Bar-code tags, ATM-style machines drive high-tech laundry business
In the dry-cleaning world, they're called the ``not mines." Those too-small jeans and who-would-wear-that dress that infiltrate your dry-cleaning order.
Zoots, a Newton dry-cleaning chain, has hit upon some high-tech solutions to curb the ``not mines" and ``where are mines?" (the favorite cashmere sweaters that go missing in a vast dry-cleaning vortex) that plagued the company after it was launched in 1998 .
In the early days, Zoots was spending 6 percent of revenue on lost and damaged claims -- about six times the industry average -- and not doing a great job of cleaning the clothes it didn't lose.
``While we always knew this business would be challenging, we underestimated the magnitude of the challenge," said Tom Stemberg, one of Zoots's founders and creator of Staples Inc., the Framingham office-supply chain. ``As we lost customers' favorite garments or failed to remove spots, we had huge customer payments and defecting customers."
Zoots knew change was needed to survive. So the chain brought in a manufacturing team from the Massachusetts Institute of Technology to focus on quality and productivity. The leaders began investing more in technology, such as permanent garment tags and ATM-style dry-cleaning machines that automatically dispense orders.
In recent years, Zoots finally began to do what it had set out to do: take the dry-cleaning world by storm, offering quality 24-hour service, home delivery, and high-tech perks like e-mailed invoices at dozens of stores. The 78 -store chain says it has cut its loss claims to less than 1 percent and made huge gains in adding new customers, keeping existing customers, and improving margins at its locations in nine states.
Along the way, the $66 million company got the confidence to continue its acquisition spree -- including last month's takeover of Sarni Cleaners -- and racked up more than 75 Readers Choice awards for best dry cleaner.
``Dry cleaning is a hassle, a chore. Nobody enjoys doing it," said Todd Krasnow, chairman of Zoots's board. ``It's a necessary evil. So we try to make it as easy as possible."
To tackle the problem of lost garments, Zoots largely ditched its system of putting removable tags (which often fell off) on clothes. Instead, the company developed a permanent garment identification tag that is attached to the inside of shirts and pants pockets with a heat seal. The tiny tags have a bar code that is scanned about eight times throughout the dry-cleaning process, from customer drop-off to cleaning at the plant in Brockton.
These permanent ID tags, which Zoots calls the license plates of the dry-cleaning world, can withstand the wash cycle and capture customer preferences, including no starch, hold the pleats, and so on. That way, employees don't have to enter this information each time garments are dropped off. When workers scan clean clothes after they return from the plant, an e-mail notice is generated to the customer, saying the order is ready. Customers can also sign up for automatic billing.
Chief executive Jim McManus said Zoots has saved about 20 percent in labor costs with permanent tags, but the real benefit is improved customer service. All the kinks aren't worked out -- Zoots still loses garments once in a while -- but the difference now is that they can usually track down any missing slacks or blouses.
Better tracking has also allowed the company to focus on other innovations, such as the introduction of lockers and automated devices that dispense dry-cleaning orders so that customers can pick up clothes any time of the day.
Roberta Clarke , an associate professor at Boston University's School of Management, said advances in technology have fueled consumers' appetites and expectations for 24-7 services -- from computer assistance to healthcare to dry cleaning. But in the dry-cleaning business, many mom-and-pop stores can't afford the investment -- upward of $50,000 per ATM-style machine. Zoots, however, has an annual technology budget of about $1 million and has spent more than $15 million building its technology infrastructure over the past few years.
When customers swipe their credit cards, the machine automatically identifies their garments and retrieves the order from the clothes rack into a small window. In Wellesley, 65 percent of the store's volume is processed through the automated machines, known as Zoots machines, and the company is looking to expand its capacity. Over the past year, the company has introduced this concept to stores in Brookline, Concord, and Newton, and it's expected to be rolled out at several other stores in coming months.
At other dry cleaners, Newton resident Mac Blythe said, he used to forget to pick up his order and then would scramble trying to figure out what to do when he didn't have clothes. Now, the 43-year-old electronics company general manager doesn't worry. He stops by Zoots at 11 p.m., after the kids are asleep.
``I can go in and get clothes whenever I want, regardless of what time it is," Blythe said. ``It's very convenient."
Jenn Abelson can be reached at abelson@globe.com. 
