BabyAge will remember 2005 as a year of overcoming adversity
As BabyAge.com closes the books on 2005, web sales will increase by about 10% to around $25 million.
But 2005 will also be remembered as the year the online retailer coped with a number of major challenges, including a move to another state, a major failure in newly installed third-party warehouse and order management software and large staff turnover.
To increase the size of its corporate headquarters, BabyAge, No. 194 in the Internet Retailer Top 400 Guide to Retail Web Sites, moved in January from its old headquarters in New Jersey to a bigger office and warehouse space in Wilkes-Barre, PA.
But at the same time the company was relocating and adding new staff to replace employees not making the move, BabyAge was also coping with major back-end systems problems. “These problems almost put us out of business,” says CEO Jack Kiefer.
For the first time, BabyAge chose to install new third-party software to replace the company’s internally developed and maintained order management and warehouse platform. From the start, which began at the end of 2004 and lasted until BabyAge went back to its older legacy applications in February, the installation was plagued with problems, Kiefer reports.
The new software couldn’t access BabyAge’s payment processing gateway so credit card transactions weren’t being processed correctly. BabyAge also had trouble reconciling inventory and tracking shipments. For instance, BabyAge often shipped multiple orders to the same customer instead of a single order. “We had multiple problems that cost us a lot of business,” Kiefer says. “At the height of the software problems, we were averaging a return rate of close to 18% compared to our usual rate of about 2%.”
Kiefer says his internal information technology staff along with engineers from the third-party software developer worked for weeks to fix the problems. But in March, BabyAge stopped running any third-party order management software and instead updated its older internal legacy applications. “We’ve since updated our original platform and order processing and fulfillment is once again running smoothly,” Kiefer says.
BabyAge chose 2005 as the year to upgrade systems and move to a bigger facility in large measure because the company needed a better foundation for growth, he says.
With most logistical and operational issues now resolved, Kiefer says BabyAge will head into 2006 with a number of new initiatives such as programs that allow customers to personalize their purchases. “We’re looking at good growth in 2006 now that our software problems and the corporate move are behind us,” Kiefer says.
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