The e-retailer reports a $126 million net loss, stemming from a $640 million year-over-year increase in spending in the quarter on technology and content ...
Faced with the need to quickly set up an e-commerce site, the merchant decided to do the work in-house, reducing costs and better enabling its mix of customers to have an efficient shopping experience.
Pressured to quickly set up an e-commerce site, Advance Auto Parts decided to do the work in-house, reducing costs and better enabling its mix of customers to have an efficient shopping experience.
The Virginia-based retailer of auto parts last year lost access to the shared platform through which it sold its products when a competitor bought the site, requiring Advance to quickly create a new e-commerce site. "Time was the critical element," Scott Bauhofer, the retailer`s senior vice president and general manager of e-commerce, said Monday during the pre-conference workshop at Internet Retailer`s Web Design & Usability 2010 Conference. "We didn`t want to go dark."
Advance, which operates 3,400 stores, assembled a design team by late spring of 2009, and the team worked toward an Oct. 5 launch date for the new, independent site. Advance had considered buying a platform, or outsourcing most of the work, but decided against it. "Our business is unique and complex," Bauhofer said.
Part of that complexity comes from the mix of consumers served by Advance, which sells parts to customers doing their own auto repairs along with commercial shops that need parts right away. Additionally, the retailer`s supply chain includes parts kept in Advance`s stores and parts kept at distribution centers. The retailer sells parts that typically are useful only for specific makes and models of vehicles, adding further complexity. Advance carries some 100,000 SKUs.
Advance tried to turn such challenges into advantages when performing the web-development work in-house, said John Ware, Advance`s director of e-commerce design, who joined Bauhofer in the conference presentation. For instance, having the retailer`s design team work closely with the business team cut down on costly missteps and tightly integrate the brand into the site. This also produced a wide-ranging sense of ownership among the various teams involved in the web site launch.
Farming out the work would have resulted in higher up-front costs, plus continuing expenses for ongoing support, Bauhofer said. With an in-house team working on the site, costs have come down gradually as the in-house team, which includes at least four key positions, regularly upgrades and improves the site.