| Backbone TV |
NEW Geoweb video
|
|
|
| Stocking The Office |
May 6, 2003 |
By Paul Lima
Buying office supplies was a chore for Lynda Morris. She didn’t want to spend productive business hours shopping, which meant she would often rush out in the evening when she’d rather be unwinding. Today, the president of NicLyn Computer Consultants in Toronto shops at Staples.ca, from the comfort of her office.
“When I heard they’d deliver the next day, I was there,”Morris said.
The recent dot-com implosion hurt the reputation of online initiatives, but Morris is part of a business-to- business ( B2B) trend that has businesses embracing electronic commerce, especially when it comes to buying easyto- ship office supplies from companies such as Grand & Toy and Staples/ Business Depot.
In fact, if anything, the decline of the dot-coms has benefited both Grand & Toy and Staples. As dot-com dabblers disappeared, businesses looked for secure companies from which to procure their supplies. “Trust and confidence are important factors in ecommerce,” said Martin Wales, president of CustomerCatcher.com, an independent consulting company with offices in New York and Toronto, which helps businesses develop customer acquisition and retention strategies.
Said Rick McKay, Grand & Toy vicepresident of marketing: “The no-name dot-com companies that were kind of cool dropped off the roller coaster like flies.We believed the ultimate win would be the combination of bricks and clicks—the brands with equity and trust.”
Grand & Toy has been conducting business electronically since the mid- ’80s. Before the company launched grandandtoy. com, e-commerce initiatives included the now defunct Alex terminals from Bell Canada. Alex was an early online information transmission device.
When it moved to Web technology, the company’s corporate clients moved easily as well, but the ease and convenience of the Internet has also helped Grand & Toy attract smaller businesses.
Online sales have also been beneficial for Staples, but its customer gains have been in an opposite direction. It has built on its established consumer base by appealing to larger corporations which use the Web to comparison shop.
The retail/online link The Web work carried out by both companies is paying off.
Grand & Toy’s e-commerce business increased by 25 per cent in 2002, to $185 million. Sales conducted via grandandtoy. com grew to 30 per cent of all transactions in 2002 from 26 per cent in 2001, according to McKay.
Staples doesn’t separate retail and e-tail numbers, however online growth is running in “triple digits” since the company converted its Web brochure site into a fully transactional ecommerce site in March 2000, said Steve Matyas, president of The Business Depot in Canada.
And while online sales are increasing, they are not cannibalizing store sales.
Luring customers online is the opposite of cannibalizing, Matyas said, noting Staples has moved many customers who previously phoned and faxed in orders to its Web site. The Web also means less data entry for customer service staff.
E-commerce has also made it feasible for bricks and mortar companies like Grand & Toy and Staples to expand their reach into less-populated areas without the expense of building new stores.
Since launching its Web site in March 2000, Staples has experienced significant sales increases in northern Manitoba and northern Alberta without building new retail outlets, Matyas said. Even with shipping costs, prices for office supplies delivered to remote areas can be lower than those at local office supply stores because of Staples’ buying power.
And there are other benefits to the sellers. It costs about the same amount to pick, pack and deliver a $10 order as it does a $100 order and both companies have seen the average value of delivered orders increase since launching business online.
In addition, adding online transaction capability was a minimal investment for both companies, since they already delivered catalogue orders and did not have to build back-office inventory or picking, packing and delivery systems.
New-world conditions
Matyas said there were some surprises to online retail. For example, a glowing review of a new technology product could cause three days’ worth of inventory to disappear in less than a day, as it can take interested buyers a few days to travel to a store but that same group can click a ‘Buy’ button over the course of a few hours.
Initially, Staples only updated online inventory indicators once a day, which meant shoppers could have been placing orders for out-of-stock items. “It was a nice problem to have, but not from a customer’s perspective” as it eroded trust, Matyas said.
To fix that, Staples now updates inventory online in real time.The company also extended its price match guarantee to the Web (if a customer finds an identical item with a lower price within 14 days, Staples will match the price), as well as its guaranteed next-day delivery (for orders placed within local trading areas by specific times), and implemented a no-hassle refund/exchange policy.
Grand & Toy offers similar delivery, refund and exchange policies. However, unlike Staples, which has uniform national pricing, Grand & Toy negotiates volume-based price discounts with its customers.That requires a more sophisticated back-office system; customers have to open accounts before they can shop at grandandtoy.com.
The Grand & Toy enterprise resource planning ( ERP) system identifies customers when they log in, and the back-office system ensures customized pricing is displayed, said John Melodysta, Grand & Toy’s vice-president of information technology.
The system also presents each customer with a customized “set of privileges” that include maximum value of orders allowable, a secure override authorization process for orders that exceed the maximum, approved methods of billing, standing orders of products to be delivered on a regular basis and other options.
Even though the debris of the dotcom bomb still clutters the stock market and the economy, both Staples and Grand & Toy have declared their online e-commerce forays a success, demonstrating that bricks and clicks can coexist profitably within a business.
|
|
|
| Green Innovation |
|
|
| Top 300 Issue |
 
|
| Gadget of the Week (Canadian) |
|
Pick the best 3G for you
RIM Blackberry Bold
Choosing the right smartphone is an important decision, and here’s the good news: while both the new iPhone and the Bold are excellent, the feel is entirely different, making it easy to choose.
more>>
|
| Gadget of the Week (Japanese) |
Sounds of Japan
Why record just the visual when you can capture the sounds as well.
more>> |
| Backblog RSS feed |
Click to subscribe  |
|
sponsored by 
