March 31, 2010, 12:00 AM

Build or Buy?

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For example, Parentgiving cut its checkout process from five steps to two in less than a week, a task Maddox estimates would take a typical vendor at least two to five weeks. When the retailer recently decided to add a graphic at the top of each page to promote its money-back guarantee, staff completed the project in two days.

The talent and experience of those in-house staffers represents a risk, however. The handiwork of one I.T. staffer may be difficult for the next to comprehend, which can create problems if a programmer leaves. Programmers are taught to leave notes when they write code or customize programs, but many don’t, and the thoroughness of notes can vary. With that in mind, Maddox says he tries to make sure more than one person is always familiar with the ins and outs of the retail site as it grows.

Vetting vendors

There are also plenty of risks in outsourcing, and retailers have learned to vet potential vendors carefully. Hoch suggests calling customer service after 5 p.m. to see if they pick up. Tim Arnold, president of 2Bhip, a small accessories e-retailer with four employees, recommends speaking with someone besides a sales representative.

“The sales guys will tell you what you want to hear,” he says. “I would draw up a list of everything I need and ask to speak with someone more technical, like the person who will be answering in customer service when I call.”

When a retailer does land the tech guy on the phone, Arnold suggests asking about issues integral to its business-and to expect quick, clear answers.

“If you want to sell through eBay, ask exactly how the process is going to work. If you’re not getting a direct answer and they tell you they have to get back to you, run,” says Arnold, who uses e-commerce platform provider Zoovy to manage his web store. He adds that retailers should ask what level of service is included in the vendor’s fee, and what would cost more.

Another important fact to consider is how much time a retailer should plan to set aside to work with a vendor, says Robert Gilbreath, director of e-commerce marketing and analytics for “Ask if you need to be available for a phone call once a week or once a day-it makes a difference.”

Promises, promises

Cohn of Bakers asked the vendors on his short list to prove to him they could do what they promised. For example, Bakers wanted to offer complex promotional incentives such as “Buy a special occasion shoe and get 50% off a special occasion handbag,” something he couldn’t easily do with his former system. Cohn asked his finalists to go into their systems and show him how to add such a promotion. He’s glad he did. One finalist couldn’t do it.

Paul Zaengle, senior director of e-commerce for outdoor apparel retailer Columbia Sportswear Company, decided contacting the references supplied by the vendor wasn’t enough. He was considering the e-commerce platform of Demandware and found that Playboy Enterprises Inc. had moved its and e-commerce sites off the Demandware platform.

After Zaengle talked to Playboy and found the retailer was not unhappy with Demandware but decided to move for business reasons, he decided to go with the vendor for the Columbia site, which launched in August.

Zaengle adds it’s important for retailers to decide what they do and don’t want to manage. For example, Columbia wanted complete control over customizing and merchandising, but didn’t want to manage things such as server loads, bandwidth, PCI credit card security rules and the like. It went with Demandare because it offered Columbia access to the source code, enabling it to dabble with new merchandising, marketing and design features to its heart’s content, while Demandware manages the nuts and bolts.

Retailers that manage their own sites have to be just as careful when hiring technical personnel. For example, Parentgiving rushed the interview process and ended up hiring a programmer who didn’t work out. The process of letting him go and finding a replacement took about two months, Maddox says. On the second attempt, Parentgiving conducted several rounds of interviews, checked references more thoroughly and found a winner.

That’s learning the hard way that, whether a retailer outsources its e-commerce platform or keeps it in-house, senior staff must understand enough about the business to ask the right questions.


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