The acquisition will add more than 300 products to L’Oreal’s lineup.
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Melvin says the actual wiring of the store takes only a short time. For a store that wants 10 contacts or fewer, Apigent technicians can finish the job of installing the sensors and running the wire to the server in five hours. The cost of installing a system is $85 to $100 per run, Melvin says. Once installed, retailers pay a monthly fee of about $300 per store, depending on the number of stores using the system.
Furthermore, the system does not require new technology, Melvin says. “The technology resides on the customer’s hardware is operating-system independent,” he says. “We’re not forcing the customer to change out their technology investment. To make sense from a business perspective, you have to tap into their existing infrastructure.”
Return on investment in this system comes in such areas as reducing theft, more precise labor scheduling and the ability to fix a problem as soon as it occurs, rather than waiting for the end of the reporting period to find out there was a problem, Melvin says. “The cost was not expensive in terms of capital outlay,” Jacobson says. “There are minimum recurring expenses every month, and the initial fee to create reports was not that high. The real benefit was not having to spend $100,000 or $200,000 to create reports and craft a system.”
Furthermore, the Apigent system allows retailers to increase the number of stores that a district manager can supervise. While El Pollo Loco says it obtains a benefit in freeing up area managers to concentrate more on coaching store managers, Apigent claims that its system allows managers to supervise twice as many stores.
Apigent was a spin off from Chickasaw Holdings, a telecommunications and Internet services provider that serves 30 states. Melvin and Chairman of the Board Jim Peterson both have long ties to the retail and restaurant industries. Melvin was founder of point-of-sale company Compris, which is installed at more than 40,000 points of sale in major restaurant chains, as well as Disney theme parks and Kmart Corp. stores. He also is technology adviser to the National Restaurant Association. Peterson was chairman and CEO of Bojangles’ Restaurants and headed up Whatburger during its growth to 550 locations. He is also co-chairman of the International Franchisee Association and a board member and former chairman of the National Restaurant Association.
Melvin has plenty of stories to tell about how customers have used Apigent’s system and saved money doing so. For instance, he reports about the drive-up window at a restaurant where employees didn’t want to be bothered with customers in the wee hours of the morning. ZEOM.net reported to headquarters that for every 50 cars that pulled up to the drive-up ordering device, only 10 stopped at the pick-up window. He also tells about the pizza restaurant where the warming oven was set 50 degrees hotter than was intended because the sign on the oven stating the proper setting was smudged and employees couldn’t read the proper setting. Headquarters discovered the problem during a demonstration of the Apigent system.
Melvin says Apigent’s biggest competitors are internal IT systems and POS vendors. “Both have limited vision,” he says. “They’re focused on POS data and POS data just isn’t enough.”