PRG channels harmonise with WebSphere

Pacific Retail Group is betting on IBM’s WebSphere suite of products to take its stores into the 21st century by fully integrating its on-line presence with back-end store systems...

In the coming years WebSphere will seamlessly support the on-line and back-office business at Pacific Retail’s brands Noel Leemings, Bond & Bond and home computer retailer Big Byte. “We’re really just changing the wrapper. The real benefit is to be able to personalize it,” says Pacific Retail's general manager of IT, Brent Powell (pictured right).

For the wider PRG business the involvement with the failed Flying Pig on-line operation was the pain before the gain. “The main thing we have left from the Flying Pig days is the learning. There’s nothing left from the design or infrastructure we used to have,” says Mr Powell.

Unlike Flying Pig, PRG’s latest move is supportive of both clicks and bricks – while reflecting what’s going on at the literal storefront and plugged into back-end systems, the virtual shops will add value with special offers and packages.

PRG has essentially gone back to basics, looking at the needs of the organisation, how it can leverage it’s existing technology by automating processes and then looking for the right suite of applications to take it into the future.

Noel Leemings was first on-line in early August paving the way for other brands to come on-stream quickly. Underlying technology at other retail outlets owned by the umbrella group is pretty much the same so there’ll only need to be modular changes, for example swapping out Noel Leemings Fly Buys loyalty system for Bond & Bond’s QuantasTelstra points.

PRG has installed Websphere Application Server (WAS) – a ‘B-to-any’ backbone and WebSphere Commerce Suite (WCS), essentially a shop-in-a-box tailored to make it look like a Noel Leeming shop front.

The biggest challenge was ensuring WebSphere was the best fit to integrate with PRG’s ‘heritage’ I-series AS/400 platform. IBM New Zealand relied on resources in Australia to integrate WebSphere into this environment as all the previous local installations had been on Windows NT.

The goal is to elevate Noel Leemings on the web for example to ‘front of mind’ perception by making the shopping experience easy and pleasant. “We’re benchmarking ourselves against the US and European environments. For every dollar we sell on-line we believe we’ll get a dollar in the store as a by-product. Some US retailers are now getting $6 in the store for every dollar spent on the web simply because it drives that kind of business to front of mind.”

“You should expect to be treated as well in-store, over the phone or on the internet site,” says Mr Powell.

The new web site will help maintain consistency of treating customers and maintaining customer ‘intimacy’. “We can develop relationships with customers and customise what people want. Through our internal CRM we can determine what Mrs X might like to hear about next. The Bond & Bond brand however, is more about operational excellence and getting the best value.”

The PRG technical team is currently working on the Bond & Bond site, planning to use the on-line auction capability of WebSphere Commerce suite. “If we have an excess pool of stock because of model changes we can move that out through the Bond & Bond internet site. Then through the Big Byte development, which is our home computer store model we’ll hopefully develop what is hopefully the equivalent of a Dell in New Zealand where people will come on-line and build their own PCs at a component level,” says Mr Powell.

The Bond & Bond site, including the auction capabilities is expected to be live by Christmas.The future of the group‘s Computer City outlet, which has operated as part of Noel Leemings, will also be bought into the WebSphere environment although it’s not clear whether it will continue to operate independently or be integrated into the Big Byte brand.

Big Byte's has premises in Christchurch and Palmerston North and will grow to include outlets in Auckland, Botany downs and Dunedin before the end of the year. The Big Byte computer store is expected to have its own web presence by next March.

Further up the chain...

Having launched the first in a series of smart web sites hooked seamlessly into its back-end systems PRG is already preparing for the next step, to get closer to the partners in its supply chain.

The next link in the WebSphere chain will be a move up from version 5.1 to version 5.4 of the Websphere e-commerce and integration suite, which is more focused on business-to-business activity.

“We’re planning that upgrade now but I am reluctant to make that level of change this side of Christmas - for a retailer Christmas starts the middle of October. In the new year though we’ll hit the ground running using WebSphere in a business-to-business sense,” says Pacific Retail's general manager of IT, Brent Powell

“We’ve also been a strong user of Lotus Notes and within IBM it’s being pushed toward WebSphere portal services. We’ll have a basic infrastructure of WebSphere application server driving business to customer, business to business and business to enterprise activities for the entire group.”

Rather than simply being outwardly focused the move to the net has helped tighten up internal processes and procedures, particularly from a marketing and merchandising perspective where standardised product descriptions are being implemented.

Once the internal systems and processes are in place they can easily be replicated across the group and provide a template for dealing with suppliers in the future.

An introduction to wider use of the technology outside the immediate group will come in mid-September this year when PRG takes its hire purchase system on-line. The group writes hire purchase agreements for its own stores and an number of third party merchants. Currently HP applicants have to fill out forms and wait up to half an hour for approval. The new web-based approach will automate the process with a ‘decision engine’ enabling approval in seconds.

Integration essential for on-line success

Many web shop fronts have failed to make an impact or deliver return on investment because they’ve not been integrated with back-end retail management systems, suggests Pacific Retail's general manager of IT, Brent Powell.

“A lot of companies have failed in the past because they’ve not had a management system or billing process behind them but we’ve got nearly 20-years of experience with this,” he says.

PRG decided to go for a full e-commerce solution in February last year and embarked on business case study and selection process after evaluating similar systems used by Macys, Sears and Amazon.com in the US.

Detailed specifications were completed by September and the build process began in December. It took 14 weeks - the equivalent of two man-years of activity for the team at PRG and IBM - to get the system ready for operation.

“We needed to have Websphere and AS/400 seamlessly integrated into our environment so the workflow process operated between the WebSphere Commerce Server (WCS) store and our back office systems.”

When someone places an order through the WCS shop the transaction is immediately fired off to the Direct Payment Solutions (DPS) internet clearing bank, and once approved comes back and automatically generates an internal customer order for delivery or collection. It debits the stock or reserves it and there’s no manual process until it is handed over the customer.

The system automatically tracks orders, updates catalogues and handles on-line payment processing.

“We’ve gone into this with a clear goal of driving additional bottom line revenues within a cheaper cost model. The savings will mainly be in turn around time, greater throughput of transactions and not losing clients who ring off because we’re too busy to handle their inquiries,” says Mr Powell.

By Keith Newman

August 2002