Case Study: Canadian retailer learns online lessons

Case Study: Canadian retailer learns online lessons

Looking back, Alex Kozjak admits he and his colleagues at The Business Depot have learned a thing or two about conducting online business since launching their Internet store last year -- but then, that was the whole idea.

"We put ... a small offering (of products) in. We wanted to explore the idea of e-commerce more to be ready for the demands," explained Kozjak, Business Depot's manager, merchandising information and analysis, at the company's headquarters in Camada.

"We knew that we probably wouldn't get a lot of our business geared towards online initially. There's still some uneasiness about the security aspect of being on the Web. I think that's improving with time ... (but) we're hoping that it's going to be a great avenue for us in the future."

Kozjak said the current on-line store is a scaled-down version of the one Business Depot would like to -- and probably will -- open in the near future. For now, however, the initiative is as much a means to introduce Business Depot customers to e-commerce as it is a chance for the business supply retailer to expand its customer base.

Trusted names

After going over months of user feedback, Kozjak is convinced there's a very big opportunity for a recognised retailer in the world of e-commerce. "There are a lot of companies conducting Internet commerce, and I think one of the things that's going to get a lot of the initial users past some security issues is having the retailers they know and trust on the Internet, and perhaps that will allow them to accept the technology a little bit more."

Business Depot's on-line push began in late 1996, when it issued a public request asking for assistance with some projects, including a service which would allow customers to buy and design their own Web site at one of Business Depot's retail outlets.

"We know there are a lot of software packages out that allow you to create a Web site," Kozjak admitted, "(but) not everybody has the technical experience to actually go through the more complicated aspects of uploading the files ... and even if they have a background it's sometimes expensive to do it."

It was the proposal from Microforum, a Toronto-based software publishing and multimedia company, that impressed Business Depot. Marco Argenti, Microforum's vice president of Internet services and publishing, suggested setting up an Internet-linked WAN, accessible at each of Business Depot's 110 outlets nationwide.

Users would navigate a simple browser-like interface to create their own sites. Now known as CyberCentral, the Web site construction service is still in the testing stage but on track to hit the stores by summer.

"The challenge (with CyberCentral) was to make sure the inexperienced user was able to go through a page creation process, which is not easy. So there was a lot of testing, research and brainstorming done on how to make the system as easy as possible," Argenti said.

Ramping up

So impressed were Business Depot officials with the CyberCentral proposal that they awarded Microforum the on-line store contract and a chance to re-vamp the business Web site.

According to Argenti, the online store is hosted on several dual Pentium Pro servers, "with gigabytes of RAM," connected by a fibre-optic ATM line, scalable up to 155Mb per second.

Microsoft's Site Server forms the online store's backbone, although Microforum made a number of adjustments, including one of the first implementations of their own in-house middleware application, the Electronic Commerce Server (ECS).

"ECS ... sits on top of Site Server, enhancing certain applications and solving problems associated with on-line transactions," he said. "For example, (implementing) marketing programs such as loyalty reward -- or e-miles as we call them -- or being able to track orders in real time, to be able to generate all sorts of statistics about the users and use that [for] marketing campaigns."

Argenti also equipped the site with the ability to issue rainchecks, collect marketing information on customers and post "enhanced product display" features, which lets store managers create static HTML pages detailing time-specific product promotions which customers see if they request more information about a particular product.

Securing the site

Of course, security is a priority for both parties. Microforum made sure Business Depot had the means to check out, and if necessary cancel, any on-line order.

"Basically, the store manager can set the rules for what is considered suspicious orders," he said. "A safe path is set and, if all the conditions are met, then the credit card order is processed right away. Otherwise ... the user is instructed to wait for confirmation, or asked to fax the credit card number."

The order is also denied if the amount being purchased exceeds a certain value, or if the address the customer provides doesn't match with the credit card billing address. Meanwhile, updating Business Depot's home page was also tricky business, Argenti said. Like CyberCentral, the site had to be easy to navigate, even for Internet novices.

But according to Argenti, the number of hits jumped 2,000 percent after the renovations were complete. Kozjak has some advice for companies thinking about starting their own e-commerce ventures. Setting up the site is the easy part; it's properly supporting it that poses the biggest challenge.

"You're really spending a lot of your time answering e-mail inquiries -- general information through the Web site. A lot of that is information directly relating to products, but a lot of it was general information about the company.

"So once you decide to go online, you have to be ready to support all customer questions that come through."

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