Introduction
Staples.com is an online store for office products and a source of other office solutions. It provides furniture, affordable copy and print services, office supplies, technology to offices and boardrooms through its online ecommerce site which was created and operationalized in 1986. Since its inception, the firm’s internet sales have reached $25 billion and rank behind Amazon in terms of online sales (Staples.com, 2016). Staples.com has its headquarters in Boston United States of America. Today it has presence in Americas, Europe, Asia and Australia meaning that the firm serves diverse customers of different demographic profiles.
This is a report of the historical background of Staples Online business strategy. In particular, it focuses on the historical background of the company’s IT infrastructure before the arrival of Dave as the CIO, the thematic areas of concern for the CIO, the management information system status of the company and gives conclusion by identifying areas that the company needs to focus on.
Historical background
Staples.com has been expanding its online presence through acquisition of other online stores. While its physical stores sales continue to remain relatively flat over the years, its online store business continues to grow and this has accounted for nearly half the total of the company’s sales. The company continues to target entry to new markets through acquiring startups operating in these local economies. Across European countries and other places the company has presence; it continues to partner with other online ecommerce sites who act as their online representative stores (Anon, 2016). The company has been much aggressive to expand its online business through implementing mergers and acquisition of small online sites that have operations in the new markets it’s planning to enter.
The retailer, Staples.com, has over the last couple of years engaged in research through its innovation center and has built its own shopping platform. Despite the existence of off-the-shelf solutions and tools that the company could acquire to develop its online shopping experience for its customers, the company has focused on it’s in built customized intelligent framework through which it uses to build personalized online experience to the visitors of its online stores. The professional tools through which a company can use to develop the online store have been integrated with Quill framework to create a new experience site for Staples internet business. For staples, it has preferred to stick to its platform built by its programmers.
The company has a new development center through which it aims at coming up with the best solutions for internet commerce. This new center is an addition to its innovation center in California and it complements the already existing efforts to revamp the website over which the online business of the Staples takes place (Anon, 2016).
The company has engaged in building a European online store that it aims to roll out in the last quarter of 2015. The CIO has noted that over the years, Staples need not only focus on the physical outlets that it has for its European market but also have an online store that will focus on bringing personalized shopping experiences to the European markets. To do this, Staples IT staffs have combined ERP modules that are new and old to come up with a framework through which they will build a personalized site for the European markets.
Thematic areas
The company has identified the following thematic areas as the most relevant and whose efforts it will focus on.
Personalization of its ecommerce site
This is how internet commerce significantly improves online shoppers experience by offering more relevant help in the form of better search results, product descriptions that are more accurate and recommendations to related products. Having personalization in an ecommerce site, a company is able to build relationships with its customers that are long term and the conversion rate is highly improved. Staples views this as a strategy to predict products that consumers want to buy by evaluating their preferences and personalities (Anon, 2016). This personalization across all their markets, Staples observes is the lifeline of their business to improve sales. Their strategy to implementing personalization that Staples suggest includes building a strong search mechanism that points people to the right products. Staples suggest incorporating a search engine on its website that customers can use to browse through it’s over a half million products and product categories. When customers search for an item, the search tool will return the most accurate answers of the product that they needed. It must fetch results from the database and determine the most likely product each customer in their market is relevant. To do this, they suggest use of intelligence in data analytics and understanding local cultures, habits and use of terms by customers in these markets.
While the Staples want to implement personalized customer experience it must be able to focus on the users privacy concerns. Customers are always conscious of their data and have considerations on the platforms they choose to reveal their information to and how they are going to use it. Customers are only willing to share data only if it makes their shopping experience smooth and easier. For companies like Staples it must address itself to the laws within jurisdictions of the markets that it serves that govern how data is collected from customers and how it can be used. These present a new dimension on how the company should deal with the current situations.
Staples.com has also identified consolidation of its sites across all the markets as another thematic area that it needs to focus on. Over the years, Staples has actively been expanding through acquiring other online retailers in its target market (Anon, 2016). While these has increased its foot prints across Europe and other markets, it has presented the company with a need to consolidate the back ends of individual sites while making the front end more relevant to the customers. While it does this it makes its online presence standard and consistent so that customers can recognize its brand. The company views this consolidation as a customization of customers’ experiences in various markets that have different languages, culture and preferences. The company has an in house built shopping platform through which it wants to build on across the markets. Instead of procuring a standard off-the-shelf solution, the company observes that it will focus on its own innovation to roll out the back end of all individual sites and make it one.
Consolidation of individual sites back ends into a single back end ensures that there are standardized program through which office suppliers on its sites can accessed throughout multiple markets and that success in one market can be transferred into another. The shopping lists available for its customers are preapproved but a localized business model is implemented for each market. Consolidation of sites maximizes costs associated with individual sourcing of products costs. It is also an important decision in making cart activity standard across board, improves efficiency in ordering process and in collecting data from customer and analyzing it. While this is commendable, the company need not be lost in the details of consolidation forgetting the customer experience for the target market.
The new CIO in Staples has also identified standardizing its ERP system platform as a thematic area of focus (Anon, 2016). The objective of any standardization is to guarantee that all the resources are utilized efficiently within an organization. In the case of Staples online stores, this means integrating all the components of the business comprising inventory and purchases management with accounting and client relationship management systems. This is possible through use of a shared database by numerous portions of the firm to access similar and up to date data. The accounting as well as sales units will view same figures for every customer.
The online stores by companies such as Staples ought to standardize the ERP software so that there is synchronized reporting and automation. This will ensure that teams in various markets it operates in do not maintain separate databases and other records but access them from a central database of information and hence greatly reducing time spent in merging and combining databases of different formats. Standardizing the ERP system would also imply that the company creates portals as well as dashboards that allow employees to view specific metrics important to their roles. Critical information will be shared in real time across the markets (V3.co.uk, 2016).
Challenges
Staples lacks a state of the art information system that can track the purchasing history of the customers, keep inventory orders right, profile customers who visit its site and make a predictive assessment of what they will need in the future. Though the company has registration details of all its customers, it has not made much effort to make use of the gathered information for the success of the company in driving sales and retaining customers (Flash Quotes, 2009). The company cannot predict any future demand trends. The CIO should be addressing how the Staples.com will deal with this challenge through hiring programmers to create a program to solve this. The CIO alludes to the fact that online sites generate large data everyday which can only be useful if it’s analyzed and used to better the customers experience when shopping online.
Staples.com does not have clear tools and channels to engage with its customers. A conversation between a business and its customers is a reflection of company brand and value. Each company needs to actively seek participation of its customers in contributing to its overall growth. This can happen when customers are actively able to give their feedback, take part in discussions and in voting pools (Ostapenko, 2011, p.12). The positive of these interactions is so that customers have a means through which they can share their experiences shopping in the ecommerce site. They can give their feedback to the IT staff that can use the positive criticism to create personalized features. The CIO needs to exactly point out how the retailer will help customers share their experiences so that the retailer continues to be profitable by increasing sales. In particular he needs to say what social media tools he is willing to deploy, their benefits and how they related to the company goals of being customer focused.
Staples internet commerce site will need to focus on how it will deal with simplicity and speed. The site must respond to issues of the time it takes to load a page, the checkout process time and a user interface that is easy to navigate and has relevant content. Businesses including staple will need to view personalization not only in terms of providing products to relevant segments of the markets but also offer faster performance on access to its website and how customers browse it. The pages will need DE cluttering of elements that may cause delays in accesses the main contents and distraction of the user. The focus in this new approach should be on product recommendations that are relevant to the customer. The information and features that customers’ need most including reviews, product images and delivery should be the focal point of any given page instead of large volumes of information that may be unattractive to customers. The CIO needs to focus on ways to make the contents of the ecommerce site of staples.com more appealing to the customers in every market.
The company online store site lacks a full implementation of a subscription model where its range of office supplies can be subscribed to periodically by the customers. The model where customers can pay for goods they require in their office operations regularly and be delivered after passage of time is an essential one because it provides regular recurring sales and predictable inventory sales. It also creates long term and deeper relationships with the customers. For Staples to be successful in the market it needs to implement subscription model in its information system where customers do not need to always shop every month but rather understand someone will deliver their products at the beginning of the month at the convenience of their home.
Summary and Future of Internet commerce
In conclusion, customers are never alike. Staples online store must make efforts to recognize its customers’ individuality and thus increase its share in the digital market economy and definitely profits through providing a customer experience that serves that individuality in shopping. Staples will need to include a strategy of having an integrated collection of data, a recommendation platform or/and customized products building tools. By implementing these strategies, the company will improve will satisfy the shopping needs of each of its target markets. The conversion rates will raise, order rates frequency will improve while order sizes will be larger for each individual customer. This is besides repeated sales to customers in the markets.
Staples online store strategy should also focus on integrating new upcoming consumer digital touch points including the optimization for mobile phones, desktops and tablets. Consumers of now and in future will use their communication devices to order their goods online. The personalization that the company aims at needs to take care of this new approach. It has been forecast that internet commerce will aim at optimization of the contents for customers with low data bandwidths devices like smart phones (Lau, Ravi and Singh, 2011, p12). The strategy is to optimize the contents of each page and the pages responsive to each device. The programming team will aim at making the store more appealing to all customers in their own device of choice.
Staples will need to differentiate between existing users and new prospective customers through their shopping behaviors whether they are using their smart phones or desktops through a single view. It will then need to place personalized ads that best fit all the customers in their device. Customers will then build confidence based on the efforts of the company to accurately deliver what they need and suggest most relevant products. This will make Staples’ business will be scalable in the long run.
Staples also need to focus on creative merchandising strategy for its online business. The future of internet commerce is focusing on the individual customer experience through incorporating intelligence to the site (Hastie and Friedman, 2009, p.23). Rather than aiming at bulk selling of products online, the company needs to be aware of the preference of goods at each market and make such products more visible within that market.
Staples need to also focus on the issues of compliance across the markets it aims at entering into. It will need to focus on the rules and regulations concerning the way businesses carry transactions online in a secure environment so that it does not compromise on the integrity of the customers. This is only possible through proper programming of its online site for safe transactions that are within the legal framework in the country of operation. It needs to focus on meeting the customers’ needs as well as staying relevant in its IT infrastructure.
Staples will need to take care of the enabling technologies that drive internet commerce which include social media, payments gateways and data analytics. These are the emerging areas that will either make internet businesses to flourish or fail. They all have a significant effect on the numbers of sales a company makes through their online stores. It must integrate the best practices across its channels to ensure that communications are handled professionally to avoid negative reviews in social media; the data that is produced is useful in making decisions on which advertisements goes to which categories of people while payment gateways are secure and that customer have confidence using them.
Customers are likely to continue shopping at retailers with physical stores as well as those with an online presence. Staples will, thus, need to continue to not only improve its online business but also increase it offline business for a competitive advantage. The emphasis will need to be on better operations, both online and offline without which it will remain to be irrelevant. In either case, the consistence will be a user experience that will keep them coming back to the online store.
References:
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Lau, L., Ravi, R. and Singh, M. (2011). Iterative methods in combinatorial optimization. Cambridge: Cambridge University Press.
Flash Quotes. February 17,2009, Available from http://www.nasdaq.com/aspx/flashquotes.aspx?symbol=SPLS&selected=SPLS
Hastie, T., R. Tibshirani, J. Friedman. 2009, The Elements of Statistical Learning: Data Mining, Inference, and Prediction. 2nd ed. Springer New York.
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