June 5, 2012, 1:16 PM

IRCE 2012 Report: Tips for managing technology budgets

Retailers Bluefly and Maggy London talk about managing their tech spending.

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At Maggy London International, launching a microsite proved to be a great way to start and test its initial e-commerce platform, said Gwan Yip, director of e-commerce, at IRCE.

At Maggy London International, a retailer of women’s fashion apparel, launching a microsite proved to be a great way to start and test its initial e-commerce platform, Gwan Yip, director of e-commerce, said today at the Internet Retailer Conference & Exhibition 2012.

“The best idea we had was to build a separate microsite that we used as a platform to facilitate discussions and learning,” Yip said in a session titled “Getting the most out of your technology budget.” “This simple and relatively inexpensive technology investment helped us do so much more in the initial phase, because it provides an environment to educate our stakeholders within a context they could understand.”

The microsite enabled Maggy London to test features and functionality before including them in a final budget for building out the full site at MaggyLondon.com, Yip said. The final site includes such shopping features as mousing over images to show the front and back of garments on models.

Yip added that working with outside consulting experts helped Maggy London build up its confidence that it invested in site functionality that supported how it prefers to engage online customers of its fashion apparel.

Matt Raines, vice president of technology at web-only retailer Bluefly Inc., who joined Yip in the session, said Bluefly has had success with a “bottom-up” approach that considers the needs of every department in the retail company before deciding how to allocate available funds, rather than taking a “top-down” approach that starts out with a fixed budget amount for each department.

Although each department must still make tradeoffs to choose projects that fit within the overall budget, he said, the bottom-up approach helps get people throughout the company more invested in the technology spending plan and working harder to support it.

Raines noted that it’s important for retailers to figure out what works best as criteria for measuring how much of a technology budget gets allocated to each department. At Bluefly, the retailer has allocated the largest share of its technology budget to technology personnel, at 2.3% of revenue. Next is capital expenditures for things like computer hardware and software, at 2.0% of revenue.

Bluefly operates three e-commerce sites: Bluefly.com, members-only apparel site Belle & Clive, and Eyefly.com, which is a joint venture eyewear retail site Bluefly operates with eyewear company A&D Labs. Raines noted that Bluefly.com and BelleandClive.com operate on the ATG e-commerce platform from Oracle Corp. But Bluefly wanted to operate the Eyefly joint venture separately, and opted for the Magento Enterprise platform, Raines said. He added in a brief interview following the session that Magento, a unit of eBay Inc., offered a relatively easy and fast way to launch an e-commerce site compared to other platforms Bluefly reviewed.

Bluefly is No. 179 in the Internet Retailer Top 500 Guide

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