Opportunity Wales Advance. ecommerce Case Study Publication

Transcription

1 Opportunity Wales Advance ecommerce Case Study Publication The Basket Case Document Change Control State Version Date Comments Registered Awaiting confirmation Draft Awaiting review by Client Draft Changes requested by client added Draft Additions made at suggestion of ecic Possible values for State are: Draft, Final and Approved Opportunity Wales csp_the_basket_case_v0.3_final.doc

2 Case Study Overview The Basket Case, Newton, Porthcawl. The one stop on line shop for superior gift baskets The business idea was high quality themed gift baskets, sold on line. Research showed that although this concept was well established in the USA, in the UK it was still only a market space, waiting for businesses and customers to fill it. So, the business was established as a partnership, the market sectors and product range were decided, stock was purchased and finished products assembled in order to take photographs, and after significant research, a Web site developer was selected. The two partners work in the business on a part time basis, and they will move towards full time roles as the business develops. During an Opportunity Wales review the lack of UK competition was confirmed, the modelling of the business based on established businesses in the USA was confirmed as a valid idea with great potential, and the professional production of other Web sites by the developer to be selected was also confirmed. An idea presented during the review was to have a stock control system, because the complexity of the product range indicated it could be quite difficult to maintain adequate raw material and finished goods stocks in order to meet delivery lead times. Further, linking incoming orders to the stock system was also suggested to avoid the lengthy process of keying in materials information. After a faltering start to the Web site development, the Web site was developed and went live in early December During the development the site underwent a number of changes, not always as rapidly or smoothly as the partners would have liked, and observations from the Opportunity Wales advisor were helpful in supporting the direction the partners wanted to take the site in these were mainly in connection with look and feel, and the quality of pictures on the site. At the time of writing this Case Study the site is live and achieved its first order after being live for 3 weeks. It was being recognised already by Search Engines after only 3 weeks, and the stock system has been written in Access by the father of one of the partners, and is about to be linked to the incoming orders from the Web site. The Basket Case can be found at: - Opportunity Wales csp_the_basket_case_v0.3_final.doc

3 ecommerce Case Study The Basket Case at The Wild Bunch The one stop on line shop for superior gift baskets Author: - Andy Sinden Horwood International Opportunity Wales csp_the_basket_case_v0.3_final.doc

4 Contents Introduction...3 The Company...3 Existing Technology...4 ecommerce Solution...5 Benefits...8 Lessons Learned...8 Remote dealings...8 Specification...9 Summary...9 Deleted: 6 Deleted: 7 Deleted: 7 Deleted: 7 Deleted: 8 Opportunity Wales csp_the_basket_case_v0.3_final.doc

5 Introduction This case study is based on work undertaken as part of the Opportunity Wales Advance ecommerce project funded by the Wales European Funding Office Objective 1 initiative. All information is published with the full approval of the SME concerned and this particular case study was written by Andy Sinden from Horwood International. Opportunity Wales case studies provide detailed descriptions from a wide range of small businesses in the Objective 1 areas of Wales. They cover not only success stories from ecommerce but also the trials and tribulations and the hard work which successful SMEs often have to face. The Company The Basket Case was established as a partnership, with 2 partners working part time in the business, in the mid summer of 2004, to sell themed gift baskets with the Internet being the prime route to market. Around the time of the formation of the partnership an Opportunity Wales Advance ecommerce review was carried out and advice and observations were provided on the ecommerce approach of the business, including back office systems to help improve administrative efficiency. Customers are mainly people with credit cards, so probably from 18 years old upwards, wanting to buy gifts for a wide range of friends, relations, employees and customers. It is anticipated that most business will be Business to Consumer (B to C), but with some Business to Business (B to B). Hotels buying baskets for residents would fall into this latter category for example. The name of the partnership The Wild Bunch is derived from the trading name of one of the Partners, being a florists shop called The Wild Bunch. It was decided to use the name for the partnership as it stands out from the crowd, has a wide appeal, and implies creativity and action. Also, as the Partnership will eventually be selling flowers from its Web site, the name remains appropriate. At the moment there is little competition in the market for gift baskets, but it is a big and growing business in the United States. So in the UK it is felt there is a latent market for these products, making it a market-space rather than an existing marketplace in the UK. A number of companies in a similar space provide gift boxes or hampers, which are not really in the same product category. Opportunity Wales csp_the_basket_case_v0.3_final.doc

6 Although sounding a simplistic product offering, with around one dozen themes, several baskets in each theme and components per basket, managing stock levels is far from being a trivial activity. Themes include the following, for example: Golfing, where contents include chocolate golf balls, tees, a miniature book, and a mug Fishing, where contents include white chocolate maggots and chocolate worms Ladies spa, where contents include items such as bath goodies New home Happy couple Baby Gardening TV sports The baskets are priced between to The flower range on line will present a range of choices, with visitors able to select from pictures showing different styles, colours and levels of price. The containers themselves are purchased from the USA, over the Internet, following research by the partners, with components being bought in from a variety of suppliers scattered throughout the UK with whom orders are placed by various means. Existing Technology In the early days of the partnership, technology (laptop PCs, a digital camera, and a printer) was used on an as required basis being borrowed from the other businesses of the partners. Both partners were experienced in the use of the Internet, and reasonably computer literate but without being technical experts. Connectivity to the Internet was via ordinary dial up modem, and this was used for researching American basket sales businesses and potential Web site developers for The Basket Case Web site, for example, as well as locating and corresponding via with some component suppliers and then Web site developers. A digital camera, was used to take photographs of baskets which were then used on the Web site. The first set of pictures were taken by one of the partners, who was not a professional photographer, but eventually a photographer was used to ensure a good and consistent quality of picture. The original pictures suffered from poor lighting conditions, making the pictures too dark and showing insufficient contrast between the different items. At the time the partners accepted the results because they had not appreciated the improvements that were possible. Opportunity Wales csp_the_basket_case_v0.3_final.doc

7 Once initial stocks had been purchased for basket assembly and photographs, efforts were made to sell the stock through advertorials paid for editorials appearing in a South Wales newspaper, but without success levels that justified the costs. ecommerce Solution As with many new businesses, a low cost approach to start up was required and the Web developer recommended using a no cost shopping cart approach, with This is a USA based business, providing a professional shopping cart facility at no cost, so reducing the cost of an on line selling site by several hundred pounds as the cart software did not have to be purchased. Presumably the vendor makes money from commission on sales made through the sites of cart users that also use the shopping mal to sell from. The Basket Case Web site is very well constructed, intuitive to use, and has a very nice look and feel, as can be seen from the screen shot of the home page below: Opportunity Wales csp_the_basket_case_v0.3_final.doc

8 The site allows visitors to quickly find the basket theme they are interested in, make a selection, then they enter personal and payment details on a secure server. The orders are polled by the partners from the mal-e.com Web site and received as s direct from the e-mal secure server. Credit card details are entered into a PDQ machine, which was already in use in the flower shop, and already able to process buyer not present transactions. However because selling was to be carried out over the Internet a new merchant account number was required obtained by application to the merchant services division of the bank, which was done by the local branch on Thw Basket Case s behalf. Transactions are validated in the normal way with the credit card company giving an on line validation as part of the card detail entry process. The orders are then made up and despatched by post or courier depending on destination. Deleted: and Opportunity Wales csp_the_basket_case_v0.3_final.doc

9 An alternative to the PDQ machine would have been to sign up to a payment gateway, which transfers funds directly to the company bank account, albeit at a price, using the e-mal.com premium service for an additional $6 per month. Protx is one of the lowest cost payment gateways with fixed charges of per month, and 10p per transaction if there are more than 1,000 transactions per quarter. Clearly the costs of this kind of service have to be balanced against the time spent keying information into the PDQ machine, and in a small business they could easily represent a significant and avoidable overhead. Payment gateways served by male.com include all the major players such as Paypal, Protx, Verisign and Worldpay. Surprisingly, the cart software also provides for an easy to use export of order information for automatic import into stock control systems. For the technically minded, this is in flat file format and therefore easily imported via a simple manual transaction into the Microsoft Access based stock control system used by the Basket Case. To have an automatic update without manual intervention could cause security problems. Once the orders have been input to the stock system, an enquiry is run to find out if the baskets orders are already made up or whether they need to be made. The system also, because a Bill of Materials (list of components required) for each basket exists, along with the supplier of each, informs the business if orders are required for component stocks, and the suppliers the orders should be raised with. When finished baskets are made up, or components arrive into stock they are entered into the system to ensure it is kept up to date at all times. Deleted: A key element in the Web site was the way the page text and key words were built up, in order for Search Engines to easily find the site. These were developed based on the following advice from the Opportunity Wales advisor: Each page should have a description of up to 16 words (56 are allowed), and a list of key words (Meta Tags) should also be put together for each page. Key word lists should vary at least slightly from page to page, reflecting the page content where possible, and should contain a text string from the page description. Formatted: Font: (Default) Arial The Wild Bunch should put the page description, key words, new pictures, and any new page text together, giving them to the site developer for inclusion on the site as it is developed. It is recommended that some of the key words are strings of text appearing in the page content, particularly at the beginning of the first paragraph of text seen by users on each page ensuring that technically and market sector relevant words are used. Opportunity Wales csp_the_basket_case_v0.3_final.doc

10 Benefits The main benefit of this online business is that is open 24 hours per day, 365 days per year. This means that visitors can take their time browsing and deciding which particular gift they would like to send, rather than have to shop for it during a lunch break or rush to the shops before they close at 5.30pm. It is unusual for a small business like this to have a stock control system in place, but it is acknowledged by the Partners that even though we ve not sold that much yet, it s obvious now that it would be really difficult to control stock without the system. A key benefit of the strategy to keep costs down is that it has only cost around 1,300 to get the site in place and operational. The shopping cart software was obtained at no cost, and the stock control system was written by a relative of one of the partners in Microsoft Access. All photographs were initially taken by one of the partners, so avoiding the cost of a professional photographer, although eventually there had to be a re-shoot which was done by a student, so continuing to minimise costs. Support provided by Opportunity Wales was over an elapsed period of approximately four months but carried out in 4 man-days of time Deleted: Deleted: The Partners were also very pleased that the new site was beginning to be recognised by the Search Engines after just three weeks. One reason, apart from the structuring of the Key words, for this is no doubt because this is not a very cluttered market yet, so the combination of words used will not be very common. Lessons Learned Remote dealings Throughout the whole process of Web site specification, development, and acceptance there were no meetings between the Basket Case partners and the Web site developer. This had positives as well as drawbacks: On the positive side, time was saved by both the developer and the partners by not having to attend meetings Also on the positive side a developer was located whom it would probably have not been feasible to meet as she was based so far from the business On the negative side, there were times during the development of the Web site when the rapport between developer and the partners could have been better, and it is likely that the relationship would have been better if there had in fact been meetings Finally on the positive side it proved useful for the Opportunity Wales adviser to become involved in helping resolve certain issues as an independent 3 rd party and help clarify things for both the developer and the partners Opportunity Wales csp_the_basket_case_v0.3_final.doc

11 Specification It would have been helpful if the look and feel of the Web site - the colours, logo, and navigation buttons had been formally and finally agreed and signed off before the bulk of the site had been developed. Because this didn t happen, there were many s exchanged with the developer regarding these things, which became quite frustrating for both parties, with many minor changes being requested over a period of time. Similarly, at one point the partners were disappointed with the quality of appearance of the pictures on the site, having only been given the opportunity to see them when nearly all the pictures had been uploaded. It was acknowledged by the developer that the original picture quality had not been good and that all she could do was to work with the material she had been presented with. It would have helpful if: The developer had told the partners that the picture quality was not very good when she first saw them The developer has put in place on the site just one picture so the partners could view it and see for themselves that the quality needed improving The partners had taken just one or two photographs to begin with, sending them to the developer to ask if the quality was sufficient, then making any changes to the approach to photography that were required In the end, all photographs had to be re-taken, then re-loaded to the Web site, which caused all parties frustration and extra time to be spent on the project, with a photographer carrying out the re-shoot. Summary The Basket Case is now an operational business, successfully receiving orders on line, from a very easily useable and very pleasantly appearing Web site. This would appear to the first business of its type in the UK so is ideally placed to become a key occupier of this market space. It is inevitable that competitors will appear over time, but The Basket Case has time to become established beforehand. Although the Web site took longer to go live than had been expected, the level of attention to detail, and the ability of the partners to persuade the developer to make changes she had not been expecting, has resulted in a high quality Web site that is thoroughly professional in appearance. Opportunity Wales csp_the_basket_case_v0.3_final.doc

12 Finally, the introduction of the Stock Control system and linking it to the incoming orders from the Web site is already saving time and as the business grows will help reduce the need for administrative employees keeping down the costs of the business and making more creative time available to the partners. The Basket Case can be found at: - Opportunity Wales csp_the_basket_case_v0.3_final.doc