FRAMINGHAM (03/10/2000) - When Adolph Coors Co. in Golden, Colo., rolls out its merchandise catalog to beer distributors via an extranet next week, it will look just like a regular merchandise store on the front end. But on the back end, pieces of the orders will stream from a shopper's cart to some 60 vendors, each responsible for providing specific products, such as T-shirts or hats.
Routing the orders to separate vendors for drop shipment to customers is handled by a bridging technology developed by Digital River Inc. The Minneapolis-based firm also hosts Coors' new catalog site.
Dave Reid, manager of CoorsNet, the network that links distributors to the corporation, said Coors chose to outsource the site because Digital River's business-to-business order system was ready to go, and it simply didn't make sense to reinvent it.
Coors had been using an expensive printed catalog to sell branded merchandise to distributors, Reid said.
"Today, if someone has to order three hats, three shirts and a golf bag, they probably have to make three phone calls. With the online catalog, they can put them in one shopping basket. Digital River splits them out," Reid said.
Matt Voda, senior director of marketing at Digital River, said the company's proprietary licensed vendor system treats each of the Coors merchandise vendors as a single store and then displays all the vendors as a collective on the catalog site.
"There's one shopping cart, one set of order management tools, one shipping engine and one taxation engine," Voda said. The shipping engine can be configured to ship from multiple warehouses or different warehouses for the same vendor to reduce shipping times and cost, Voda added.
Coors' decision to outsource follows a trend that Ted Schadler, group director for business-to-business strategy at Forrester Research Inc. in Cambridge, Mass., calls exIT, or external IT. "It's where the technology is external and can be shared [by different companies]," Schadler said.
For Coors, selling commercial merchandise makes good business sense. It reinforces the Coors name, Reid said, and could turn a break-even business unit into a better profit center.
"It does a little better than break even today. It has the potential [with the online catalog] of making much more income," he said.
Coors will offer merchandise both online and through the printed catalog throughout the year, Reid said. But he said he plans to cut the usage of the printed piece. "Hopefully, we'll be able to cut the number [of catalogs printed] in half next year," he said.
Reid said he anticipates that Coors will increase merchandise sales through the online catalog by adding promotions on the fly - an approach that isn't cost-effective in print.