ARN: What exactly is your role at Staples.com?
Mike Ragunas: I've been in the dot-com part of the business for about two-and-a-half years. My role as chief technology officer is to run all the systems initiatives for our e-commerce businesses. We actually have four different e-commerce properties today.
Why is Staples.com run as a separate business unit from Staples?
We wanted to create profit-and-loss responsibility around driving this particular segment. We do see it as a different segment of the market with a different customer base that we're going after. We wanted to focus the right level of attention and the right sort of structure around driving that business very aggressively.
What are the leverage points between the dot-com business and the traditional storefronts?
We run a major catalogue business, a retail business, a direct sales business and Staples.com. We leverage the available resources from all those different areas. For example, we leverage our catalogue and contract-fulfilment infrastructure, which includes our warehouses and back-end systems and call centres, for fulfilling orders from Staples.com and from our various other Web properties.
We also provide space on our Web site where people can go to find the location of the nearest store. And people can go into any store and order from Staples.com. We have a lot of tie-ins across the different channels. We know from looking at our customer history that customers that shop with us across multiple channels are the ones who spend the most with us. So we get incremental sales from customers who come to us through multiple channels.
So when a customer calls in, the people working in any channel at Staples know each customer's account history?
Yes. [For example], if a customer calls into our catalogue business, our catalogue business knows about their Staples.com purchase history.
How did you accomplish this?
One of our key driving goals was not to build things new that we already had within the company. What we've done is to look at how we can integrate things together and flow that information in such a way that it allows us to service our customers from any different channel. We use message-oriented middleware in some cases, and other linkages between our different systems to allow us to see that information across the enterprise.
This would seem to imply that there is a lot of focus on customer management.
As a retail company, Staples has been very interested in building and forming relationships with our customers for many years. When we first started the business, we had a membership format, so we were actually collecting information about all of our customers and managing those relationships actively. We now have relationships with over six million different customers. We treat the whole customer relationship very seriously and we do work very hard to manage that relationship across the various channels.
Do you mine that data for customer trends?
We do that in a couple of different ways. In terms of our outbound marketing, we absolutely do personalise that based on what we know of people's purchasing habits and things that they have bought. We also have within Staples.com something called e-mail reminders, so people can actually set up for themselves to be reminded to buy certain things at a certain frequency. It's one of the ways that we build relationships with our customers and get them to work with Staples.com.
What key technology initiatives are you working on today?
One of the things that we have been doing is working in the XML space, with enabling our properties to integrate with other sites out there in the marketplace. We've been working with a lot of the marketplace platform providers on building integration between our sites and theirs. For example, if customers use Ariba in-house, we can actually work directly with those customers or with marketplaces that are building on those sorts of platforms. We can integrate with those as well to make sure that Staples.com is wherever our customers want us to be.
Is Staples.com going to be an exchange?
We already offer a wide variety of products beyond what you might find in our stores. So we are acting as an aggregation point and exchange there. We are also offering a wide variety of business services, which we're bringing to our Staples.com customers in partnership with a lot of other different providers. When you go out to Staples.com today, you'll see over 70 different service categories, offering services from over 20,000 different service providers. We're really offering a marketplace, or an aggregation point, for a lot of that demand.
How do you get all those partners to line up on the same technology infrastructure?
We partner with some key partners, one of which is Biz Buyer, an aggregator of a lot of these different service providers and services. We're able to offer a lot of these providers through a request-for-quote process, where customers are then hooked up through Biz Buyer with the service providers in their network. We also go out and work directly with a number of different service providers in a click-and-buy service, where people can come right to our site and buy services directly from these third parties.
If the Internet is the platform that the business runs on today, how stable is it?
I think the platform itself is pretty stable. I can't say that we've had a tremendous number of issues with the Internet itself at large. I think that the bigger challenge is making sure that all the different pieces that get put together to make up your individual business all work well. We work with a lot of different partners, we do a lot of work around pre-qualifying those partners to make sure their infrastructure is up to our standards. That's probably the biggest challenge we have.
How do you enforce service-level agreements around those alliances?
We actually have automated monitoring, so we do keep an eye on our partners' sites. We also have a partnership with Biz Rates, so we collect feedback from our customers and their experiences with Staples.com as a whole, and we get feedback on our partners with the same mechanism.
What's your biggest challenge today?
The biggest challenge we have today is transitioning our business from what's traditionally been a product-oriented business into a one-stop shop for both products and services for our customers. There are many different directions in which that business can go, so I think that we have to make sure that we're providing a platform that allows us to adapt to those changes in the business model.