Multichannel sellers invest in e-commerce
1-800-Flowers.com is integrating the e-commerce operations for its 14 brands, which had operated as siloed systems, on one platform from IBM WebSphere Commerce, with an eye toward driving efficiency and enhancing the sites.
“We realized we weren't going to grow if we didn't address [the lack of integration],” said Duke Marr, VP, e-commerce product management at 1-800-Flowers.com. This is “a long-term investment” in the health of the company, he added.
While there are nearly daily reports of multichannel merchants cutting back on staff and capital expenditures, Web-based multichannel retailing infrastructure is one area where investments are still being made.
“Multichannel merchants are saying, ‘I really need to invest in the online experience so that I can take care of current customers, improve operations and save money,'” said Suzy Meriwether, retail industry manager at on- demand CRM service provider RightNow Technologies.
The strength of this market is reflected in the financial results of some of the service providers. Art Technology Group Inc. last week reported its fourth-quarter revenue grew by 14% for a total of $45.4 million as it signed eight new clients for ATG commerce services. RightNow Technologies, also reported last week that its Q4 revenue grew 18% for a total of $36.1 million as it added 59 new customers.
Drugstore.com signed with RightNow in the third quarter of last year to begin offering live chat on its Beauty.com Web site and, based on the success of the program, is now rolling out the service to its other brands, including Drugstore.com and VisionDirect.com. The chats are also available from Twitter.
“Our goal is to provide customers the contact options they want,” said Lisa Larson, director of customer care at Drugstore.com.
On Beauty.com, beauty consultants are trained in the various lines and focus on helping customers find the right products. The conversion rate is on average 25%, but reaches closer to 40% during promotions.
Chats are proving to be a useful way for Drugstore.com to learn more about its customers. There is a tool for viewing individual chats and matching them to a subsequent order. The company also is watching to see if chat customers are more likely to return to the site.
“We know that we are building a loyalty base,” said Larson.
For its part, 1-800-Flowers.com sees the new platform as an opportunity to enhance its sites with new features, such as social media or improved search engine optimization, and only have to do it once. The integrated platform also will enable the retailer to standardize its promotions.
“This will make it easier for our marketing teams to work together and to focus on being in the gifting business instead of being in the software business,” said Marr, adding that the company has spent a lot of time and effort on simply keeping its Web platforms going in the past and much less on enhancing them.
It isn't only retailers that see e-commerce infrastructure as a worthwhile investment in this down economy.
“I see a pickup in brands and manufacturers looking to upgrade or implement direct to consumer channels,” said Chris Martin, director of marketing at CoreSense.
Typically, these companies are looking to make sure they are out there competing with the best tools and operating more efficiently, he explained.
California's Windsor Vineyards, for example, recently upgraded its e-commerce platform with CoreSense, integrating point-of-sale and direct systems and giving the vineyard the ability to easily create targeted microsites, Martin said.