Procurement essentials 1 martin newman uk

Procurement
Essen.als:
A
blueprint
to
e-‐commerce
success
26th
September
2011

1

Agenda
• Strategic developments in e-commerce and multi
channel retail considerations for your business model

• Planning

• Challenges/issues

• Requirements gathering

• The RFP

• Supplier selection

• ROI

My deliverables today
• Insight

• Inspire
• Provoke

• Make more effective decisions
• Improve your ROI

• Reduce costs
• Have a better chance of getting live on time

• Mildly entertaining

My other involvement this week

• Tuesday: ‘Mind the gap’: Recruitment, retention
and skills issues

• Wednesday: Technology panel, fashion panel, live
site reviews

• Thursday: Website optimisation masterclass

And like Ronnie, I’ll go off on a tangent
from time to time

About us
• Practicology is about providing actionable insight delivered by people who have
done the job
• We’ve all been at the coal face: I have previously been head of e-commerce for
Ted Baker, Burberry, Harrods and Pentland brands
• We’re a full service global e-commerce and multi channel retail consultancy
• We have clients in Australia, UK, US, Malaysia, Scandinavia, Germany, Croatia,
Switzerland and Belgium
• International judge of Australia’s Online Retail Awards and Judge of Draper’s
etail awards 2011
• Run E-Commerce UK (LinkedIn.com)
• Listed in Retail Week’s top 50 ‘etail power list’

We don’t rely on our looks to earn a
living...It’s a good thing too!

What’s it like to work with us?

Denial: I don’t need any help

A client who recognises they need
some help

A relieved early engagement client

Success: A post engagement client

We don’t take ourselves too seriously
but we take your success, very seriously

You made a very good choice
coming along today

Asides from having kids, or getting married, this
could be the most important thing you ever do!

Still too much smoke and mirrors

• We took a global FMCG brand through supplier
selection

• The same brief saw us get responses from
$200k to over $3m!

Everything I tell you today, I’ve been through myself
more than 25 times as a client and a consultant

E-‐Commerce:
Current
situa1on

Take ﬁgures with a pinch of salt

By 2019 online will deliver more
growth than ofﬂine retail (UK)

•During 2010, shoppers have spent $10 to $12bn
online, about 5% of total retail sales of $250bn.
[Source: SMH.com, January 2011]

•It’s predicted that spending online will grow to
$18bn by 2014
[Source: Frost & Sullivan, via SMH.com, Jan 2011]

•I’ve also read that current sales online are more
than $20bn!

94% of the Australian population access the internet,
79% do so every day.
[Source: AIMIA / Sensis Social Media Report, May 2011]

Broadband web usage at home
is driving adoption

Home is the no’s 1 place to access the
web, but mobile will be the driver soon

Key online activities...with one
obvious omission!

Fashion, followed by Electrical goods are the most
researched products or services on social networking sites

36% of Australians made a purchase after
researching products via social media.

57% of Australians search the internet for
something to buy at least once a week and more
than half buy something online every month
[Source: Digital Futures 2010, CCi, May 2010]

44% of online purchases are
made to overseas retailers

The combination of no GST, and the high dollar
are challenging and leading to a retail war
on 2 fronts

With ever-increasing competition from
International retailers on and ofﬂine...

Lulu Lemon’s ﬁrst online localised proposition
outside of North America will be in
Australia...and they’re opening more stores here

These guys want to eat your lunch!

And now they’ve opened an Australian site,
they also want the roof from over your head!

They’re taking £1m a week in online
sales from Australia!

I’ve seen big changes in the last year
in Australian online retailing

You’ve got a lot to be proud
of...some great innovation

Augmented Reality:Virtual mirror

Customisation
(Shoes of Prey were there ﬁrst)

But some of your retailer’s are still
well behind the curve

Keep your eye on the ball...
the pace of change is frightening!

The big changes (This month!)
• Retailers no longer hold the power
• Consumers choose the channel of engagement
• And they expect a seamless experience through all channels
• So retailers must make the move from ‘multiple channel’ to ‘cross
channel’
• Consumers are inﬂuenced by their peers, not by the retailer
• FMCG and CPG players looking to have a direct to consumer play to
drive insight and sales
• Mobile is THE game changer
• Social Media is a service and engagement driver
• Internationalisation is all the rage...but localisation is required
• The gap between buying ofﬂine and online continues to narrow

The web has evolved....largely driven by
broadband, wireless and more usable devices

Drivers of growth
• The drivers for continued growth of sales online will be:
• Increasing broadband penetration
• Emerging International markets maturing
• Ever – increasing media consumption online
• Social networking and social commerce
• Smartphone penetration fuelling mobile Internet adoption
• The alignment of online and ofﬂine shopping experiences
• The convergence of technology....TV/Web
• Convenience of the shopping experience...driven by cross channel
• Online propositions localised for the needs of the local market

Deﬁne
Requirements:
Strategic
Developments

You
Need
To
Plan
For

Because if you don’t, you’re going to
lose market share

In any case, you need to plan for
tomorrow, not just today

• 75%
of
Australians
using
GPS
devices
are
open
to

viewing
targeted
deals
when
visi.ng
bricks
and

mortar
outlets
• 41%
of
Australians
using
GPS
devices
are
open
to

viewing
targeted
deals
at
.mes
they
select
• 83%
of
18-‐34
year
old
Australians
ﬁnd
geo-‐
targeted
content
via
mobile
when
shopping
an

appealing
prospect

• [Source:
Galaxy
Research,
via
DMI,
June
2011]

61

The majority of Australians have not bought using
mobile...but that will change very soon
Payment for goods and services purchased via mobile handset
(Source: Australian Mobile Phone Lifestyle Index, AIMIA, October 2010)

The HIPPO says ‘let’s have an iphone
or an ipad app

All too often mobile is still a
very tactical scenario

But it is
driving ‘buyability’

Mobile
=
THE
game
changer!

M-‐commerce In-‐store
naviga.on
Development
of
mobile
websites
Mobile
ac*ng
as
in-‐store

and
apps
which
make
shopping
‘sat
nav’
for
shoppers
with
advice

online
more
seamless
for
shoppers on
where
to
find
par*cular

products
or
offers
in-‐store

Barcode
scanning/Image
Proximity
marke.ng
recogni.on Retailers
can
leverage
loca*on-‐
Tools
which
allow
shoppers
to
add
based
marke*ng
offers
through

items
to
their
online
basket
by
mobile
scanning
items
in
the
home
e.g.

Tesco’s
grocery
app

• 15% of Ocado’s sales during H1
2011 came from its smartphone app
• Debenhams took £1m through their
iPhone app in the ﬁrst 6 months
• River Island will take over £2m this
year through their app

Supermarkets in Asia leading
the way with pop ups

Developments in Asia lead the way

-‐
Over
500
of
its
most
popular
products,
complete
with
QR
codes

which
can
be
scanned
using
the
Homeplus
app
-‐
Products
range
from
daily
essen.als
such
as
milk
and
fresh

produce,
to
pet
food
and
sta.onery

-‐
Orders
placed
before
13:00
will
be
delivered
to
customers'
homes

on
the
same
day

How many retailers have a mobile
compatible website?

Mobile can be the glue to bring customer engagement
and the multi channel experience together

By 2015:
50%+ of web access through mobile

By 2020:
80% of web access will be through
mobile

So you need to build mobile
into your requirements and
your roadmap now

Mul1
Channel
Development

99% of retailers are
‘multiple channel’

Multi channel just means more than one
channel

‘Cross-channel’ is bringing together the
strengths of each channel to create a
better overall customer experience

Multi channel is not about managing
customer expectations

It’s about meeting customer
expectations

The customer chooses the channel of engagement

Today’s consumer is a multi channel shopper
Today‘s consumer is a multi-channel shopper

“Almost everyone is a multi-
channel shopper, 86%
regularly use more than one
channel”
– Leo Burnett, 2010 Multichannel customer research

Multi channel proposition on the PDP

The way we communicate has fundamentally
changed

The purchase path is no longer linear
Presales Information Product Availability Assistance Trans-action
Channels

Print

TV/Radio

Store

Internet

Letter

E-Mail

Telephone

Fax

SMS/MMS

Usage of channel Channel combination example of multichannel customers

• 63% research online before buying instore
• 89% who buy online also shop instore

• 20% of all online customers pick up their goods instore

• 29% researched ofﬂine before buying online
• Multi channel customers spent 3.5 times as much as single channel customers

• ‘Shop engagement is key’: Branch online orders grew by 130% in 2010

• The store is credited with the sale

• Click and collect growing at 2 x the rate of online sales
• Mobile drives 5m visits to the website

• A £3k bed was bought through mobile!
• Multi Channel Shoppers visit stores three times more frequently

• Multi Channel Customers are twice as loyal

Remember that the web is a
sales driver for all of the
retailer’s channels, and not just
a source of incremental
revenue...

•Ted’s cameras know that their website only
represents around 5% of the company's total
sales but it influences 50-60% of all sales made
through all channels.
•And it is because of this, that they realize
integration across all channels is essential to
provide a complete user experience
•Dick Smith: 23% of online order revenue now
picked up in store

13% now being picked up in store

The web is a huge driver for ofﬂine
sales

There’s too much talk about multi channel and
not enough focus on aligning the business with
the customer’s journey

Let me tell you a story...
• Casino customer journey:

• Having breakfast I realise I’m out of milk and cornﬂakes so
I order them on my iPad

• Then at lunch I remember I’ve forgotten to order juice for
dinner so I use my PC to do so

• On the way to the store I then remember I need wine and
I use my iPhone app to order

• In store I’m pinged a coupon offering me 50% off a
different cereal as I’m standing in the aisle looking at
cereal

• I also get a reminder on my phone that I haven’t bought

• Opticians/Optometrist customer journey

• Let’s imagine you were buying a new pair of glasses. What would be the
optimum customer journey?

• I went online using my iMac at home to make an appointment to have my
eyes tested

• I was also able to select a few brands of frames I might be interested in

• When I went into the store, the staff and the optician new who I was and
had the frames I was interested in ready

• After my test and after I had selected a new frame, I was waiting for my
glasses to be made up with the lenses when using an interactive in store
mirror I tried on different sunglasses with different tints

• I bought them and I went home

• 2 weeks later I sat on my glasses and broke them

• I opened up the glasses case as I remembered there were contact details in
there along with my customer reference

• I called the store, or maybe I went online, either way they had my
prescription to hand and they made me up a new pair of glasses in 24 hours

• So keep this in mind when you start to
deﬁne your requirements for your
e-commerce platform
• If you’re a multi channel business, what
might the optimal customer journey
be?

The number one driver for
customer’s is ‘convenience’ and the
other driver is ‘immediacy’

The optimal customer
convenience proposition
• Buy from the channel of choice: Online, in
store, by phone

• Return to the channel of choice…free

• Have your order delivered to the place of
choice: Work, home, your store for pick up

• Have the order fulﬁlled at a time of their
choosing

• Have your order gift wrapped with a gift card

• You
can’t
aﬀord
to
only
look
inwardly
• You
need
to
extend
your
reach
and
take
market

share
from
new
markets

103

What’s the size of the prize?

This will bring a tear to your eye

•B2C e-commerce worth €591bn in 2010
•Up 25% from 2009
•Between 2009 and 2013, global e-commerce
sales will more than double!
•Source: IMR World

Top 10 Countries
source: IMR World

The mature e-commerce markets in the
US & UK will grow annually by 15% to
20% over the coming years
(Source: IMR World)

It’s a small world isn’t it?

“Yes, but a successful Internationalisation strategy is more
than just language translation and currency conversion”

4 strategies in play
1. Do nothing: Don’t allow anyone to buy
from overseas
2. Standardisation: Switch on the buy button
only
3. Adaptation: Localise some aspects
4. Localisation: Fully localise the customer
proposition

Some of us ﬁnd it hard enough
selling domestically

Yes lot’s of us aren’t doing it at all

In the UK, 42% of us haven’t even switched on
the buy button!
Source: Snow Valley delivery report

And most of us have only switched on the buy button
and not localised the proposition = standardisation

Yet Debenhams are piloting multi
lingual placards in store!

No sign of any International
proposition

Hang on, here we go...
deeply hidden within delivery info

Adaptation = localise some aspects

But adaptation is pretty half-hearted

Currency is the only thing to have
visibly changed

Local language, payment, currency,
customer service

A pretty compelling customer
proposition

The results?
• Since launch, trafﬁc to clarks.de is 4 times higher
than previous, this includes trafﬁc generated by
PPC
• Conversion rate has grown from launch to
become very similar to the UK site
• Returns rate is much higher than the UK..again
due to German catalogue heritage
• Basket size and bounce rates are very similar on
DE to UK

NET-A-PORTER/LIVE...
Internationalisation before your eyes

You can now buy in the UK from
many leading US retailers

But they haven’t got the model quite right!
Would you pay an extra 50% to cover
additional charges?

Hey, the World speak’s English!

No they don’t:
‘Wie viel kostet dies?’

Why is it so important to give foreign
nationals a local language site?

Cross border sales are growing...but
localised propositions work best

Just ask ASOS...Free delivery worldwide!
And International sales are up 161%
43% of their sales = £140m

Cloggs take 15% of total sales through Cloggs.eu = £2.55m
With France and Germany being the biggest markets

11Cs of Internationalisation
• Country
• Customers
• Communication
• Culture
• Customer Service
• Competitors
• Currency
• Conversion
• Categories
• Content
• Costs

The United States of Europe...or is it?

If you want to know the difference
just look at Eurovision!

• Different currencies

• Different payment methods

• Different values

• Different cultures

• Different tastes

• Different fears

• Different motivations

If you haven’t localised yet....
Analyse existing web trafﬁc patterns in order
to make some informed assumptions around
the opportunity from international markets

• Trafﬁc x conversion rate x AOV = Sales
potential

Tip: Start with English
language sites

You need to meet the needs of different user groups
who go about their journey in a slightly different way

Guess what the big drivers are?

Any tool that helps self service
customer’s get in and get out quickly

Mega menu’s can take one or two
clicks away from the path to purchase

Guess what the number one driver
for German customer’s is?

34% of Germans want speed and efﬁciency:
(Source: atg e-commerce trends in Europe)

36% of Germans get annoyed by the
checkout...they’re not alone

The things that annoy customers at
the bag and the checkout...

Ted ships to Germany and they give two options and
tell me how much the total order will cost

If you are going to add on duty and other charges, make
sure you show these on the bag, not in the checkout

At the bag I should know what the total cost of
the order is, whether or not you do gift wrap and
gift message and what the delivery options are

38% of French people want
comparison shopping

New or inexperienced web users

Reassure me, let me speak to a human if
I need to! And....do you actually exist?

Difﬁculties reaching the organisation when they have
questions is the biggest frustration in France and Spain
(38%)

20% of Brits like to read peer
reviews and comments before buying

Ratings and reviews provide
conﬁdence and trust

Consumer trust in various sources of information
and media: most trusted sources
[Source: Nielsen Social Media Report, February 2010]

Key drivers for new customers and/or
inexperienced web users =
- Trust markers
- Contact number
- Your credentials
- What other people bought

What’s the customer
proposition?
• Product/range the same?

• Category hierarchy and naming the same?

• Products, colours and styles the same name?

• Americanise the English on the US site

• Cross channel experience – Enable return to
store in relevant markets?

What’s the customer
proposition?
• What currencies?

• What languages? You can probably get away with an
English language site for some EU markets such as the
Netherlands and even Scandinavia
• What payment methods? Local market debit and
credit cards as well as other options such as pay on
invoice or bill me later?

• Enable customers to place orders over the phone?
• Price positioning…same pricing?

• Cultural variances of local markets can
impact upon a number of considerations

Not the optimum image for the
middle east

ooh la la...the French prefer a bit of
theatre

In Japan, shopping represents a social activity, an
opportunity to meet friends and socialise.
Due to this social function and reluctance to use credit
cards, online shopping has struggled to really take off in
Japan whereas M-Commerce has

• And of course, each country will observe its own
public holidays and festivals:

• Basic operational issues and requirements such as the
fulﬁlment of customer orders and handling customer
service at these important times of year

Germans want to know:
‘Can I pay using ELV?’

Europeans want to know:
‘Can I pay in €?’

Scandinavians want to know:
‘Can I pay cash on delivery?’

A growing number of customers also
want to pay using PayPal

The $ is still the global currency

• Can your PSP handle all of these
requirements?

Most preferred payment methods

Top tip:
Think global - act local

Social
Media:

What’s
it
all
about?

The
term
social
media
refers
to
the
use
of
web-‐based

and
mobile
technologies
to
turn
communica*on
into

interac*ve
dialogue
and
social
interac*on
that
allow

the
crea*on
and
exchange
of
user-‐generated
content

11

The rise of customer democracy

Facebook is particularly good for
democracy!

• An
integrated
online
experience
is
now
a
key

requirement
rather
than
a
nice-‐to-‐have
• Customers
expect
to
swap
effortlessly
between

online
shopping
(e-‐commerce
plaôrms),
social

plaôrms
(such
as
Facebook)
and
related
online

touch
points

197

‘Social shopping’: ‘F-Commerce’

The jury is still out on that one in
terms of F-Commerce

However as a marketing tool it can
drive sales

2011 Forrester research conducted over a 24 month
period states:

It’s now all about ‘word of web’ as
opposed to ofﬂine word of mouth

You already do
it ofﬂine
• Meeting prospects
• Building relationships
• Asking questions
• Answering questions
• Building trust
• Building your reputation

Business investment in social media is extremely
low suggesting the approach is very tactical

Percentage of marketing budget allocated to social media
average for medium and large businesses is less than 5%!

25% of Australian medium sized businesses have a social
media presence, only 44% have a Twitter account =
That’s a lot of businesses with NO social media presence
and a lot with no Twitter presence

Who is responsible for a business’ social media presence?
= A real lack of customer service engagement through social

The
customer
chooses
the
channel

of
engagement

13

Tradi.onal
outbound
marke.ng

14

Marke.ng
today:
In
bound

15

•It is our contention that it should penetrate the whole
organization

•Social Media shouldn’t :
•Be a ‘campaign’ or a ‘tactical’ sales tool
•Nor should it only be customer facing
•Social media should :
•Embrace the internal business
•Harness the knowledge and insight available within those who
don’t always have a voice or a vehicle to impart their knowledge
through

Who has leveraged their employees
knowledge and engaged them with
social media in their business?

•Their Best Buy Connect social media platform has
the aim of showcasing their people, their culture and
with unedited perspectives, presents a transparent
picture of the business and its employees.

•It puts a truly human face on the brand, whilst
increasing accessibility and driving transparency.

•This in turn can have a tremendously positive effect
on current and future customer perceptions as well as
on current and future employees.

Social media is a service driver and
key customer retention tool

Think ‘local social’:
Growing role of social interactions within customer
shopping missions
Ability to drive footfall, advocacy and insight

Deﬁne
Requirements
For
Marrying
Brand
&
Transac1ons

It’s
a
thin
line
between
‘futurology’

and
hallucina.on

218

Case study: Kiddicare
Home page carousel

Signiﬁcant incremental sales uplift:
More than doubled (100%+) conversion on pages enabled
with 10CMS

Fits.me: Bridging the gap between the
on and ofﬂine ﬁtting room

Augmented reality is driving online
furniture sales

What are you waiting for?
Please don’t go for the ‘dip your toes approach’
You can leapfrog the competition now

Do
you
have
a
roadmap
and
a
strategy
for

e-‐commerce?

228

If
you
don’t
have
a
plan,

then
you
are
planning
to
fail

229

A Commercial Plan & Roadmap

• You need a plan for how you’re going to get
from where you are, to where you want to be

• High level will do for the key building blocks

• Show how strategy, resource/people, marketing
and technology will change over time

What
Are
The
Big

Internal
Challenges?

• There

are

many

challenges

and

issues

to

address

in

order

to

implement

successful

e-‐commerce

projects

• Projects
fail
typically

due
to

issues

on

both

the

client
and

the

supplier-‐side.

Rarely

are

they

only

caused

by

one

of

the

par.es

• From

a

client-‐side

perspec.ve,

the
organisa.ons

culture
and

people

signiﬁcantly

impact

upon

the

success

or

failure

of

an

e-‐commerce

implementa.on

234

• On

top

of

that,

many

issues

arise

from

the

lack

of

there
being
a

seasoned

e-‐commerce

prac..oner

on

the

board

• We

have

seen

many

examples

(too

many)

where

projects

fall

short

of

expecta.ons,

fail

altogether,

or

cost

much

more

than

an.cipated

235

Why
do
e-‐commerce
projects
fail?
• When
there
isn’t
an
experienced
e-‐commerce

prac**oner

on

the

board,

this

oEen

leads

to

key

decisions

being

taken

without

the

depth

of

insight

required

to

support

them.

Issues

can

include:

– SeJng

unrealis*c

expecta*ons.

Forecasts

are

too

high

and

unsubstan*ated.

Timescale

es*mates

are
too
oEen

incredibly

op*mis*c

– An

insuﬃcient

level

of

investment

in

the

development

of

the

channel

– The

structure

being

ineﬀec*ve

– The

e-‐commerce

channel

is

developed

as

a

silo

and

not

integrated

with

key

business

func*ons.

The

web

drives

visits

to

stores,

and

vice

versa.

This

should

be

factored

in

236

Why
do
e-‐commerce
projects
fail?
• A

lack

of

cross-‐func.onal

teamwork

(because

it

takes

more

than

a

head

of

e-‐commerce

to

deliver

a

successful

web

channel)
• For

the

best

results

collabora.on

must

take

place

between

the

following

opera.onal

units:

• Buying

and

Merchandising
• Marke.ng
• Supply

chain
• Fulﬁlment
• Customer

service
• In-‐store

personnel
• IT
and
development

team
237

Why
do
e-‐commerce
projects
fail?

• Involving

team

members

who

need

to

interact

with

and

be

involved

with

the

e-‐commerce

applica.on

too

late

(early

stakeholder

engagement

is

a

necessity)

• Inadequate

team

skills

(the

speed

and

level

of

growth

of

e-‐commerce
growth
has
meant
there’s

a
shortage

of

skills

across

various

remits)

• Overall

resistance

to

change...for
most
people,

change
comes
at
a
cost

238

What
can
you
do
about
it?
• Proac*ve

and

forward-‐thinking

businesses

can

prevent

many

of

these

piOalls

and

in

doing

so,

save

*me

and

money

while

crea*ng

a

smoother

transi*on

and

implementa*on

of

e-‐commerce.

• Follow

these

steps

for

the

best

results:

– Enrol

key

stakeholders

in

the

planning

phase,

including

execu*ves

who

will

input

into

the

vision

and

opera*onal

stakeholders

who

will

be

involved

day-‐to-‐day

with

suppor*ng

the

e-‐commerce

opera*on.

As

a

minimum

try

to

involve

in-‐store,

e-‐
commerce,

supply

chain,

IT

and

marke*ng

execu*ves

from

the

outset.

An

experienced

project

manager

/

business

analyst

can

play

a

crucial

role

in

making

things

happen.

– Communicate

the

benefits

of

the

channel

to

all

affected

opera*ng

units

ensuring

everyone

sees

the

benefit

to

them

and

to

the

business.

Given

the

growth

poten*al,

this

should

be

a

simple

task.

Make

everybody

aware

of

the

success

stories

in

your

industry,

and

what

a

joined-‐up

approach

can

do

for

your

business.

– Run

stakeholder

workshops

and

interviews

assessing

the

impact

e-‐commerce

will

have

on

remits

and

job

tasks,

func*ons

and

processes,

and

employee

roles

in

the

execu*on

phase.

– Develop

an

opera*onal

structure

that

maximises

the

opportunity

and

op*mised

processes

that

minimise

the

likely

impact

caused

by

the

change

e-‐commerce
brings
to

people’s
roles

239

• To

be

successful,

e-‐commerce

projects

also

require

execu.ve-‐level

sponsorship

or

senior

leader
consensus

around

the

business

need

for

the

project

• Again

the

growth

of

e-‐commerce

should

make

it

a

rela.vely

easy

task

for

project

sponsors

to

again

execu.ve

level

buy-‐in

240

• You

also

need

to

ensure

that

the

overall

business

strategy

takes

account

of

the

impact

that

e-‐commerce

has

on

all

other

channels

of

the

organisa.on

• By

demonstra.ng

the

poten.al

for

organisa.on-‐
wide

beneﬁts

it

will

be

easier

to

build

a
business

case,

for

budget

and

support
• Aher

all,

as
demonstrated
earlier,
e-‐commerce

is

a

driver

of

sales

for

all

channels

of

the

business

241

• So
don’t
think
of
e-‐commerce

as

a

silo,

or

an

individual

channel

• And

if

you

can

communicate

this

successfully

then

the

board

will

see

that

the

value

of

e-‐
commerce

and

of

the

web

channel

in

general

terms

is

business-‐wide

• But

consider

that

in-‐store

personnel

should

be

rewarded
for
genera.ng
sales
online
otherwise

they’ll
stay
in
a
silo
mentality
and
will
fail
to

support

the

business

as

a

whole

242

• If
you
don’t
focus
on
geing
stakeholder

commitment
and
a
clear
understanding
of
the

challenges
and
capabili.es

required

from

the

outset

of

your

e-‐commerce

project,

you

run

the

risk

of

spending

too

much

.me

and

money

at

the

back

end

of

the

project,

trying

to

resolve

internal

problems

• So

ensure

you

engage

all

stakeholders

in

the

planning

phase

for

e-‐commerce

243

• You

can

select

the

best

technology,

have

a

clear

vision

and

roadmap

with

regards

to

where

you

want

to

take

the

e-‐commerce
channel,
but

if
you
don’t
have
an
experienced
and
highly
effec*ve
project

manager,

your

project

will

fall

down

in

one

or

more

of

the

following

ways:
•

•It

will

be

late.

This

is

preVy

much

guaranteed.

We

have

seen

a

number

of

examples

of

poor
project
management
that
have
seen
sites

go
live
a
year
aEer
the
intended
go
live
date
•
It

will

be

lacking

in

scope
and
therefore
won’t
be
‘fit
for
purpose’.

Long-‐term
thinking
is
required

here.

•Invariably

it

will

be

over

budget,

as

it

will

run

late,

and

may

also

require

various

aspects

of

code

to

be

re-‐wriVen.

•Your

internal

stakeholders

will

be

dissa*sfied

and

may

lose

faith

altogether

in

the

e-‐commerce

opportunity.

•It
won’t
achieve
it’s
full
poten*al
in
terms
of
revenue
genera*on
–(unfortunately,

the

significant

organic

growth

experienced

by

most

online

retailers

oEen

masks

the

inefficiencies

of

their

websites).

244

Deﬁne
The
Opera1onal
Structure

The
diﬀerent
models

246

• The
diﬀerent
models:

• 1.Mid
sized
mul.
channel
retailers
(Ted
Baker,
Mulberry
etc):
– Head
of
e-‐commerce
tends
to
own
much
of
the
end
to
end
process

– OEen
co-‐owns
fulﬁlment
and
logis*cs
– E-‐commerce
developed
as
a
‘bolt
on’
with
dedicated
opera*ons
and

services
such
as
merchandising,
marke*ng
and
customer
service

– So
this
a
classic
‘mul*ple
channel’
retail
environment,
but
not
an

integrated
one

247

• The
different
models:
Con.nued

• 2.Large
FTSE
retailers
(M&S,
John
Lewis
etc):
– The
head
of
e-‐commerce
is
ohen
responsible
for
everything
on
the
website
– But
board
or
opera.onal
Director’s
own
different
parts
of
the
opera.on
such
as

supply
chain,
merchandising,
customer
service
– It
tends
to
be
a
more
integrated
scenario,
but
with
some
businesses
such
as
M&S

or
John
Lewis,
home
shopping
or
their
‘direct
business’
un.l
recently
was
a

completely
separate
business
unit
– The
model
below
reflects
where
I
believe
most
mul.
channel
retailers
should
be

heading
structure
wise;

248

• The
different
models:
Con.nued

• 3.Groups/Mul.
brand
owners
(Pentland
brands,
Arcadia):
– The
brands
have
their
own
management
team
ohen
including
a
head
of
e-‐commerce
– The
centre
of
the
business
provides
a
service
to
all
of
the
brands
across
marke.ng,

technology,
supply
chain
etc.
It’s
a
facilitator,
whereas
the
brands
own
management

teams
actually
trade
the
online
business

• 4.
Pureplays:
– They
do
everything
in
the
business.
i.e.
The
full
end
to
end
process
including
the

coding
and
web
development
side

• 5.
The
outsourced
model:
– This
is
where
there
is
a
small
e-‐commerce
team
ohen
only
responsible
for
content
and

some
trading
aspects.
Customer
service,
marke.ng,
supply
chain,
fulfilment,
the

plaôrm
are
all
outsourced
to
a
supplier
such
as
GSI
commerce,
PFS
web
etc

249

Based on the 4 pillars model:
The optimal trading structure for
B2C

• Schedule
a
kick
oﬀ
mee.ng
with
key
stakeholders
• (project

sponsor,

project

manager,

project

team

etc)

to

develop

the

high

level

roadmap

and

strategy

for

e-‐commerce

253

Create
a
steering
group
• A

recommended

project

team

structure

might

look

like

this:

– A

project

sponsor.

Ideally

someone

at

board

level.

– A

project

manager.

Someone

in

the

e-‐commerce

team.

– A

project

team:

the

head

of

e-‐commerce,

the

internal

project

manager

(if

you

have

one),

the

IT

manager,

someone

from

finance,

the

project

manager

from

the

agency,

etc.

– A

steering

commigee

comprising

of

key

members

from

cross

func.onal

areas

of

the

business

that

will

impact

upon

e-‐
commerce

(finance,

merchandising,

opera.ons,

fulfilment,

etc).

• Ensure

that

each

of

the

project

team

members

has

the

necessary

level

of

skills

and

experience

and

can

commit

the

required

level

of

.me

to

the

project.
254

Documenta1on
required
pre
and

post
supplier
selec1on

• A
supplier
contract
with
appropriate
SLAs
• You’ll
need
a
high

level

roadmap

and

strategy

for

e-‐
commerce

• You

will

need

a

detailed

ﬁnancial

plan

• Func.onal
speciﬁca.on.

This
will
cover
your

e-‐commerce

system

capabili.es,

func.onality,
integra.on

and

interac.on
with

users.
The
details
for
both
this
and
the

requirements

document
will
have
been
captured
during

stakeholder
workshops

and

one-‐to-‐one
interviews.

• Change

request.

This

is

usually

a

brief

document

outlining

the

objec.ve

and

requirements

of

the

change,

which

is

then

circulated

to

the

project

team

to

respond

with

the

proposed

solu.on,

cost,

.mings

and

impacts.

256

• Risk

log

and

impact

assessment.

This

is

normally

done

in

response

to

a

change

request.

An

impact

assessment

is

where

key

opera*onal

func*ons

and

departments

review

the

proposed

change

to

evaluate

whether

there

will

be

an

impact

on

systems,

people

or

processes.

Risks

and

issues

are

highlighted

up

front

and

managed

appropriately.

• Resource

plan.

Create

a

GANTT

chart

and

use

it

to

ensure

appropriate

resource

is

available

for

e-‐commerce

implementa*on.

• Cri*cal

path

and

*ming

plan.

This

covers

the

proposed

*mescale

for

the

project

and

helps

to

iden*fy

dependencies

of

all

ac*vi*es.

This

will

let

you

put

together

the

resource
and
*ming
plan.
You
need
to

es*mate
how
long
each
element
of
the
project
will
take.

It’s
always

best

to

build

in

some

con*ngency

to

the

*meline

for

each

key

milestone,

and

use

the

cri*cal

path

as

to

con*nually

measure

your

progress

against

the

*meline.

• Tes*ng

schedule.

This

will

cover

user

acceptance

tes*ng

(UAT)

as

well

as

load

and

stress

tes*ng

the

system

and

should

cover

tes*ng

required

as

a

result

of

change

requests.

257

• Tes*ng

schedule.

This

will

cover

user

acceptance

tes*ng

(UAT)

as

well

as

load

and

stress

tes*ng

the

system

and

should

cover

tes*ng

required

as

a

result

of

change

requests.

• Release

schedule.

A

schedule

of

when

changes

are

planned

to

be

released

to

the

website,

ensures

priori*es

are

met

and

that

the

appropriate

test

environments

are

available

at

the

right

*me.

• Project

go/no

traﬃc

light.

This

highlights

any

outstanding

requirements

prior

to

go-‐live
and
provides
a
view
of
the
status
of
these
elements
and
they’re

poten*al
impact
which
is
communicated

by

giving

each

item

a

red,

green

or

amber

status.

• Build

a

communica*ons

plan.

Review

it

regularly,

and

communicate

frequently

with

all

the

key

stakeholders.

This

is

a

key

aspect

of

successful

project

management,

and

it

will

also

help

to

ensure

that

all

stakeholders

remain

engaged

throughout

the

lifecycle

of

the

project.

• Conduct

risk

assessment.

It

is

wise

to

carry

out

a

full

risk

analysis

and

document

all

risks

in

a

risk

register.

You

need

to

regularly

review

each

risk

to

ensure

you

are

managing

them.

If

you

have

an

internal

audit

department,

then

they

are

the

ideal

people

to

manage

this

aspect

of

the

project.
258

Requirements
Gathering:
Front
End,
Back
End,
Integra1on

Timeline:
1
to
2
weeks

Process:
Workshops
&
stakeholder
interviews

260

Which stakeholders requirements
should be captured?
• IT and system development resources

• Website design resources

• Buying & Merchandising resources

• Commercial planning and stock management
resources

• Pricing and promotions management resources

• Content creation and content management
resources, including photography and copy

Which stakeholders requirements
should be captured?

• Product photography and artworking resources

• Online/digital marketing resources

• Order management resources

• Loss-prevention fraud-screening

• Customer contact management resources

• Warehousing facilities: Pick, pack and despatch resources,
returns processing resources

• Parcel carrier service

• Reporting and control resources

What questions do you
need to ask?

Brand/design

• What are the brand values and ethos, existing
visual collateral, guidelines we need to consier?

• What aspirations, sites liked/disliked, etc?

• What brand experience do we need to create?

Front end
• Site wide functionality

• Discuss functionality that runs across whole site

• Newsletter sign-up, email-a-friend, social links, recently viewed,
mini basket, login, etc.

• Main Pages

• Discuss requirements for main site navigation, Home Page,
Category & Brand landing pages, search and product listing pages

• Search

• How ‘sophisticated’ does search need to be?

• Does content other that products need to be returned in search
results

• Guided (faceted) Navigation

• By which search facets should users be able to select/ﬁlter products?

• Single or multi-select facets?

• Products

• Discuss product range, and any special requirements relating to display
of products/Brands on the site

• Personalisation

• What level of personalisation, if any, should the site support?

• Merchandising Tools

• How are the products to be merchandised?: manually, rules based,
algorithm based, mixture…

• Promotions

• What promotions types, triggers, & targets does the platform need to
support

• Checkout Pages

• Discuss the checkout process – single or multi-page, guest checkout, do or
don’t’ promote other products in checkout, etc.

• General Site Pages

• ‘Static’ content pages: About us, contact us, Help/FAQ’s, etc.

• Customer

• What features & functionality will be in the ‘My Account’ session of the
site

• What integration requirements are there around customer for other systems
(OMS, CRM, other?)

• Wish List

• Will you have one? What level of
functionality?

• Triggered Emails

• At which points should the site send emails
to users (order, registration, shipping,
abandoned basket, other?, etc.

Back End
• Content Management (CMS)

• Requirements for, who will use, authorisation workﬂow, etc.

• Product Information Management (PIM)

• Requirements for, who will use, authorisation workﬂow, etc.

• Order Management (OMS)

• Is one required? IF so, requirements.

• Stock

• Handling of out of stocks, back-orders?, stock level feeds?

• Shipping

• What will the customer proposition be here?

• Split delivery? Gift card & wrap?

• Where to?

• Which payments will be accepted? Paypal?, loyalty?

• Fraud?

• PCI Security

• Call Centre

• Outsourced or internal?

• Requirements for?

• Email Marketing

• Level of Integration with

• Integration

• To back-end systems (products, stock, orders, customer)

• 3rd party systems?

• 3rd Party Product Feeds

• Are these required, if so, details.

• Analytics

• Requirements for

• Reporting


• Hosting


• Account Management


Products and content

• Photography: Where and how will we do this?

• Rich Content: A fundamental requirement to drive
sales...however it needs to be created to drive sales

• Exclusive Products: Could you offer some exclusive
products online?

• Head or long tail products?

Logistics

• Outsource logistics?

• Packaging: Fit for purpose for B2C?

• Stockholding: Requirement to forecast

• Returns handling: Processes required to handle this

• Customer proposition to be determined: Matrix of existing
delivery service levels to be produced

• Australia only to begin with?

Customer Care: Call centre

• Managing B2C customer services

• Service provision only?

• Or, also as an additional sales driver: Card
sales, live chat etc?

• Operating hours

• Managing International calls

• Language and time requirements

IT and Integration
• ERP/legacy systems

• Stock management

• PIM

• CRM

• Other Data Services

• Ensure that the platform you choose can be easily
integrated with other parts of your business, such
as your CRM and product information channels

• Many companies are realising that sales and
marketing functionality is increasingly important

• Your ecommerce solution should be the engine
room of your online sales and marketing efforts,
helping with customer acquisition, customer
retention, cross selling and upselling etc

Roll Out

• Australia to begin?

• Then English language countries?

• EU when?

• White label?

The
Supplier
Selec1on
Process

Timeline:
5
days
with
itera*ons

Process:
Produced
by
head
of
e-‐commerce

and
IT
director
or
by
a
consultant

282

Are
you
thinking
about
what
the

customer
wants?
• Your
e-‐commerce
strategy
needs
to
focus
on
the
customer

experience
to
ensure
success
and
in
order
to
make
sure
that

you
are
doing
jus.ce
to
your
brand
and
diﬀeren.a.ng

yourself
in
an
increasingly
compe..ve
marketplace
• Does
your
company
really
understand
what
your
customers

want?
• Are
all
the
necessary
stakeholders
within
your
company

feeding
in
to
your
e-‐commerce
strategy
to
ensure
that
you

have
an
integrated
approach
• Is
the
supplier
on
the
ball
in
terms
of
usability
and

accessibility?
283

1. Introduction

• State your objectives and provide clear guidance on expectations

• The X Shop has ambitious plans for their growth online, and is
considering a new platform to help them achieve this. They have a
desire to be live by pre-Christmas 2011. This will require a new
site design, and this requirements document is to be used as an
RFP for both design and platform

• However, any particular vendor may respond to either one or the
other aspect, or both

• Please make clear in your submission which aspect(s) you are
tendering for, and how the cost is allocated between them

2. This Requirements Document
• This document sets out X Shop’s requirements for their new transactional websites. It uses
the MoSCoW ratings approach for the level of requirement as follows:

• M – ‘Must Have’

• Clear requirement for ﬁrst phase launch of site

• S – ‘Should Have’

• Ideally part of the 1st phase launch, but as long as the Functionality was conﬁrmed
deliverable shortly after launch, could form part of a 2nd phase launch

• C – ‘Could Have’

• Indicates Functionality X Shop might like to have, as long as the cost & complexity
were reasonable. It would be helpful to know how your platform could deliver
this Functionality, but could be phase 2 or even 3 releases.

• W – ‘Won’t Have’

• Indicates Functionality X Shop don’t need now, or in the medium term.

2. This Requirements Document
• Of course, it would be great if everything contained in
this document were ready & available for immediate
launch at modest cost
• However, since this might not be the case, the winning
tender is likely to be the company that is able to deliver
the largest portion of Functionality, at the earliest time,
for the lowest cost
• Where the proposal is to phase the delivery of
functionality, please quote separately for the Must Haves,
the Should Haves, and the Could Haves

3. The Tender Process
• We aim for this to be a very clear & transparent tender process, with each vendor
ranked against the following key criteria:

• Your proposal

• Functional Fit ‘out of the box’

• Ability to deliver any outstanding Functionality

• Time frame for delivery of all agreed Functionality, over 1 or 2 phases

• Project Management approach

• Ability to service & support the site on an on-going basis

• Contract terms

• Client references

• Costs

• For the design element, the ability to translate X Shop’s brand values into a
high-conversion transactional site with great usability and accessibility.

• Please ensure your proposal responds explicitly to
the requirements in this document – ideally in the
same order (and with the same outline numbers)
presented here, as well as directly addressing the
key criteria listed above

• Submissions that are just standard marketing
about your platform, and don’t respond to the
speciﬁcs will be judged poorly

• Please demonstrate clearly how your proposal
delivers these requirements, and back this up with
screen-shots of back-end systems & live websites
that demonstrate the Functionality purported.

• In general, the tender process will have 3 phases:

•

1 – Review received proposals and evaluate against criteria listed
above, in order to reduce list of ‘possibles’ down to 2, or at most, 3
options.

•

2 – Full-day on-site visits with short-listed options, where full
demonstrations of the systems (not just PowerPoint!) will be expected, as
well as commercial discussions and ‘cultural ﬁt’ can be gauged.

•

3 – Due diligence and customer references for the best-ﬁt options,
in order to evaluate the winning tender.

• All submissions should be in electronic form, and emailed to

3.1 Timeline
• A somewhat more legible, landscape version of the
above is on the last page of the document. However,
the high-level plan is for:

• 1)

Discovery/Design to begin XXX 2011

• 2)

Build to begin XXX 2011

• 3)

UAT XXX 2011

• 4)

Go-live XXX 2011

3.2 Cost basis
• Please note The X Company is looking for a ﬁxed
price quote for this project, not a T&M estimate

• This quote will of course be dependant on a detailed
discovery phase, but we would hope that the price
after discover varies no more than 10-15% from your
quote during the tender process
• If your quote is on any other basis, please make this
explicitly clear, as the assumption will be ﬁxed price,
and this will be the basis of all discussions going
forward, unless agreed otherwise.

3.3 Conﬁdentiality

• The contents of this document should be
considered commercial in conﬁdence, and are
not to be distributed outside of those in your
organisation required to prepare a response

• You’d want them to sign a NDA

4. The Brand
• The X Company wants to grow their online their business to account for
15-25% of their overall business within 3 years

• The X Company wish to differentiate themselves online by listening to their
customers and provide high quality customer service. They want to be seen as
offering good value for money, bringing to market exclusives, ﬁrst to offer
products, whilst maintaining excitement and an element of surprise amongst
their customer base.

• They have identiﬁed 3 main reasons why customers come to their current site:

• For replenishment

• To browse

• To Indulge

• X is seen as a very personal purchase; the X Company want to try and create
some of this experience online via for e.g. personal customer stories so it is
more than just about product and price.

Newsletter/email sign up:
How not to do it!

Consider
adding
a
basket
lightbox
when
item

added
to
basket

An
intui.ve
CTA
to:
1.add
to
cart
or

•con.nue
shopping

Also
a
great
opportunity

for
cross
selling

307

Intuitive error messaging and form

Meets the needs of all user groups
and all above the fold

Meets the needs of all user groups

- Where are the calls to action?
- Bestsellers...new in...
- Only one product in clear view above the fold

A 3x2 grid increased conversion by 15% over a 4x3
grid...again less is often more in this space!

Where are bestsellers, new in, customer favourites?
Look at the size of the images compared to Schuh

no ﬁlters....give me a hand please!
Style, occasion, price, size etc

FC AS Theory Tommy CT GANT
Persuasive
product

descrip1on
Good
quality
product

image
with
zoom
Mul1ple
views
of

product
image
inc

model
Product
price

Size
op1ons

Stock
and
availability

Delivery
price
and

op1ons
Expected
delivery
date

Clear
‘Add
to
Basket’

Wishlist
/
forward
to
a

friend
/
social
Customer
ra1ngs
and

reviews
Returns
Policy

Sizing
Chart

Email
me
when
back
in

stock
Cross-‐sells
/
up-‐sells
/

complete
the
look
SEO
H1
/
H2
Tags

Site conversion from search:
Retail average is 7.6%
(General retail average conversion is 4.23%)

Search for ‘jeans’ with all relevant
ﬁlters and facets

Look what happens when I search under
‘denim’....and how the heck do I narrow my
choice down to make a purchase decision?

There should never be a
‘null search’ return

Visual merchandising:
Has a massive impact on conversion

Myla
Model
choice

She
is
way
too
skinny….

Almost
anorexic.

It’ll
be
a
put
oﬀ
for
a
lot
of

customers.

Model
Choice
Healthy,
curvy,
volump.ous
and

olive/dark
skinned
models
sell

lingerie.
AP,
Boux
and
M
&
S

Image Size

• Each product displays only slight discernable differences to each other,
fit, stripe, check, cuff, collar etc…
• Informing the customer of these style differences quickly is very
important in the customer journey
• Online, the visual merchandising has to convey the product detail and
brand values of quality to the customer. Image size is critical to this

Image Size

On product listing …difficult to discern product detail… check or strip?

Image Sizes

• TP image size on product listing and product detail page is the smallest of
those reviewed. -40% to the average (of those reviewed) on both product listing
and product detail page.
• Image size is too small to get across the quality and design details of the
product and does not sit with brand core values.
• Net a Porter images on product listing nearly 3 x that of Thomas Pink.
• On the whole, retailers trading on quality/ designer have 3 images across on
their product listing.

Image Size – Product detail

Only at zoom stage can you see that product is checked.

Image Size.

Only at zoom stage can you make out that the product is striped
and understand the quality of the garment… it also has piping
detail.

Image Size

•On tailoring with high selling prices … the small images do not
validate the product quality. It is difficult to get any sense of
quality
•The banner gives some quality assurance and reference

Shots need to be retouched
Too many shots don’t sell the product effectively
enough

Cross selling increases conversion
and the ATV

5.8.2 Promotion Triggers:
How you get it

5.8.3 Promotion target:
Who’s entitled to it

5.8.4 Promotions in the basket

Only £25 away from free next day
delivery...question is, how much is delivery?

• 3 testing options for Remarketing with a classic abandoned
shopping cart follow-up email, but with 3 alternative follow-
ups which were tested with these results:
1. Generic branded follow-up email : +10% conversion rate
2. Personalised remarketing email with a promotional code for a
5% discount time limited to 72 hours: +100% conversion rate
3. Personalised remarketing email with a promotional code for
a 5% discount time limited to 48 hours: +200% conversion
rate
Source: Smart Insights

5.9 Customisation/Personalisation

The Shopping bag and checkout are
where you lose most of your sales

46.4%
of
customer’s
don’t
even
make
it
from

the
bag
to
the
1st
stage
of
the
checkout...
why?

Why do they abandon here?
•No delivery options
•No delivery info to total order value
•No idea whether or not I can add a
gift message?
•Gift wrap message is hidden/too
small
•They may not have a promotional
code but think they should have
•Data capture is just a distraction
•Difﬁcult to see update basket or
continue shopping buttons
•Not everyone is ready to buy

6.2 Product Information
Management

The
system
should
enable
the
set-‐up
of
affiliate
&
campaign
codes,
which
can
be
assigned
to
each
affiliate
or
PPC

campaign,
and
tracked
by
the
system,
via
the
analy*cs
tags,
through
to
the
campaign
management
repor*ng
in
the

analy*cs
applica*on.

The
system
should
support
best-‐prac*ce
affiliate
and
campaign
tracking
(the
repor*ng
and
analy*cs
of
this
will
be

done
through
the
3rd
party
analy*cs
package,
but
the
site
database
&
HTML
should
be
coded
sufficiently,
and
with

enough
granularity,
to
feed
the
analy*cs
package
appropriately,
and
the
affiliate/campaign
codes
wriVen
to
the

customer
&
order
tables
so
they
can
be
reported
on
locally.

6.11 Affiliate and Campaign codes

7. Integration with back end systems

8. A/B and multi variate testing

9. Mobile
• The X Company is interested in incorporating a mobile approach into their
overall Digital Strategy. Initially the main site should be built to be accessible via
a mobile device. They would like to explore creating a device speciﬁc mobile
app to provide for e.g.
• Stores near me using GPS

• Use of SMS to notify customer of order status

• Experimentation with QR codes
• Looking to implement PDAs/tablets for staff in-store as used in Apple
Store.

• Need to be able to reskin main website
• It should be device and browser compatible & integrated with mobile payment
gateways

• Overall requirements TBA

12. Account Management
• While this document has focused on platform functionality, we can’t stress enough the
importance of on going account management as a selection criterion for this project. As part of
your proposal, please describe and conﬁrm the following key points:

• Who would be our named account management team, and what are their responsibilities?
• Is this person/are these people technical, commercial, or both?
• What do you offer, on an on-going basis, as far as best practice and innovation, for example?

• What is your development road-map for your platform and services?
• What direct access will we have to technical support staff, and during which days/hours?

• Please describe your process for handling bugs/issues, and change requests, and how the
two are deﬁned and delineated
• Do you have standard SLA’s around account management? If so, please describe these

13. Hosting
• When explaining your hosting proposal, please, as a minimum, confirm the following:
• Your recommended hosting architecture for a ‘minimum’ & ‘optimal’ solution

• Bear in mind that even minimum hosting must reach the performance requirements mentioned below
• The operating system, and any 3rd party software required to deliver your solution
• What monitoring & alerting processes are available

• What support options are available
• Your experience with load balancing web servers (hardware and/or software – please confirm) and clustering
databases
• Please give specific examples and references for your claims here
• Performance is expected to delivery page load times no greater than x seconds on a 512k broadband connection
• Downtime is expected to be no greater than 0.5%
• What business continuity and disaster recovery procedures do you have in place to support downtime SLA of
0.5%?
• 24/7monitoring with helpdesk and alerts support
• Cloud or dedicated hosting with scalability for peak traffic

• SQL database(s)
• Multiple redundant DNS and SMTP servers

• Manage multiple B2C & B2B ecommerce storefronts, corporate sites, micro-
sites, extranets, forums, and blogs from one central platform

• Individual web stores can have different or same designs (or mixture of),
same or different functionality, different or shared content

• Host different domain and manage and share content across these; either
shared or exclusive

• New version rollouts on bi-annual basis

• Supports sharing of customers across multiple web stores with a single
registration, facilitating shared baskets across sit

• Please describe the various SLA’s agreement offered, and the associated
costs

• Security

Select
Vendors:
Plaorm
providers,
System
Integrators,

Design
Agencies

• Timeline:
4
weeks
in
total
• Process:

– Give
them
the
RFP
and
2
weeks
to
respond
– Take
3
days
to
review
responses
– Take
2
to
4
days
to
conduct
due
diligence
with
full
day

demos
– Score
the
vendors
and
make
a
decision

425

Some
ques.ons
to
ask
at
the

outset...
• How
‘future-‐proof’
are
the
vendor’s
technologies?
• Is
your
technology
easy
to
use
and
manage
(so
that
you
will

not
be
incurring
extra
costs
and
stretching
your
internal

resources
on
a
regular
basis)?
• Has
the
pla^orm
been
built
with
Search
Engine
Marke.ng

in
mind?
• Web
analy.cs
are
important
to
ensure
that
you
can

measure
what
is
happening
so
you
can
adapt
and
grow

accordingly.
What
kind
of
capabili.es
does
the
pla^orm

have
in
this
respect?
• –
Will
the
analy.cs
give
you
the
level
of
granularity
you

need?
426

• Find
out
what
kind
of
repor.ng
comes
as

standard
and
what
will
cost
you
extra
• Are
there
features
in
the
pla^orm
that
you
don’t

need
on
Day
1?
Understanding
how
much
these

will
cost
to
implement
once
the
site’s
live
will

help
you
plan
your
budget
and
your
approach
to

market
• Will
you
be
geing
the
level
of
strategic

consultancy
you
are
hoping
to
make
sure
that
the

technology
is
working
for
you
at
an
op.mal

level? 427

• If
you
are
using
an
agency,
are
you
convinced
that

they
have
the
project
management
capabili*es
to

deliver
your
requirements
on
*me
and
within

budget?
• Are
you
prepared
to
pay
more
to
get
an
agency

with
a
proven
track
record
in
your
market
sector?
• Are
the
capabili*es
real
or
planned?
Make
your

assessment
evidence
based,
relying
on
what
they

agency
has
delivered,
rather
than
on
what
they

say
they
can
deliver.

428

Main
Process
Steps
• Agree
the
scope
of
what
this
procurement

process
covers
• Deﬁne
your
requirements
• Priori.se
your
requirements
• Invite
proposals
speciﬁcally
against
these

requirements
• Objec.vely
manage
the
tender
process,
&
score

op.ons
against
your
requirements
• Ensure
non-‐func.onal
requirements
are

evaluated
along
with
func.onal
ones

Agree
the
scope
of
what
this

procurement
process
covers
• There
are
a
lot
of
different
elements

(and
possibly
3rd
party
tools)
that
can

form
part
of
an
eCom
plaôrm
(the

graphic
on
the
right
is
only
a
part
–
doesn’t
include

Order
or
Warehouse
Management,
for
example)
• So
be
clear
what
the
remit
for
this

project
is.
Does
it
cover
all
of
these

items,
or
just
a
subset?
• Can
some
of
them
be
evaluated
in
a
2nd

phase
aher
launch,
or
are
they
intrinsic

to
the
projects
success?
• Which
ones
are
‘core’
to
the
plaôrm,
&

which
ones
possibly
ancillary
add-‐ons

Define
your
requirements
• Once
the
scope
is
defined,
you
can
dig
down
into

the
detail
of
the
requirements
for
what
is
in

scope
• Remember,
if
you
ask
for
the
world,
expect
to

pay
for
it!
So
think
carefully
about
what
really
is

going
to
make
a
difference
to
how
you
run
your

business
• Watch
out
for
func.onality
that
sounds
great,

but
that
you’ll
never
get
‘round
to
using

A
‘typical’
Prac.cology

RFP
Contents
List

Priori.se
your
requirements
• Unless
your
check-‐book
is
open-‐ended,

priori.se!
• You
won’t
be
able
to
do
it
all,
so
make
sure
what

you
do
get
is
what
you
need,
and
will
deliver
an

acceptable
ROI
• Remember,
the
best
way
to
increase
the
risk
of
a

project
failing
is
to
try
to
do
too
much
in
one
go
–I’m
not
sugges.ng
to
lower
your
ambi.ons,
but
if
you

can
phase
the
delivery,
you’ll
have
much
beger
chance

of
success

Invite
proposals
specifically
against

these
requirements
• Vendor’s
love
to
sell
you
what
they
think
their

good
points
are
• That’s
fine,
but
might
not
match
up
with
what

you
need
• Make
sure
they
respond
specifically
to
your

requirements,
and
if
they
make
it
to
the
demo

stage,
that
they
do
demonstrate
how
they
will

deliver
these
requirements

Objec*vely
manage
the
tender
process,
&

score
op*ons
against
your
requirements

• Each
qualifying
proposal
is
likely
to
have
its’
own

strengths
(and
weaknesses),
so
how
do
you

weigh
these
up
and
compare
them?
–First
come
up
with
a
reasonably
granular
list
of

criteria,
and
then
priori.se
these
criteria
–Score
each
op.on
against
each
criteria,
&

independently
of
whatever
score
they
get
on
other

criteria,
&
then
do
the
math!
• Ensure
the
whole
process
is
as
open
&

transparent
as
possible,
with
each
vendor
being

given
the
same
informa.on
as
everyone
else

Ensure
non-‐func*onal
requirements
are

evaluated
along
with
func*onal
ones
• Cultural
ﬁt
• Do
you
like
them?
• Contract
terms
• Payment
terms
• Total
cost
of
ownership
• Domain
experience
• Thought
leadership

• These
are
all
valid
evalua.on
criteria,
and
should

be
included
along
with
the
func.onal

Ensure

you
are
comparing
like
for
like

Objec.ve
Scoring
Matrix

• Timeline:
2
to
4
weeks
• Run
workshops
to
detail
and
capture
what
is

actually
going
to
be
built
– Informa.on
architecture
– Customer
journey
– Customer
experience
– Integra.on
etc

440

Be
careful!
• NEVER
sign
a
contract
before
you
have
gone

through
a
detailed
discovery
phase
• Only
then
can
you
know
the
true
cost
of
what’s

going
to
be
delivered
• And
only
then
can
you
feel
fully
comfortable

with
their
ability
to
deliver

441

Your biggest challenge here is ﬁnding
good SI’s

Build
Approaches
• Waterfall
–Spec
fully
up
front
–Only
start
build
when
signed
off
–Can
be
‘fixed
price’
–
but
be
clear
on
this
with
vendor!

Pros Cons
•(should
be…)
very
clear
what
you
will
•Huge,
.me
consuming,
lengthy,
&
costly
effort
to

be
geing document
in
enough
detail
•Vendor
should
be
able
to
give
accurate
•You
may
not
know
all
the
answers
you
need
to

quote
based
on
detailed
spec complete
spec
at
the
.me
•Test
scripts
and
user
acceptance
•Rigid
spec
that
needs
change
management

criteria
can
be
based
on
same
document control
to
amend

Build
Approaches
• Agile
–Build
the
essen.al
frame
work
ﬁrst
–Fill
in
details
as
you
go
–By
deﬁni.on
is
Time
&
Materials
priced

Pros Cons
•Much
quicker
path
to
prototyping
site,
•Client
doesn’t
have
clear,
documented
list
of
what

where
you
can
see
what
you
will
get
they
will
get
for
what
price
ahead
of
.me
sooner •Risk
moves
to
client
(but
hence
lower
cost)
•Changes
much
more
easily

accommodated
•Should
be
overall
lower
cost
&
quicker

development

What
Plaôrm
Op.ons
are
there?
• ‘True’
Sohware
As
A
Service
(SaaS)
–I
say
‘true’,
as
several
claim
this,
but
almost
no-‐one
is
–‘Ideal’
is
single
version
of
plaôrm,
that
every
client
is

on
–That
way
simpler
to
maintain
–Everyone
gets
access
to
updates
–But
• Much
harder
to
customise
• You
have
the
same
as
everyone
else.
Limited
compe..ve

differen.a.on

What
Plaôrm
Op.ons
are
there?
• Fully
Managed
–Eg:
Venda,
BT
Fresca
–Vendor
provides
hos.ng
as
well
as
plaôrm.
–Typically
(almost)
all
clients
are
on
same
version
of

sohware
(or
at
least
that
is
the
inten.on)
–There
is
usually
fixed
monthly
flat
fee,
plus
some

turnover/transac.on
charging/%
–Is
simpler
for
budge.ng,
and
can
some.mes
get

launched
quicker
–But
generally
limita.ons
in
flexibility,
as
vendor
tries

to
align
func.onality
across
all
clients

What
Plaôrm
Op.ons
are
there?
• Dedicated
–Can
be
any
plaôrm
that
runs
independently
in
it’s

own
instance
(eg:
hybris,
Magento).
Essen.ally

anything
other
than
SaaS
or
Fully
Managed
plaôrms
–Client
might
host
through
arrangement
with
plaôrm

vendor,
but
can
also
make
independent
hos.ng

arrangements
–Client
fully
in
charge
of
own
des.ny,
as
far
as

bandwidth,
cpu,
integra.on
points
in
&
out
of

environment
–But
also,
dependent
on
plaôrm
efficiency,
can
get

expensive
on
hos.ng
as
client
takes
all
responsibility

to
ensure
enough
horsepower
to
run
site

What
Plaôrm
Op.ons
are
there?
• Shared
–A
hybrid/lower
cost
version
of
fully
managed
&

dedicated
–Vendor
manages
hos.ng,
and
splits
cost
of
hos.ng

across
a
number
of
clients
–Obvious
cost
advantages,
and
for
low
volume
can
be

suitable
–But
spikes
from
other
clients
can
affect
your
site’s

performance,
and
you
may
have
limita.ons
based
on

your
traffic
so
you
don’t
adversely
affect
others

ROI
• E-‐commerce
pla^orms
can
help
organisa.ons
...
• Drive
revenue
online
and
instore
• Boost
visitor
numbers/improve
customer

acquisi.on
•–
Improve
search
engine
op.misa.on
•–
Increase
conversion
rates
•–
User
friendly
technology
•–
Improved
informa.on
architecture
•–
Less
drop-‐outs/abandonments
•–
Improved
site
search
capability

454

ROI
• Increase
basket
value
•–
Upsell
and
cross-‐sell
func.onality
•–
Relevant
promo.ons
• Improve
customer
reten.on
•–
Customisa.on
and
personalisa.on
•–
Dynamic
pricing
and
merchandising
• More
accurate
and
granular
repor.ng
to
boost

understanding
of
most
proﬁtable
product
lines/
products
• Improve
processes
and
produc.vity...speeding

455

ROI
• Reduce
costs
– Increased
automa*on/streamlining
of
business
processes
– Reduce
or
remove
need
for
internal
IT
resources

– Scalable
technology
without
need
for
major
investment
later
on
– Pay
for
what
you
use
(on-‐demand
solu*on)
– Reduced
call
centre
costs
though
beVer
service
online

• Improve
branding
– BeVer
customer
experience
– Faster
website

– Seamless
experience
across
channels
(e.g.
call
centre
synchronisa*on)
– Tried
and
tested
technologies
• Improved
website
design
– Less
cluVer
– Economy
of
processes
456

Costs?
• 25k
to
over
$2m
• The
business
model
drives
the
cost
• Integra.on
is
ohen
the
key

457

• Build
the
site...
• Timeline
4
to
6
months

458

It’s
not
easy!
Get
some
qualiﬁed

help
if
you
can

459

• Download
the
workshop
here
from
7pm
this

evening:
• hgp://www.prac.cology.com/index.php/
member/register
• Password
is:
prac.cology1

460

Thank You!

www.Practicology.com
martin@Practicology.com
Twitter: @martinnewman

Procurement essentials 1 martin newman uk

More Related Content

What's hot

Viewers also liked

Similar to Procurement essentials 1 martin newman uk

Recently uploaded

Procurement essentials 1 martin newman uk