Transaction tool ties sales channels

Through in-store kiosks, Staples had already given shoppers the option of ordering merchandise from its Staples.com Web site and paying for it with their credit cards. The in-store access-point project involved making system changes to let those customers consolidate their Staples.com and in-store purchases into one transaction and pay with cash, check or credit card at the cash register.

As part of the project, Staples built a custom-configuration system that customers can use to design their own PCs at the in-store kiosks and on the Staples.com Web site.

The office supplies retailer also had to tweak the system so it could detect whether customers are using in-store kiosks so their orders can be held held until payment is received at the cash register.

Customers ordering merchandise at in-store kiosks print out a ticket with a bar code, which is scanned at the cash register. The cash register pulls the kiosk order information from the back-end order management system. The register then sends the payment information to the back-office system so that the order and payment can be joined.

The project was started in early 2000 and completed in the spring of last year. Staples made investments in software development, additional kiosks and site and network capacity to support volume.

Technology

Staples modified the Microsoft Corp. Commerce Server software powering its Staples.com site, its IBM AS/400-based custom-built order management system and its Windows NT-based point-of-sale (cash register) system, according to Michael J. Ragunas, chief technology officer at Staples.com. The IT department also had to build capabilities into its back-office systems to reconcile orders and payments and performed integration work to permit communication between systems that weren't previously connected, he says.

To enable customers to build their own PCs, Staples used a configuration tool from Calico Commerce Inc. in San Jose. The tool is based on San Jose-based BEA Systems Inc.'s WebLogic application server running on Windows NT.

Staples built an XML interface to enable the Calico tool to interact with Staples.com, which presents the information to customers via Microsoft's Active Server Pages. Completed orders are sent to the manufacturers via electronic data interchange from Staples' back-office systems.

Business benefits

When customers walk into any of Staples' more than 1,100 retail stores, they now have access not only to the 7,000 to 8,000 stocked items but also to the 50,000 offered through Staples.com. "We are offering a much broader assortment to customers in the stores," says Ragunas.

"The fact that you can consolidate your purchases and choose multiple ways to make purchases in the store puts them a level ahead at this point," said Geri Spieler, an analyst at Stamford, Conn.-based Gartner Inc.

Bottom-line payback

Staples has logged close to US$4 million in sales per week on the kiosks and eliminated its inventory of PCs in more than 200 stores, Ragunas says. With the custom-configuration system, customers get exactly what they want and Staples has reduced its PC inventory costs and freed space for other products, he adds. Customers using Staples.com in stores are more likely to also order merchandise through the Web site from their homes or offices. "We know that customers who shop with us in multiple channels spend more with us overall 2.5 times if two channels, 4.5 times if three," says Ragunas.

Lessons learned

"We've learned that integration is hard work," says Ragunas. "There are some technologies out there that can help, but it's still hard because most of what you're working with is legacy, and you have to figure out ways to make what you already have talk to each other."

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