management (CRM) and e-commerce solutions for mid-market specialty retailers.
“In order to provide more value to customers, you need to build up industry knowledge, you need to put those skill-sets on your team so you can provide more cost-effective services to people in a given industry,” said Bone.
While this is becoming a more common approach to the business, he said, there weren’t a lot of solution providers doing it at the time.
The company’s name “lends itself to the word ‘focus,’ and that was our whole premise,” he said. “We wanted to zero in on certain industries.”
Today that focus is specialty or boutique retail chains with five to 50 stores. One of its clients, for example, sells makeup to the Asian market.
“Everybody wants to be the next Lululemon,” said Bone. “They want to go from the five stores to the 50 stores, but in order to get there they need that infrastructure, because when the retailer starts to grow you have to be able to disseminate the knowledge that’s usually in the entrepreneur’s head out to your managers.”
But he stays away from gas stations, grocery stores, and food and beverage companies. “That’s another whole genre of retail – that’s more 24×7, high-demand systems,” said Bone.
“So we’re looking for more of the boutique stores.”
Zeroedin creates custom solutions, tying together a client’s systems to Microsoft’s point of sale and Dynamics NAV enterprise resource management applications to cover everything from cash registers to warehouse management. The system can then be extended online.
Put pieces together
“It’s made up of several components but we put all those pieces together so the customer doesn’t have to be the general contractor,” said Bone.
A lot of retailers can’t tie in sales at the cash register with visibility across their organization, he said.
“There’s a lot of retail solutions out there that don’t have tight integration with the back office – it’s an afterthought,” he said. “We look at it from the back end and look outward because everything resides at some point in the back office.”
Some vendors provide end-to-end solutions, but they tend to be larger players, he said, such as Retek, which was acquired by Oracle, and Triversity, which was bought by SAP. But Bone scoffs at such heavyweights, arguing it’s hard to take an ocean liner, strip down some of the niceties and sail it in a lake because it still sails like an ocean liner.
“There’s not a lot in the mid-market that’s offering the strength of an ERP system in the back office and the strength of a strong POS system in the front office,” he said. “Usually one or the other suffers.”
For customers looking for a software as a service solution, Zeroedin can offer a hosted back-office application from NetSuite.
“They don’t have to worry about whether their system is being backed up, if the data’s safe,” he said, “and that trend is becoming more evident in the industry that software as a service is increasing, not decreasing.”
It also means retailers don’t have to invest in as much infrastructure at their head office, he added.
Zeroedin is considering expansion into related areas, such as multi-mode retailers that do some distribution and/or manufacturing, or sub-contract that work out to China or the Eastern Bloc.
“Especially in Canada, because we don’t have the size in demographics that the U.S. does, it’s tough for us just to sell one thing and be a big successful store,” said Bone. “We’ve got to be multi-purpose companies here.”
The company, which has six employees in Toronto and another six in California, has revenues of between $1.5 and $3 million.
Eventually Bone hopes to sell through the channel.
“We will, but we aren’t there yet. We’re going to get our first half a dozen customers up and running smoothly and then put our VAR program in place. But our intention is to provide the solution through VARs because you can only service so many people.”