Nisbets Case Study 2010

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This presentation is a case study on an external piece of analysis conducted by the author for Nisbets on an approach to select an ecommerce platform and how to manage an ecommerce channel.

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Nisbets Case Study 2010

  1. 1. eCommerce Platform selection & Managing an eCommerce team Jan 4 th Saj Bhojani
  2. 2. Platform selection is about technology but needs to deliver revenue, reduction in costs and enhanced branding via customer proximity
  3. 3. Customer, business and technical requirements are the starting point – these need to be agreed at a high level to enable selection http://www.youtube.com/watch?v=Ek7bdR_SCyY
  4. 4. <ul><li>What is right for Nisbets? </li></ul><ul><ul><li>A hosted, on demand service or packaged application? </li></ul></ul><ul><ul><li>How much customisation is required and who is going to make the customisation? </li></ul></ul><ul><ul><li>What level of support will be needed to manage the technology on an ongoing basis? </li></ul></ul><ul><li>Have you thought about what the customer wants? </li></ul><ul><ul><li>Do Nisbets really understand what your customers really want online? (Not what staff want) </li></ul></ul><ul><ul><li>Are all stakeholders feeding into the ecommerce strategy ensuring an integrated approach </li></ul></ul><ul><ul><li>Are the suppliers on the ball when it comes to usability and accessibility </li></ul></ul><ul><li>Have you planned for tomorrow and not just today? </li></ul><ul><ul><li>Solution needs to be scalable </li></ul></ul><ul><ul><li>Platform should be easily integrated into other business areas eg CRM, product content, call centre </li></ul></ul><ul><ul><li>How efficient is the technology and how future proof. Are there features you don’t require from Day 1? </li></ul></ul><ul><li>Have you thoroughly assessed the pedigree of the vendor/agency? </li></ul><ul><ul><li>Which clients do your prospective suppliers have? Are they happy? Have you spoken to them? </li></ul></ul><ul><ul><li>How flexible will the vendor/agency be in meeting your needs? </li></ul></ul><ul><ul><li>If you are using an agency – how strong is there project management ensuring delivery on time/budget </li></ul></ul>Choosing the right platform….. They are all different and all have USP’s – but which is the most suitable?
  5. 5. Once you have agreed intent with sponsors and high level direction– the analyst community can usually point you in the right direction
  6. 6. Use your shortlisted few to tear the competition apart – they know the competitions weaknesses better than anyone! TRU was migrated from Snow Valley (based on MS Commerce 2007) to hybris in 2008 Coca Cola initially decided to go with MS Commerce but found out that it does not fullfil their needs and hence moved over to hybris.
  7. 7. There is nothing like driving the car before you buy it….why not have your techies lift up the bonnet and give it the once over
  8. 8. MOVEX The eComm platform is part of the jigsaw and needs to integrate with the channel e.g. email, affiliates, BI and back office as key areas
  9. 9. Your site is only as good as the search experience - integration with platform, merchandising, analytics and product information is key
  10. 10. When things go wrong – you want to be able to escalate & ensure your views are heard at a senior level including platform roadmap
  11. 11. Web sites do not exist in isolation those that are successful are business & sales channel’s NOT technical playground’s
  12. 12. <ul><li>Platform selection summary </li></ul><ul><li>Define your intent = Planes, trains or automobiles </li></ul><ul><li>Define your requirements, specify what's right for your customers and your business NOT what you think they want </li></ul><ul><li>Don’t reinvent the wheel (talk to the guys in the know) </li></ul><ul><li>Remember you are buying more than just technology (you can test drive software), its people and service as well as the future roadmap </li></ul><ul><li>The eCommerce platform is just part of the channel jigsaw and not the only consideration </li></ul><ul><li>Internet trading is a sales channel NOT a technical playground – don’t get caught up in the technology sale or the latest gizmo </li></ul>Platform selection is driven by many factors, choice should be made with a scorecard based on stakeholder priorities
  13. 14. <ul><li>Appendix 1 </li></ul><ul><ul><li>Commerce server vs hybris </li></ul></ul>
  14. 15. The analyst community can usually point you in the right direction
  15. 16. What the experts say about hybris…..
  16. 17. What the experts say about Microsoft Commerce…..
  17. 18. <ul><li>The software can only be run on its own operating system: Windows 2000 Server and Windows XP. </li></ul><ul><li>There are limitations to the selection options for add-on components: the only database that can be utilized is the Microsoft SQL Server, Microsoft’s CMS is the recommended content management systems and Microsoft Developer Studio should be used for development purposes. </li></ul><ul><li>Only IIS can be implemented as a webserver. The utilization of .NET und COM+ provie that the lastest tehnologies are utilized and supported. </li></ul><ul><li>Conclusion: the Microsoft Commerce Server is less suitable for heterogenous e-commerce environments and should be utilized when Microsoft technology is already in use. </li></ul><ul><li>Price: the initial costs are relatively low. However, as additional Microsoft products are needed to meet the required targets, the low license price must be relativized . </li></ul>Magnius are a MCS partner and ONLY SELL MCS – those that are agnostic have their own views <ul><li>The hybris E-Business Plattform was developed and launched by hybris AG to offer a flexible basic technology for all types of e-business applications. Two e-commerce product lines: hybris shop and the hybris E-Business Plattform (higher flexibility, newer technology). </li></ul><ul><li>The hybris E-Business Platform is the next-generation follow-on from hybris jakarta. By utilizing state-of-the-art technologies such as J2EE, XML and EJB, and providing extensive functionality, the current version enables custom-built solutions to be generated rapidly and effectively. </li></ul><ul><li>Programming takes place using a Java API (JaLo). Product and order data can be administrated using either an HTML frontend (WebMC), a Java client (JMC) or an individual application interface as required. </li></ul><ul><li>Java provides greater platform independency and allows company-specific components and interfaces to be integrated flexibly. </li></ul><ul><li>In E-Business Platform 2.0, the Clustering functionality has been optimized and extended significantly. Together with the JaLo Caching, this added functionality provides a new version is a high-performance solution designed to address and meet corporate needs. </li></ul>
  18. 19. Social networks can often also direct you in the right path or at least help you shortlist and cut out the dogs
  19. 20. <ul><ul><li>hybris replace MS Commerce Server @ </li></ul></ul><ul><ul><li>hybris won the following customers against Microsoft </li></ul></ul>Commerce Server Replacements and hybris wins – hybris are increasing their market share in the UK with USA next
  20. 21. <ul><ul><li>Massive advantages in performance and scaleability </li></ul></ul><ul><ul><li>Broader out-of-the-box functionality </li></ul></ul><ul><ul><li>Shorter release cycles and faster product evolvement </li></ul></ul><ul><li>Performance </li></ul><ul><li>1 multi-tenant system for all brand stores worldwide </li></ul><ul><li>Scaleable and easy to maintain JEE architecture </li></ul><ul><li>Software more flexible to extend. </li></ul><ul><li>A direct customer feedback from Puma can be arranged via hybris who migrated from MCS to hybris </li></ul>Reasons why hybris may be a more up to date, flexible and more powerful solution
  21. 22. <ul><li>Technical Products </li></ul><ul><ul><li>hybris offers functionality like funnel search, classification systems, guided selling, product comparisions. </li></ul></ul><ul><li>Merchandising and Marketing </li></ul><ul><ul><li>hybris offers automatic product recommendations based on Collaborative Filtering technology </li></ul></ul><ul><ul><li>hybris offers store pages perfectly optimized for search engines </li></ul></ul><ul><ul><li>hybris offers full blown voucher and discount functionality </li></ul></ul><ul><ul><li>hybris offers integrated e-mail marketing </li></ul></ul><ul><li>Staging / Versioning </li></ul><ul><ul><li>hybris offers very fine-grained staging of (sub-) assortments, MS Commerce only coarse grained for whole catalogs </li></ul></ul><ul><ul><li>hybris offers „what-if“-preview on not yet public assortments / content in the store </li></ul></ul><ul><li>B2B </li></ul><ul><ul><li>hybris offers intetgration into B2B customers‘ IT systems </li></ul></ul><ul><ul><ul><li>e.g. OCI Interface to buyer‘s procurement systems </li></ul></ul></ul><ul><ul><ul><li>or via electronic catalog exchange </li></ul></ul></ul>Potential function that is lacking in MCS
  22. 23. <ul><li>Microsoft hands Commerce Server over to Cactus Commerce </li></ul><ul><li>  A blockbuster deal worth &quot;tens of millions&quot; of dollars was signed between Microsoft and Cactus Commerce < http://www.cactuscommerce.com/ > . Microsoft agreed to hand over the lions share of Commerce Server to Cactus. </li></ul><ul><li>  OTTAWA, ON, CANADA — August 8, 2007 — Cactus Commerce, a software and services company, today announced it has signed an agreement with Microsoft Corporation to drive product development, partner ecosystem development, marketing, services and support of the Commerce Server platform. The press release sounds very optimistic but the fact is that cactus is now in charge of all further development of MS Commerce. </li></ul><ul><li>Commerce is no Microsoft product anymore. Microsoft told its partners that they are planning to build a new product in the next 18 to 24 months. </li></ul>Is MCS really Microsoft and do you get what you expect from a Bill Gates product – not anymore????
  23. 24. <ul><li>MSCS is by far not as customizable as hybris. In MSCS only rigid business objects exist, that cannot be extended or modified. MS recommends to code newly created business objects in C++ (Can you hear the developers‘ outcry?) </li></ul><ul><li>Personalisation only works on catalog level in MSCS. In hybris one can personalise a lot more fine grained for each not in the category tree In addition the same product can be presented with different attributes to different customers in hybris. </li></ul><ul><li>MSCS doesn‘t support as powerful search functionality as hybris (e.g. no fault tolerant search, no phonetic search, no type-based search) </li></ul><ul><li>MSCS supports no classification systems (like e.g. E-Class) </li></ul><ul><li>MSCS only runs on Windows. Thus no support for servers systems with attractive TCO (e.g. Linux) or for those with proven high availability and robustness (e.g. Solaris). </li></ul><ul><li>MSCS only supports MS-SQL Server database. Low cost (MySQL) or high performance DBs (Oracle) are not supported. </li></ul><ul><li>MSCS has no MAM integration as well as no Web 2.0 features such as Reviews </li></ul>Additional differences
  24. 25. Both products have very new releases titled 2009 and version 4.0 – these need evaluation against requirements…….
  25. 27. <ul><li>How significant is ecommerce within Nisbets? </li></ul><ul><ul><li>How important is it? </li></ul></ul><ul><li>What is the potential for capability improvement? </li></ul><ul><ul><li>How large is the potential to improve in areas such as site visitor acquisition? Or Conversion to action? Or Customer Retention? </li></ul></ul><ul><li>How is ecommerce located and controlled? </li></ul><ul><ul><li>Does the organisation allow eCommerce to flourish at pace? </li></ul></ul><ul><li>How do you plan for eCommerce today? </li></ul><ul><ul><li>Does the business have a formal eCommerce strategy and an annual business plan </li></ul></ul><ul><li>What are the challenges eCommerce faces within Nisbets and the catering market? </li></ul><ul><ul><li>How available is the IT resource required? How do other functions perceive and support eCommerce eg call centre and catalogue team? </li></ul></ul><ul><li>How much do you spend on eCommerce (what about competitors?) </li></ul><ul><ul><li>It is estimated that mature eCommerce organisations spend more than 20% of their total communications budget via eCommerce </li></ul></ul>Building a first class team takes time, learning and listening is what is needed in the first instance – I prefer evolution over revolution
  26. 28. <ul><li>How significant is ecommerce within Nisbets? </li></ul><ul><ul><li>How important is it? </li></ul></ul><ul><li>What is the potential for capability improvement? </li></ul><ul><ul><li>How large is the potential to improve in areas such as site visitor acquisition? Or Conversion to action? Or Customer Retention? </li></ul></ul><ul><li>How is ecommerce located and controlled? </li></ul><ul><ul><li>Does the organisation allow eCommerce to flourish at pace? </li></ul></ul><ul><li>How do you plan for eCommerce today? </li></ul><ul><ul><li>Does the business have a formal eCommerce strategy and an annual business plan </li></ul></ul><ul><li>What are the challenges eCommerce faces within Nisbets and the catering market? </li></ul><ul><ul><li>How available is the IT resource required? How do other functions perceive and support eCommerce eg call centre and catalogue team? </li></ul></ul><ul><li>How much do you spend on eCommerce (what about competitors?) </li></ul><ul><ul><li>It is estimated that mature eCommerce organisations spend more than 20% of their total communications budget via eCommerce </li></ul></ul>Building a first class team takes time – learning and listening is what is needed in the first instance
  27. 29. <ul><li>Balance resources between acquisition, proposition development/conversion and retention </li></ul><ul><ul><li>Less mature organisations tend to focus on online customer acquisition and conversion, deferring more profitable initiatives to drive retention and growth </li></ul></ul><ul><li>Allocate sufficient organisational resources to customer insight </li></ul><ul><ul><li>E-CRM initiatives can include customer data quality, customer loyalty and response analysis, touch strategy definition and email marketing. Less mature companies do not manage the mix whilst web site efficiency and effectiveness often lost in the haze </li></ul></ul><ul><li>Create an eCommerce strategy and detailed E-marketing plans to provide focus and direction </li></ul><ul><ul><li>Structured planning is a common issue in unsophisticated eCommerce adopters this also includes integration with product, price and traditional sales & marketing teams </li></ul></ul><ul><li>Achieve senior level sponsorship and involvement in planning and review </li></ul><ul><ul><li>Changing an organisation to be come eCommerce led is a change management initiative – thus essential to have senior level sponsorship of the project and this should extend to active participation in planning and review ensuring eCommerce objectives and resources are aligned to business objectives </li></ul></ul>There is best practise that should not be ignored implementing this can take time but some areas can be quicker than others
  28. 30. <ul><li>The culture needs to be </li></ul><ul><ul><li>Can Do </li></ul></ul><ul><ul><li>Learn by doing </li></ul></ul><ul><ul><li>Specialist </li></ul></ul><ul><ul><li>Dynamic </li></ul></ul><ul><ul><li>High paced </li></ul></ul><ul><ul><li>Customer orientated </li></ul></ul><ul><ul><li>Sales focused </li></ul></ul><ul><ul><li>Nurturing </li></ul></ul><ul><ul><li>FUN!!! </li></ul></ul>Culture is key to the success of an eCommerce team, but it need protection and nurturing just like any business development
  29. 31. To create a culture you need an ENIVORNMENT where technicians and creatives can excel – a culture that will attract and retain talent
  30. 32. eComm needs to manage multi disciplinary skills – developers to creative marketers to data analysts & web designers
  31. 33. Common principles apply to the team irrespective of job function – direction & roles must always be clear <ul><li>Team needs to have a desire to drive to the next sales target or development evolution, breaking through goals and achieving more quicker. </li></ul><ul><li>Secondly, the team members need to be </li></ul><ul><ul><li>Passionate in their own areas (usability or software development) </li></ul></ul><ul><ul><li>Strong communicators </li></ul></ul><ul><ul><li>Evident learners </li></ul></ul><ul><ul><li>Solid problem solvers </li></ul></ul><ul><ul><li>Customer driven </li></ul></ul><ul><ul><li>Risk takers </li></ul></ul><ul><ul><li>Entrepreneurial </li></ul></ul>
  32. 34. Management of eComm consists of 4 operational processes; thought needed in terms of organisation, outsourcing & automation Acquisition Search engine optimisation Pay per click search Partnerships/Affiliates Online ads/Sponsorship Email Marketing Online PR Offline Campaigns Conversion and Proposition Development Proposition development Content creation Content management Merchandising Site usability & accessibility Design and development Customer service Retention & Growth Proposition development Outbound communications Email marketing Customer management Touch strategy definition Loyalty programme Personalisation Infrastructure & Insight Application management Vendor selection & management Design guidelines Operating procedures Performance improvement Web analytics Technological innovation Quality assurance and lifecycle management
  33. 35. <ul><ul><li>Company was recently acquired, as part of inevitable change new CEO suggested online channel to be folded into marketing…………. </li></ul></ul><ul><ul><li>Eventual outcome was .com team stayed a separate department within a company with deep catalogue roots </li></ul></ul><ul><ul><li>After thinking about it, it has to be,” says CEO Mike Muoio. “It is so different. There are so many things that are web-specific, and so many functions have to be managed that are external to the traditional distribution of catalogs.” </li></ul></ul><ul><ul><li>“ Because of that (decision to keep .com separate), we can turn on a dime. We can react to trends and catch the wave when we see it happen. The catalogue group, because of the nature of catalogues, works at a very different pace, and they work much farther ahead. It’s just a different mentality,” says Montella (eCommerce director) </li></ul></ul><ul><ul><li>50% of sales now come online, however Montella notes that most web sales are catalogue-driven and estimates only 20% of online sales volume is incremental. “There would be no web site without the catalogue,” she says. </li></ul></ul><ul><ul><li>Montella team are fully integrated with the business providing customer data uniquely available on the web that affects other departments as well </li></ul></ul><ul><ul><li>An example of integrating the online channel tightly with the rest of operations, even though e-commerce remains a separate unit. </li></ul></ul>As the channel grows so does the job – according to size, vision, talent & heritage. Case study
  34. 36. <ul><ul><li>4 retail stores but saw internet as key to success – recruited vice president for ecommerce responsible for site and online marketing </li></ul></ul><ul><ul><li>“ The aha moment was when we realized there are really two distinct jobs we want done. We want to bring people to the site, then when they get there we want them to have a great experience and buy,” explains CEO Noah Wrubel . </li></ul></ul><ul><ul><li>After splitting up the two job functions, Bare Necessities hired its first dedicated vice president of e-commerce, objective being to role to optimize the site experience for shoppers once they arrive . While the original vice president, now vice president of Internet marketing and new business development, now focuses on driving traffic to the site </li></ul></ul><ul><ul><li>With what it says is 60% annual growth since 1998, Bare Necessities had reached the point in its evolution online at which it needed to split those jobs. </li></ul></ul>Splitting eCommerce functions is an increasingly growing trend that lends itself to customer proximity Case study
  35. 37. <ul><ul><li>“ It was the place we were going to put everything that didn’t sell on TV,” says James Thome, vice president of e-commerce at Jewelry Television. “It didn’t have its own P&L, didn’t have its own budget or revenue goals. It was more of an afterthought.” </li></ul></ul><ul><ul><li>Thome was brought in as the company’s first e-commerce vice president and told by top management it was looking to double the Internet business. So the first thing Thome did was to restructure his entire department. </li></ul></ul><ul><ul><li>The e-commerce function had been supervised by a director of e-commerce who had oversight for a merchandising group and a design group. Thome determined that structure couldn’t support the accelerated channel growth the company was seeking. “There was diffused accountability and responsibility. We needed to have very clear lines of accountability so we could be very efficient” </li></ul></ul><ul><ul><li>Thome is responsible for day-to-day operations as well as future strategy of the company’s online businesses. He grew the online team of 20 to about 30. </li></ul></ul><ul><ul><li>He divided it into six functional areas: e-marketing, e-merchandising, web and design services, project management, product management, and business intelligence (a combination of web and database analytics). </li></ul></ul><ul><ul><li>The director of e-commerce now has responsibility in the first three areas; a second director reports to Thome with responsibility for the rest. </li></ul></ul>Case study Organisational change is needed to accelerate growth
  36. 38. Generally 4 locations/models for eCommerce within an organisation according to eConsultancy
  37. 39. The customer lifecycle approach is marketing focused, but infrastructure is missing and would be an IT responsibility
  38. 40. The functional eCommerce team lacks explicit focus on customer lifecycle but includes the IT element
  39. 41. Recommendation is a hybrid of both models but customer lifecycle based in structure Source:econsultancy
  40. 42. Management of eComm would consist of 4 operational processes; consideration required in terms of outsourcing & automation Acquisition Search engine optimisation Pay per click search Partnerships/Affiliates Online ads/Sponsorship Email Marketing Online PR Offline Campaigns Conversion and Proposition Development Proposition development Content creation Content management Merchandising Site usability & accessibility Design and development Customer service Retention & Growth Proposition development Outbound communications Email marketing Customer management Touch strategy definition Loyalty programme Personalisation Infrastructure & Insight Application management Vendor selection & management Design guidelines Operating procedures Performance improvement Web analytics Technological innovation Quality assurance and lifecycle management
  41. 43. <ul><ul><li>Managing senior management </li></ul></ul><ul><ul><ul><li>Ensuring strategic importance </li></ul></ul></ul><ul><ul><li>Working with the marketing/commercial team </li></ul></ul><ul><ul><ul><li>Collaboration is key with defined responsibilities needed for eCommerce within traditional teams </li></ul></ul></ul><ul><ul><ul><li>Achieving coordinated approaches across the organisation with bespoke areas and sharing experiences good or bas e.g. call centre </li></ul></ul></ul><ul><ul><ul><li>Managing the timing of online campaigns and the integration with offline campaigns </li></ul></ul></ul><ul><ul><li>Information Technology/Infrastructure </li></ul></ul><ul><ul><ul><li>Often insufficient resources allocated to application development limit the potential eCommerce value </li></ul></ul></ul><ul><ul><ul><li>Gaining IT resource and technical support </li></ul></ul></ul><ul><ul><ul><li>Technical challenges of selecting and implementing new vendor solutions </li></ul></ul></ul><ul><ul><li>Talent pool is limited </li></ul></ul><ul><ul><ul><li>Recruitment of permanent staff </li></ul></ul></ul><ul><ul><ul><li>Finding suitable agencies </li></ul></ul></ul><ul><ul><li>Pace of change and innovation </li></ul></ul><ul><ul><ul><li>Insufficient time to learn about new initiatives and the difficulty in assessing their likely effectiveness </li></ul></ul></ul><ul><ul><li>Legal compliance </li></ul></ul><ul><ul><ul><li>Resources can be allocated with little ROI </li></ul></ul></ul>Managing eCommerce consists of various challenge
  42. 44. <ul><li>Identify a single sponsor </li></ul><ul><ul><li>(preferably Managing Director /Chairman /Marketing Director </li></ul></ul><ul><li>Ensure board is involved in eCommerce strategy & regular objective setting </li></ul><ul><ul><li>e.g. eCommerce forum held every quarter </li></ul></ul><ul><li>Cascade down at every opportunity to both eCommerce & Marketing teams </li></ul><ul><ul><li>Weekly scrum meeting </li></ul></ul><ul><ul><li>Include targets </li></ul></ul><ul><ul><li>Weekly sales vs forecast </li></ul></ul><ul><ul><li>eCommerce targets are cornerstones of teams personal performance and bonus </li></ul></ul><ul><li>Alignment of marketing and digital teams </li></ul><ul><ul><li>Collaborative objective setting </li></ul></ul><ul><ul><li>Shared budget responsibilities </li></ul></ul><ul><ul><li>Co location of staff </li></ul></ul><ul><ul><li>Job swapping </li></ul></ul><ul><ul><li>Combined planning sessions </li></ul></ul><ul><li>Talent management programme </li></ul><ul><ul><li>Internal </li></ul></ul><ul><ul><li>External </li></ul></ul>Experience suggests there is a way…..
  43. 45. Clearly you need a special recipe to be able to manage a diverse and ever changing area…..the right mix of ingredients? A great communicator & influencer A marketing & business background Team & Project Management Technically able to work with IT & not get stonewalled An affinity with technology – a fast follower Tenacious Customer proximity Desire to drive sales – entrepreneurial flair Reactive, nimble & able to make quick decisions & implement quickly Strategic

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