These days, online retailers are focusing primarily on profits, a distinct shift fromthe philosophy embraced in the dot-com heyday, Bart Lautenbach, director ofWebSphere Commerce, told CRM Buyer Magazine.To reach their goals, this new generation of Web merchants is taking a moreforward-looking approach, adopting practical technologiesthat allow them to better automate order management, for example, or that providecustomers with a real-time look at their inventory.
The Lillian Vernon store, for example, decided it needed to concentrate onthe order managementpiece of its online operations to increase profits. “Previously, customers would seesomething online and then call in to purchase it. By putting most of its catalog onlineand automating order management, the company was able to decrease administration costs by30 percent,” Lautenbach said.
Integrating into the Back End
To meet its self-imposed order and inventory management challenge, Lillian Vernondeployed WebSphere Commerce, an e-commerce platform designed for small andmid-size retailers.
The main focus of WebSphere Commerce 5.4 — the latest version was releasedin March — is to help retailers become more profitable by better integrating inventoryand order management for both business-to-consumer (B2C) andbusiness-to-business (B2B) operations.
It does this through real-time inventory features that allow B2B andB2C Web sites to representin-stock items in new visual ways — specifically, letting shoppers see online merchandiseavailability as they would on a store rack, Lautenbach said. Also,WebSphere Commerce’s advanced order management automates the order process,allowing customers to track expected ship dates easily and process backorders automatically.
Perhaps just as important, WebSphere Commerce provides new links toretailers’ back-end systems, allowing for a more seamless view into related databases andlegacy systems. In June, IBM introducedIBM CrossWorlds Extender for WebSphere Commerce, a product that focuses onprocess-to-process communication for the mid-size companies that already useWebSphere Commerce, but have not yet hooked up their back-end systems totheir e-commerce software.
Basically, it allows a user to communicate between industry or best-of-breed processes inWebSphere Commerce, mapping them to processes in back-endenterprise resource planning (ERP)systems.
“Such a level of integration has become the defining competitive advantage for this nextgeneration of online retailers, such as Lillian Vernon,” Lautenbach said.
The Future of E-Tail
The integration of back-end systems will be a key goal for online retailers over the nextfew years, agrees AMR Research directorKimberly Nickle.
In the early days of the Web, e-tailers neglected to focus onprofits, and online retail sites were mostly duds, Nickle told CRM Buyer. However, becauseonline shopping was a novelty, consumers accepted its limitations.
These days the novelty of shopping online has worn thin, andconsumers are quick to abandon Web sites where theyhave to wade through page after page looking for a particular item,only to find it out of stock near the end of the purchase transaction.
“It is no longer acceptable for a consumer to go to a Web siteand not be able to see if inventory is available in real-time ornot be able to purchase and pay for a product in onetransaction,” Nickle said.
According to Lautenbach, WebSphere is able to handle the volume ofSKUs (unique product numbers for stock-keeping units) Lillian Vernonhas placed online — some 6,000 compared with the Web site’soriginal 1,500 — because of the relational database that underpins the platform.
Also, the CrossWorlds acquisition and subsequent product releasewas key to this operation, Lautenbach said. “Its prebuilt adaptersfor ERP systems bring inventory and customer data into the Web-based,customer-facing processes.
“Because Web commerce sites are becoming more integrated into theiroverall IT strategies, there is a real need for multipurpose platforms.”