You Better Shop Around

As with any catalog or retail shopping adventure, a customer’s experience on your Website can make or break your relationship with that buyer. So when you’re seeking a service provider to build, upgrade, or maintain your Website, you need one that not only can implement an e-commerce system but that also understands (or is open to learning — quickly) the niceties of catalog design, sales, and operations.

Whether you’re establishing a Web presence or looking to expand or improve upon an existing site, there are several steps you can take to increase your chances of finding the ideal service provider.

Speaking objectively

First things first: You need to know your e-commerce objectives. This entails developing a detailed understanding of how you want your site to look, how it will work, and — perhaps most important — how it will fit in with the rest of your company, from both a business and an operational standpoint. Do you want your site to sell the same products as the print catalog, or will you be adding SKUs online? Do you plan to liquidate inventory on the site? If so, real-time inventory capability is crucial.

Get a sense of what you’re willing and able to do inhouse vs. what you’ll need — or want — to outsource. After all, designing the site is only the start. A Website has to be maintained and managed, which means not only updating information but also making sure that everything is running properly 24 hours a day.

How much that will cost you will be roughly proportional to what you need, tempered somewhat by how much you expect to do inhouse. Consequently, costs can vary widely — maybe even wildly. At one end of the spectrum, if all you need is someone to host your site and provide some e-mail accounts, that could cost as little as $50-$100 a month with a company like Earthlink or Yahoo!.

If, on the other hand, you need multiple dedicated servers, search engines, databases, load balancing (a type of traffic management), security measures (such as a firewall), and employees or contractors who can write the necessary software, perform data mining (essentially finding, pulling, and aggregating relevant data from databases), and monitor the site, all of that can run to tens of thousands of dollars.

Variables — in no particular order — include the size of the database you’ll need, how much backup and storage you need, whether you want fail-over equipment, and how many servers you need (which will depend in large part on how much traffic you expect).

Then there are issues concerning historical data and order information. Will the historical data from your catalog customers be maintained separately from the order data of your Web customers? Will the data be available online to your customers? If you give your customers access to their order information on the Web, will you allow them to modify their orders? If you do, how will you coordinate that sort of activity between the Web channel and the catalog channel?

When determining your objectives, get input from every department in the company, says Ernie Schell, president of Southampton, PA-based operations consultancy Marketing Systems Analysis. A company’s e-commerce strategy “is too important to leave just to marketing,” he says.

For instance, at National Business Furniture, a multititle mailer of office furniture, “every area of the company is represented on our Internet committee,” says chief operating officer Kent Anderson, “and that works well for us. We don’t have the kind of channel conflicts that we might have had otherwise.”

Even so, Terry Nelson, e-commerce marketing manager for Dodgeville, WI-based Lands’ End, the $1.36 billion apparel and home goods mailer, says that regardless of whether you’ll be outsourcing some, none, or all of your Web functions, one principle is key: “Have a plan. Get everyone involved.”

Indeed, every major department in your company has no choice but to be involved in Web operations. So they’ll need to figure out how to integrate themselves with the Web. Will Web and catalog operations be separate? Will Web and catalog share inventory and inventory-control systems but have separate ordering operations? If you start them as separate parallel operations, do you have a path for eventually integrating them? “The definition phase can take weeks or months,” Schell says. “Put your conclusions in a document.”

Ultimate responsibility for Web operations, Schell adds, should rest with the company’s chief financial officer or an executive in operations. Operational responsibility should, not surprisingly, rest with someone well acquainted with the Internet.

In search of…

There are thousands of Web development companies out there. Some will design, some will implement others’ designs, some will maintain and manage, and some will cover any two or all of these services. But many experts say you should look for a vendor that has worked with catalogers. When National Business Furniture was seeking to outsource the development of its Website, it was “important to work with someone who understood catalogs, understood their graphical nature, and understood the company’s procedures,” Anderson says.

“There’s no substitute for a provider that has experience with another catalog company,” Schell agrees. The needs of a catalog business are distinct from those of brick-and-mortar retailers or other types of marketers.

Even the smartest and most experienced people in your company are unlikely to anticipate every Web-related issue that might come up. But a Web developer with catalog experience might have come across these issues before and have a solution or, failing that, may at least recognize an issue for what it is, and know enough to consult with you about it. Conversely, a supplier unfamiliar with cataloging may end up making what it considers a minor decision that ultimately undermines your objectives.

A good way to begin searching for a vendor with experience is to visit other catalog companies’ sites and find those that are similar to your ideal site. Then find a supplier that can replicate what you like about those sites — or better yet, find the companies that built those sites. Whichever vendors you identify, Schell says, “they should have three to five sites, minimum, that have designs that you like and features that you think would be good to have.”

The big screen

Once you’ve identified some potential service providers, interview them carefully. “There are people everywhere who can [build and maintain Websites] in any city,” notes Anderson. “It’s a process of asking around, interviewing people, looking at the sites they’ve built, looking for good chemistry. And do an RFP.”

A good RFP (request for proposal) informs potential vendors of your needs. It should include strategic and tactical goals, a thorough description of the systems you have in place, a detailed plan for the functionality you desire, and performance objectives. This serves your primary goal of eliciting a comprehensive and accurate proposal from prospective suppliers.

In their responses, the vendors should describe how they expect to satisfy your immediate needs and ultimate goals. They should include a precise discussion of the equipment they intend to use, how they will integrate new hardware and software with your existing systems, how quickly they can do the work for you, how many people they have on staff to do the work, and how much all of that will cost.

“Many catalogers will not go through that process,” notes Schell, “but they just end up doing it anyway after signing a contract with someone.” In the meantime, they have relinquished control of the partnership and of their site.

As an adjunct to the RFP process, sit down with prospective vendors, and ask them to offer advice on your plans. Their suggestions should give you a good sense of whether they understand the special requirements of catalog companies in general and your company specifically.

If you do identify a vendor that’s done work with catalog companies in the past, find out if the people who built those sites are still employed by the vendor. If so, will they be available to work on your site? (They could be occupied with another client or have moved into a management position.) Also determine if the vendors did all the work on the sites for which they’re claiming credit, double-checking with the vendors’ clients, if possible.

Look beyond the task at hand. For instance, if the vendor is known for its site designs, can it follow up by implementing the design? If the supplier suggests a place to put an interactive feature, will it be able to write the software to make that feature functional? After the site is designed and implemented, will you need the vendor to support and maintain the site? If so, will the vendor assume responsibility for updating information? Can it assume responsibility for ensuring that the site is operational? If so, will it assume responsibility for ensuring that the site is operational only during business hours, or will it do so 24 hours a day/seven days a week?

“Before you sign a contract,” Schell says, “ask the vendor, ‘Give us a half-dozen examples of things that came up with previous clients concerning front-end and back-end integration.’” You might learn about something you previously hadn’t considered. Just as important, you will get some insight into the resourcefulness of the vendor. “Whomever you choose,” Schell says, “problems will come up, and you want your provider to be a good problem-solver.”

Schell offers two other points of caution: “Definitely do not let bargain-basement prices tempt you,” and don’t reengineer your system and update your Website at the same time. “When starting two major projects, the chance of synching them is zero.”

front-end/back-end integration

It makes intuitive sense to integrate your front-end systems with your back-end systems, but depending on your company’s needs, it may not make sense to integrate everything all at once.

When apparel and home goods cataloger Lands’ End launched its site in 1995, it decided to start integrating almost immediately. “It was critical that all the knowledge we gained over the past 20 or 30 years be available on the Internet,” recalls e-commerce marketing manager Terry Nelson. “The customer is in control, and you don’t know when the customer is going to want to ask, ‘What colors does that come in?’ or ‘Can I get a swatch?’”

Office furniture cataloger National Business Furniture took the slow and steady approach, integrating one system at a time. For example, “we’re just now making it so that we don’t have to key in an order twice,” says chief operating officer Kent Anderson.

Most companies view keying in something twice as just another opportunity to introduce human error. But for National Business Furniture, reentering information is also an opportunity to catch errors made by customers. A high school might place an order for hundreds of desks with a 14-inch chair for each. A computer will just put that order through, while a human order-taker will know that 14-inch chairs are much too small for high school students.

“It’s not like we’re selling $20 polo shirts; we’re selling $1,000 desks, so we could afford to key things in twice,” Anderson says. Ultimately, though, he adds, the advantages of streamlining and simplifying operations finally outweighed the potential disadvantage of eliminating the step of reentering the data.

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