In its second-largest acquisition, Amazon buys the company for $970 million.
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When systems are integrated, retailers are able to understand their inventories better, says Andryauskas. Without integration, the sheer volume of orders may hinder retailers’ ability to do simple things such as tell a customer what is available and what is not. Retailers also have trouble anticipating customer needs when their systems aren’t connected, he notes.
Campmor Inc., which has sold clothing, camping and backpacking equipment since 1978, has made linking its Web site to an existing inventory management system its top priority as it begins to implement a strategic systems integration plan. Merging in shipping and accounting applications will follow, with all the integration completed by year’s end.
The Upper Saddle River, N.J.-based retailer augmented its bricks-and-mortar and catalog operations in 1996, when it set up a Web site with a homegrown infrastructure. Today it is working with Thomas & Poorbaugh Communications to connect its systems, which were built on a mainframe computer that wasn’t designed to support a Web site. Managing systems integration while trying to keep the front end of the Web site fresh and exciting is “an incredible juggling act,” admits Marion Poorbaugh, Campmor’s senior vice president.
But the rewards of back-end integration, such as real-time information for customers, benefit the customer and the company alike. Shoppers want their questions-namely, “Where’s my order?”-answered promptly and correctly, notes Sharon Gardner of Smith-Gardner Associates, a store management software company in Delray Beach, Fla. “A customer should be able to call up their order and see its status,” Gardner adds. “That’s the exception today.”
Integrated systems can create distinctions between Web stores, says Kent Anderson, president of macys.com, which recently spent five months and more than $1 million integrating its Web site with its back-end software. An in-house team worked with outside contractors from IBM to get the job completed. “This will differentiate who will do well for the fall ’99 season,” Anderson says. “There is opportunity for those who are prepared.”
Macys.com’s investment isn’t uncommon for retailers working on integration issues. The cost for the software and hardware to integrate a system can range from $100,000 to $3 million, depending on the size of the company and the order volume, says Gardner of Smith-Gardner Associates. Once in place, however, integrated systems are a tremendous strategic weapon. “If you can crack this nut, there’s a lot of value,” says OrderTrust’s Daniell.
Yet even retailers who have tackled big integration projects are finding that there’s always room for improvement. Macys.com is working to remove a bottleneck in shipping, with the goal of filling 95% of orders within 24 hours of receiving them.
Join the club
Another company that has embraced integration is ClubComputer Inc., a Cary, N.C., discounter of digital cameras, notebook computers and the like. ClubComputer integrated its systems before launching its Web site last November, says CEO Dennis Tracz, and the company is constantly working to improve the way its systems communicate with one another and its suppliers’ systems.
ClubComputer.com operates without an inventory, relying on two main suppliers and five or six others for merchandise. Computer systems integration is complex because each supplier uses a different system, Tracz says, but the retailer works with Interpath.com, a subsidiary of the Southeast utility giant Carolina Power and Light, to maintain its Web site and build the integrations.
While ClubComputer.com has seen its monthly revenues grow from $50,000 last November to $600,000 in April, new integration projects allow the company to enhance its customer service as well. In spring the company introduced a self-service tracking system for orders, which allows customers to track an order at their convenience.
In a retailing environment where size isn’t everything, staying on top of systems integration can level the playing field between a small operation like ClubComputer, which has four employees-and its larger, slower competition. On the Internet, Tracz notes, “You don’t compete with people. You compete with technology.”
Celestial Seasonings is betting on that. No one will be typing order information into the company’s new integrated system, which will automatically e-mail customers with their order tracking numbers and post information on the Web site so customers can check an order’s status online. By McKown’s estimate, the changes will enable the site to handle a 100-fold increase in volume. And it just might reduce the number of angry phone calls from customers-leaving all parties involved a little more time for a civilized cup of tea.
Ray Paprocki is a business writer based in Granville, Ohio.