Will Fuentes was always asking for discounts at the electronics retailer his brother worked for; so his brother suggested Fuentes take a part-time job at the store during the holidays.
Fuentes, a recent law school graduate at the age of 23, had just begun working for a law firm but decided to go for it anyway. He enjoyed the position and created innovative ideas on how to improve sales, so much so that he ended up impressing the chief operating officer, who suggested Fuentes make the switch to the retail sector with hopes of moving up the corporate ladder.
“That Monday I quit the legal field and became a retailer. A few weeks later I was a manager in a store,” he said.
Fuentes continued to experiment with his revenue-boosting ideas, which included asking customers: “If I can discount this for you in a couple days or weeks, do you want me to contact you?” He kept track of who wanted to be contacted for certain products, and this system allowed the profits of his local store to soar. Over time, he formalized his approach.
“My adviser, Evan Burfield, and I were talking and he said, ‘What you have is awesome, but you’re never going to make it work unless you make it a full-time thing.’”
With that final push, Fuentes created Lemur IMS.
“Lemur IMS is an inventory management system for big-box retailers that connects local customers with local, slow-moving inventory. Our system drives additional revenue and profit, and it delivers personal offers to customers on items they are seeking. For example, if a customer wants to buy a television that is priced at $1,000 but only wants to pay $950, managers can offer to contact the customer if the TV can be discounted in the future. This helps move the product quicker, and it allows retailers to get a larger profit because they can contact interested customers before they have to place a slow-moving item on clearance. It also builds a loyal customer base who knows that they will always get the best deal at one store over another.
“Retailers use Lemur on a tablet app, which is customized for each specific retailer. We provide the tablet and app to our customers, who then carry the tablet around the store to collect customer and product information. Most retailers have someone who is supposed to be interacting with the customer, asking, ‘Hey, did you find what you were looking for?’ This system allows retailers to track who is interested in what product, at what time of the year and at what price. Our local approach to customer and inventory data is unique. We look at all aspects of inventory information, not just velocity, cost and revenue.
“We are located in Washington, and currently only have two full-time employees, myself and my co-founder Cary Scott, and two interns. Our challenge at the moment is figuring out which market segments to pursue. Should we focus on our initial target segment or build a more generic platform that can encompass all retail segments? We’d really like to jump on all of the opportunities that keep rising as more and more big-box retailers find out about our product, but how do we pursue all that is in front of us and not lose sight of our end goal?”
Elana Fine, associate director, Dingman Center for Entrepreneurship
“I’d suggest keeping two things in mind as you come across new opportunities. First, be focused on what you see as the largest market opportunities, yet nimble enough to seize an opportunity. As a young company you may often be tempted by prospects that may generate early revenue, but are outside your target customer. Jump on those that will provide you functionality or a valuable customer reference you can leverage in the future. At the same time, you need to have the conviction to say ‘no’ to those that might take you off track.
“Second, be careful of the line between product and services companies. A highly customized inventory management system may be very attractive to retailers who have varying requirements. However, implementing those systems have lower margins than a software product that has a common back end that can serve an electronics retailer and a clothing retailer with minimal customization. Many software companies start off customizing products that they package and sell across an industry. The most profitable figure out their core platform quickly. If you find you are having to customize for each electronics retailer, you may need to step back and make sure your technology solves the problems they share.”
“You are right that we need to be correctly positioned and identified as what we are, software-as-a-service and not a product.”