June 1, 2006, 12:00 AM

SPONSORED SUPPLEMENT: Creating the e-commerce platform of the future

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Such flexibility lets retailers adjust their marketing and merchandising strategies across all sales channels to create a personalized shopping experience, as well as gain operating efficiencies. This one-two punch can deepen customer relationships by making the retailer`s sales channels more relevant to the consumer.

"In the retailer`s case, the end user of their e-commerce platform is the shopper, so they need to be able to conform that platform with their plan to enhance the shopping experience," says Ken Burke, president and CEO of MarketLive Inc. "To achieve that goal, retailers need tools to at least do base line segmentation of their customer base."

The cost of delivery

Creating a personalized shopping experience requires more than just using customer data to gain insights into customer shopping habits and product preferences. Increasingly, consumers want to know the cost of delivery before they actually purchase an item, how it will get to them, and have the ability to check on where the purchase is in the delivery cycle.

Getting at that information requires real-time connections to the back office systems containing that information so that consumers can access it any time during their shopping trip or afterward.

Providing shipping costs prior to purchase, for instance, can help significantly reduce cart abandonment, according to Justin Rattigan, vice president for Solid Cactus Inc. It is not uncommon for a consumer to abruptly quit a shopping session after learning the cost of shipping during checkout. Such sticker shock can be avoided by notifying customers of shipping costs as they place items in their carts.

One solution to further reduce sticker shock, especially for the most price-sensitive customers, is to offer several shipping options. In many cases, the options are centered around delivery time, e.g. delivery in three days, a week etc., as opposed to a selection of different carriers, though that, too, can be an option.

Solid Cactus includes a shipping module in its e-commerce platform that integrates with the fulfillment department and allows customers to check the cost of shipping through multiple carriers once an item is in the cart, rather than have a fixed shipping cost fed to them at checkout.

"It`s a way to create more interactivity with the customer and increase satisfaction," says Rattigan. "Personalization is about looking past statistical data on customers to identify shopping habits and using data to find new ways to sell product."

Many kinds of channels

Finding new applications for sales data is not the only way to create a more personalized shopping experience through integration. Linking the retailer`s online store with alternative sales channels, such as eBay, Amazon.com and affiliate sites is another option. Truition Inc. recently overhauled Sirius Satellite Radio`s e-commerce platform to provide a complete inventory management system across all sales channels.

The new platform enables the radio network to accurately track sales, fulfillment, and inventory in real-time, and adjust merchandising strategies across each sales channel, such as eBay and Amazon.com, which Sirius uses to facilitate sales of overstocks and product that has come to the end of its life cycle.

Sirius`s platform integrates into search engines to optimize results for Sirius and satellite radio products and directs customers to shopping sites. The platform also integrates with the sites of Sirius`s on-air personalities, such as Howard Stern and Martha Stewart, which also sell Sirius equipment.

"Introducing retailers to other sales channels, such as eBay and Amazon.com, under their own brand is a way to bring in more shoppers," says Butch Langlois, president and CEO of Truition. "To be truly multi-channel, retailers need access to customers wherever they go to shop on the web and manage those channels better."

Better management comes through access to real-time data, which platform integration provides. One drawback to a non-integrated platform is that data needed to validate or refute changes to the web site that will enhance the customer experience can be siloed within departments, according Junction Solutions` Haines.

Operating efficiencies

"If data doesn`t get passed along or gets lost, there is no way to know whether it all matches up properly with the proposed changes," she says. "E-commerce platforms need to break down the information silos through better integration so better decisions can be made in real-time."

To achieve the greatest return on investment, retailers need e-commerce platforms that create operating efficiencies. Integrating the back office functions to the online store helps achieve this goal.

The Schwan Food Co., for instance, worked with LaGarde Inc. to develop a platform that supported the testing of a line of gourmet foods which included such features as Build Your Own Meal and Meal of the Month. Once Schwan validated the business model for the new service, the grocer decided it needed to move to a more robust e-commerce platform that integrated its storefront to its back office functions, e.g. accounting, fulfillment, call center, etc., to preserve the efficiencies it expected to gain by selling online.

"The aim was to bring the cost efficiencies of selling online to the rest of the business by automating the entire handling, tracking and processing of the order," says Bob LaGarde, CEO of LaGarde.

Scalability and customer satisfaction

That level of integration made it possible for Schwan to synchronize its online and offline processes, including order details, inventory, and product and customer information. It also delivered a platform that is more adaptable to new initiatives.

"When those operating efficiencies can be extended across the entire enterprise, it not only makes the business more scalable, but it also helps boost customer satisfaction," adds LaGarde. "There is an opportunity in retailing to homogenize the technical requirements of an end-to-end platform solution to integrate back office systems."

Another advantage of end-to-end solutions is that retailers do business with a single supplier, rather than a multitude of vendors. This streamlined chain of communication lessens the chances for finger-pointing between vendors when something goes wrong, making it easier for the retailer to isolate the problem.

"Retailers are looking more to vendors to provide single solution platforms so they can identify what works and what doesn`t sooner," says Stephanie Leffler, president and general manger, Monster Commerce. "It is a consultative approach that provides more than just tech support from the vendor."

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