Winning e-Commerce Strategies

The critical factors that can make or break a successful e-commerce implementation

ABSTRACT
Online sales have seen exponential growth in the last few years. As this channel finally achieves a significant percent of
sales of many retailers, most of them are re-evaluating their overall Cross Channel strategy and deciding how best to align
the marketing; sales processes and support systems across the traditional store front and the online channel.
Getting the e-commerce end of your business off the ground isn't a walk in the park, but it's also not as difficult as you may
think as long as you strategize
This white paper attempts to lay out an appropriate roadmap for the implementation and customization process.

Table of content

Cross Channel Background and overview- The State

of Cross Channel Operations
................................................3
Options in your Cross Channel Strategy

.......................................3

eCommerce Industry Dynamics & Challenges..................................4

eCommerce Implementation Pitfalls

.............................................5

eCommerce Best Practices & Future Trends ....................................6

eCommerce Transformation in action: Case Studies .........................8

Cross Channel Background and overview

The State of Cross Channel Operations
In the last few years we have seen online sales grow very rapidly as a percent of overall retail sales U.S. online retail
sales will more than double over the next six years, reaching $316 billion by 2010. According to a new report from
Forrester Research, the growing population of online shopping households, combined with effective multichannel
integration and site improvements from retailers, will drive e-commerce growth to account for 12 percent of total
retail sales in 2010, up from nearly 7 percent in 2004.
As multichannel sales achieve a significant percent of sales, many retailers need to re-evaluate their overall Cross
Channel strategy and determine how to align the marketing; sales processes and support systems. They need to
continue to integrate e-commerce with their more traditional brick and mortar operations
During the Internet Boom retailers rushed to build their online channels in the quickest possible manner to meet
growing consumer demand. In their speed to market, the long-term cross-channel implications were often not part of
the initial design. In fact, in many cases the new kid on the block was deliberately separated from the traditional
channels so that the outcome was not tainted by the old world thinking.
Many of these entities were set up as independent online business units and were managed by a conflicting set of
performance metrics, incentives, and operating models. Another option for retailers was to establish a web presence
by using basic, standalone, first-generation e-commerce software that in many cases had various aspects of the
operation not just outsourced but completely separated form their regular operations. As retailers now attempt to
integrate these multichannel experiences, existing software and operating structures are proving to be an obstacle
and retailers are discovering the need to significantly rethink their Web presence and strategy
According to Robert Garf of AMR Research consumer expectations for seamless cross-channel shopping have
increased. However, retailers are facing two major obstaclesa lack of cross-channel operational efficiencies and
lingering technical shortfalls
Retailers see an opportunity in challenging times:
During the first quarter, on top of a 40% or 41% increase for all of 2007 versus all of 2006, Costco.com was up 45%,
Clearly electronics dominates, whether it is electronic games or game consoles Costco chief financial officer
Richard Galanti
Circuit City Stores will work toward a U.S. turnaround after several quarters of losses, CEO Philip Schoonover said
during a presentation at NRF's annual conference

Options in your Cross Channel Strategy

Retailers have are a number of options today to implement their new cross channel strategy including either new
packages or custom build implementations which essentially are replacing their current legacy eCommerce platform
and upgrading their current systems . Predominantly most Retailers had invested in first-generation e-commerce
applications during the last decade to meet the growing consumer demand. These standalone systems (quite often
highly customized) are now becoming a barrier preventing retailers from satisfying the evolving cross channel
consumer expectation. Thus most of them are in a process of a complete revamp

Following chart shows an estimated split of various options available:

Packaged Software
with Mini Customization
19%

Packaged Software
with Major
Customization
38%

In- house /
Custom Application
43%
Source: HCL Strategic Intelligence Wing 2007

Whereas some retailers choose to outsource the system and the process at one extreme, others are outsourcing just
the system and in some cases they are outsourcing just the hosting of the system.

eCommerce Industry Dynamics & Challenges

=
Building Sustained Competitive Advantage
! Leading companies are looking for next-generation capabilities to maintain competitive advantage by being
early adopters of new functionalities.
! Organizations are re-thinking e-commerce for potential growth opportunities for their overall business

=
Need to integrate or leverage the Web 2.0 imperatives
!
!

Need to use consumer networks (like gen net etc)

Comprehensive Search Capabilities including Comparative Shopping and Advanced Search functions

=
Increased Quantum of Online User Base
!

Need to leverage e-commerce for compelling business reasons

=
Integration of E-Commerce Systems with Enterprise systems
!
!

Seamless integration of E-commerce systems with legacy/ non-legacy Enterprise systems

Growing interest in allowing better integration across all customer points of interactions

=
Increased Security Requirements
!
!

Need to address consumer concerns about privacy

Concerns about security of credit card and other information

=
Technology and Platform Integration Consolidation of Multiple web sites built on varied technology
platforms
! Inorganic growth through M&As
! High cost of maintenance

=
Need for Enhanced Development Capability
!

Quicker turnaround time for critical skills and capabilities

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=
Offshoring Mission Critical E-commerce Applications
! Meeting end-user satisfaction

=
Critical Applications with poor Architectural evolution
Many enterprise homegrown e-commerce platforms and commercial platforms need an overhaul
! This market is entering a replacement/upgrade phase in which users wish to add new capabilities, and update and
integrate their current "siloed" multichannel e-commerce projections.

=
Huge initial technology ownership costs
!

Need tech. partnerships to avoid tech obsolescence

=
Need an Always On facility to maintain the business critical apps

Major issues & pitfalls with eCommerce implementation

Ecommerce implementations programs are complex and challenging. Not
all retailers have the internal capabilities or scale to execute on them
successfully. So what are the challenges that we need to be aware of before
embarking on ecommerce implementation programs?
There are several challenges that retailers need to consider when they
embark on their ecommerce programs:
Most Retailers underestimate the organization change impact and what it
means to people roles and responsibilities. The merchandizing drivers and
parameters and key performance indicators are very different for online
business versus for the traditional store fronts. Should the organization
market and brand itself differently for the online customer versus the regular customer. Should the IT organization
for the online business coordinate and engage with the Corporate IT organization? What is the change readiness and
training impact to people as they implement the new processes and technology?
In several cases, the effort impact to legacy and backend systems has also been underestimated. There is often
insufficient knowledge and documentation of the incumbent systems and adding a channel that behaves quite
differently may need modifications in many fundamental processes, and workflows of the existing legacy
applications. It is also easy to overlook the complexity associated with the customization and integration of the
ecommerce platform with existing systems
Another issue is the elaborate definition of the content management and workflow processes and the retraining of
merchant teams so that they can effectively use the new content management systems.
Performance tuning is another area that gets pushed to the backburner and sufficient importance needs to be attached
to the architectural implications of scalability, availability and performance.
The latest twist to the ecommerce requirements is the need to include social networking and the usage of Web2.0 The
concerns here are whether to create your own social networks and associated services or piggy back on existing
social networks and associated tools the other major strategic concern is how to control. Monitor and filter content in
a medium whose purpose is to smash existing paradigms about the ownership of content. And allow free wheeling
discussions and self expression.

eCommerce Best Practices & Future Trends

Following strategies should be incorporated in your Retail eCommerce plans:

=
Site performance - This is one of the most important factors which enhances customer experience & has to be
maintained at a high performance and high availability. Since web users can sign up and visit at any time it is
extremely important that the site is up 24/7/365. Performance needs to be very fast and the site should have the
ability to scale for sudden surges in user and transaction volume.

=
User interaction is of prime importance - Retailer need to analyze and study those Web sites that consumers
identify with and improve site organization and model their purchase process on that of the leaders in customer
satisfaction. The good news here is that there is a lot of learning possible from leaders in the Internet business even
though they may not be direct competitor.

=
Customer feedback - In order to ensure a good customer experience, Retailers must evaluate the experience of
real live customers shopping on their Web site, capturing the customers' behavior and feedback along the way.
Armed with customer insights, companies can put their efforts into improving what matters most.
Following trends should be kept in mind while executing your Retail eCommerce strategies:

=
Open Identity for Universal Single Sign-On System - For effective user id authorization and management its
better to go for Universal solution - the OpenID which is the decentralized Single Sign-On System. OpenId enable
Open Reputation, roaming portable identity and personal data for the users of the site. Using OpenId enable sites
and web user do not need to remember the traditional authentication tokens separately for each site. OpenID
eliminates the need for multiple usernames across different websites, simplifying your online experience. It is in
the adoption phase and is becoming more and more popular, as large organizations like AOL, Microsoft, Sun,
Novell, etc. begin to accept and provide OpenIDs. It is free to use and is easy to integrate with the exiting Id
Providers.

=
Mobile Internet Devices access rises as Common Shopping Strategy It is expected that worldwide market for
Internet Services is increasing multifold in coming years. That increased consumer reliance on popular online
services can be seen in strong and growing demand for Internet-accessible cell phones, PDAs, two-way pagers,
small kitchen devices, and TV set top boxes. Forrester believes that a new category mobile Internet devices
(MIDs) will deliver on the promise of the mobile Internet. Take the mobile phone, now nearly ubiquitous among
consumers. It is emerging as both a retail payment device and a tool for shopping online, but consumers will
undoubtedly find additional shopping uses for it, experts say. The photography done by mobile phones can be used
with online price comparison engine as the Common Shopping Strategy.

=
Ubiquitous connectivity, broadband adoption and multichannel delivery - Theres a convergence of
broadband Internet access, mobile commerce, online video, consumer reviews, web TV, social networks and
blogsall wrapped up in web community and commerce. The onset of web TV alone offers so much promise.
Online research is now a standard part of the buying process with 80 percent of online users saying they research
products online before they make a purchase. Most of them rely on the ratings / comments made by the other
common users. It is the need of hour to determine a long-term strategy to allow customers to access the web from
numerous devices and target for the multi-channel delivery model. The mobile companies have already unveiled
new Web-based services and gadgets to help customer download music and play games on handsets.

=
Evolving Open Source in Solution Development - Open source promotes software reliability and quality by
supporting independent peer review and rapid evolution of technology through community process. It provides a
stage to make key technologies ubiquitous. There by bringing value, lending credence, compatibility etc. to stacked
products and feature packs, e.g. Java, Apache, LAMP. We can use components that are already in open source (e.g.
Apache) rather than developing or enhancing our existing closed source components. It gives the community tested
solution and provides the opportunity to collaborate with other companies or individuals with common objectives.
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It provides the added benefit of increase choice and flexibility and adoption / use of Open Source reduce time to
market along with enhanced affordability with perceived zero to low cost.
=
Websites with Rich Internet Application (RIA) Experience With the increased bandwidth and media

availability customers are expecting highly visual content and the freedom to shop however they wantonline, in
stores or through call centers. Such an application might look like a kind of mini-browser within a browser, into
which shoppers could drag products, pictures and other online content. Design the applications which could call
back to any store to check on inventory status, interact with a master checkout and transaction processor so as to
allow shoppers to check out centrally instead of at each retailer site. It could be let users create and display their own
favorite product catalogs on a site. There is need for the applications which would reside on consumers desktops
rather than depending on a live Internet connection to serve content from the retailer.

=
Web Analytics for Forecasting Trends With the Web 2.0 we are collecting lot of data. It is important to involve
collected data into the analysis of the trends. New game in content is to push out concierge-like services that analyze
Web content to discern much deeper patterns of meaning and more intuitive results for answer-seekers and
demanding customers. Increased sales can come from harnessing techniques based on personal preferences such as
collaborative filtering along with developing tools that divine the real influencers of opinion in social media outlets.
Content providers have been recognizing the value of online content analysis services since the beginning of
electronic publishing.

=
Social Connections New Trend in Shopping Connections will also fold into other so-called Web 2.0
capabilities, including Web page bookmark sharing tools, or tagging, and a blog search function. Connections can
unlock a business's collective knowledge base by letting workers share their experience with others. It is already
gaining popularity within business settings and flourishing as vehicles for professionals to cultivate job
opportunities, sales leads and other connections. The rise of social networks is having a positive impact on
ecommerce in the US. Along with demographic changes and growing broadband penetration, it is one of the key
factors that drove online shopping spending up by 25 percent year-on-year since 2005. Brands are realizing they
have to do a lot more than making something that tastes good and have start realizing that connecting on a personal
level with people makes the life better. These days consumers are the source of feedback (similar to a focus group)
on product design and features, marketing and advertising campaigns. Word of mouth (i.e., viral marketing) is free
advertising and increases the visibility of niche retailers and products.

=
Optimization and Semantic Search Strategy For last couple years the buzz in retail and e-commerce is all about
optimization -- everything from optimizing Web site for natural search, to pricing and inventory optimization, and
even getting optimized motion-control shoes for running. Along with the Optimization there is need to explore the
fast-evolving power of targeted, semantic-oriented business search and marketing. Web sites with Natural Search
(Keyword Search) are not enough. We also need to create the knowledge by sharing our search experience.
Semantic Search has added Keyword Search with Faceted Navigation and Collaborative Filtering. B2B search
provides a way for small, local retailers to find the potential customers and other businesses that are actually
looking for the services and products they provide. With the semantic search any business can refine their
procurement processes and expand their distribution opportunities by better exploiting the new breeds of semantic
based business search and associated advertising.

=
SAAS the definite advantage of On-Demand Services - The e-commerce channel continues to grow at a
staggering pace (up to 30 percent annually) and consumers, influenced by the latest Web 2.0 capabilities, continue
to expect a better shopping experience from e-commerce sites. According to a September 2006 Forrester Research
report, 34 percent of North American retailers planned to purchase and/or upgrade sell-side e-commerce
capabilities. In the niche demand for the competing priorities SAAS is giving merchandising control, automatic
seasonal upgrades and on-demand scalability. It helps merchants and Web designers to manage the merchandising
and design of a best-in-class e-commerce site, improving the timeliness and relevance. It helps retailers
consistently improve the user experience, stay current with e-commerce best practices and focus a greater portion
of time and resources on creating brand differentiation rather than building and maintaining commodity
functionality. True on-demand must include a grid architecture that delivers capacity when a retailer needs it.
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This function automatically provisions additional server capacity as needed to handle increased traffic loads, all the
while maintaining seamless, optimal performance. The major attraction of on-demand e-commerce model is that
the platform is continually living, kept current and maintained by the software vendor and runs on hardware
optimized for serving e-commerce.

=
SOA as Business Oriented IT development The business environment is undergoing a dramatic change.
Competition from traditional and nontraditional players, emergence of a multitude of delivery channels, a plethora
of regulatory and governmental compliance requirements, and demands for more flexibility and agility, to name a
few, influence business design and execution. In such a scenario SOA is an overarching architectural philosophy
that has gained widespread adoption in the enterprise by helping enterprise IT to quickly respond to the agile needs
of the business. It is a paradigm for the realization and maintenance of business processes that span large distributed
and complex systems. SOA is a technology which brings together the two major enterprise stakeholders IT and the
business unit to make the business processes flexible and adaptable. IT is responsible for designing, implementing
and deploying the IT infrastructure and applications, while the business unit is responsible for delivering value to
its customers and end users. The SOA enables retailers to extend the lifecycles of older IT assets by exposing data
and functionality in those systems to consumers via Web applications. As per Gartner By 2008, SOA will provide
the basis for 80% of new development projects. It will enable organizations to increase code reuse by more than
100%. Today the SOA scenario is broad with many vendors and standards. SOA represents a model in which
functionality is decomposed into small, distinct units (services), which can be distributed over a network and can be
combined together and reused to create business applications. These services communicate with each other by
passing data from one service to another, or by coordinating an activity between two or more services. The
deconstruction transforms the enterprise into a collection of smaller and autonomous business components, which
is interacting with each other coherently to serve each other and fulfilling the business needs.

=
Ajax as front runner technology for Extended User Experience AJAX (Asynchronous JavaScript and XML),
is a group of inter-related Web development techniques used for creating interactive Web applications. A primary
characteristic is the increased responsiveness and interactiveness of Web pages achieved by exchanging small
amounts of data with the server "behind the scenes" so that the entire Web page does not have to be reloaded each
time the user performs an action. This is intended to increase the Web page's interactivity, speed, functionality, and
usability. Users are now demanding more richness from enterprise Web applications. It is creating considerable
pressure on the enterprise to create new RIAs and to modernize existing Web applications with RIA technology,
most notably Ajax. The leading technologies for Ajax are Dojo and DWR. Dojo is the leading JavaScript widget
toolkit for creating AJAX applications from reusable and extendable widgets which can easily being added to the
existing web pages. DWR (Direct Web Remoting) is an AJAX remoting framework for Java which is easier to use
than raw XMLHTTPRequest object.

=
WCM tool for Managing Online Content With the evolution of Online Collaboration, the consumers are used
to using Google Maps, Blogger, Flickr, del-icio.us and Wikipedia. It leads to new Web World Web 2.0 which has
reset expectation of user; creating a fundamental shift in both technology requirement and business requirement.
Ever-increasing number of users and online business leads to content bottleneck and raised the urgent need to
manage accelerating demand for on-line collateral and e-commerce enablement. Online consumers are expecting
Rich User Interface, Participation, Categorization, Personalization and Trust. Leading WCM has come with the
solutions of combining Content Management with Web 2.0 services. WCM servers provides embeddable content
services for community participation along with content access to Multi-Channel, Collating Client Details, Storing
and Displaying Product Information, Changing Web Site Content, Managed Workflow for Web Content Authoring,
Displaying Seasonal Media, Changing Images on web pages giving a different feel each time it is visited and
effective Online Promotion Management. These tools also provide the benefits of Integrated Snap-shotting,
Auditing, Archive Management as well as enhanced High-Availability, Fault-Tolerance and Scalability. The
effective usage of online tools leads to reducing managing content from Weeks to Hours, Service Oriented Auditing
hence saving cost and fool-proofing online business with increased functionalities

HCL Case Studies

HCL Case Study 1
Client Overview: A Leading provider who creates and operates Web sites for about 60 retailers and consumer goods
manufacturers in addition to its own sporting goods retail operations
Business Objective:
=
The client wanted a highly scalable, customizable and maintainable B2C e-commerce solution with low
turnaround time
=
They wanted to enhance the branding of their customers on the web and generate revenues from these web stores
=
They required integrated development of a web store, order management and order fulfillment / tracking system
Solution
=
Development & Maintenance for Online WebStores (API, JSP Pages)
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Customer Service tool (Dashboard), Campaign Management tool (Epiphany)
=
Implementation of Web 2.0 features
=
Parametric search and navigation
=
Integration of client systems with third party systems using feeds
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Supply Chain Management, CRM
=
Web analytics and Business Analytics
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Production Support 2nd Tier on all priority defects
=
Supply Chain Management JDA (Inventory, Orders Management and Fulfillment)
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Use if AJAX technologies for creating interactive web applications
=
Using SOA as an overarching architectural philosophy
Value Delivered

=
Category based Catalogues
=
Seamless integration of JDA MMS, Catalogue Management System, WebStore and Epiphany (CRM)
=
99.5% Application availability
=
Enhanced user experience
=
Availability of customer data and information for business analytics
=
Effective price and promotion handling
HCL Case Study 2
Client Overview: The world's largest apparel company with a history of over 100 years and brands that reach a
variety of consumer segments across various retail channels
Business Objective:
=
The client had Multiple Order Management Systems
=
Their wanted single order management system
Solution
=
The project is a single order management system by using J2EE for all the client companies & can be primarily
divided into following:
=
End-to-end solutions development and implementation
=
Post implementation maintenance support & Customizations of user interface
=
Catalog Management, Content Management & E-Commerce framework

Value Delivered

=
Reducing committed and overall inventories
=
Providing better planning information to manufacturing
=
Offering the flexibility to obtain and support new customers
=
Providing much more detailed, consistent, and reliable available-to-promise information
=
Growing the business with more competitive services & Helping in meeting its full potential in cross-sales to
existing customers

About the Author

Ravi Sankar is the Practice Lead for Retail and CPG at HCL America. Prior to this he was AVP of Domain
Consulting in the Retail and Consumer Goods Practice of Satyam Computer Services. He has over 23 years of
experience in the US improving the performance of organizations by developing and implementing innovative
process and technology solutions to meet the business and supply chain needs of Global 1000 corporations as well as
small and medium enterprises.
Prior to joining the information services industry, Ravi worked in operations area of companies in the US for 18
years. Most recently he was VP of Supply Chain for Davids Bridal (a Division of May Department Stores).
Previously, he worked as VP of Corporate Planning and Information Systems for Sumitrans, a 3rd Party Logistics
Company and subsidiary of Sumitomo Corp. He has held management roles with KPMG Consulting, Melville Corp
(parent of CVS Drugs, Marshalls, Linens, KB toys etc), Leaseway Transportation (now Penske Logistics) and
CSX/Sealand Logistics. Ravi has developed extensive business solutions in the areas of Just-In-Time transportation,
Network Optimization, Inventory Management, Replenishment and Allocation as well as technology innovations in
eCommerce, IT Project management and Systems Implementation
Anupam Bhatnagar is the Category Manager for Retail & CPG at HCL Technologies. He has over five years of
experience in IT Services marketing in areas including ERP, SCM, Retail & CPG Industry Solutions. He has a
strategic focus on E-Commerce, having done comprehensive research projects in future trends & challenges
Retailers are facing in this area and also have managed execution of end to end campaigns in E-Commerce. Prior to
this he has worked in Enterprise Solutions Group at Birlasoft where his focus was blue ocean initiatives and business
development in the US for various lines of businesses
Naveen Grover is a consultant in the Retail & CPG Practice with HCL Technologies. He has more than Eight Years
of experience in the areas of Web Technology, using J2EE / Web Services and Many Open Source Technologies. He
has previously worked with, a leading eCommerce service provider, other leading F500 Companies and IIT Delhi to
name a few. Currently he is leading Retail E-Commerce Vertical Solutions Group initiatives HCL. He is having good
understanding of the E-Commerce and leading future trends in online Retail Business. Naveens present focus is on
designing SOA and ESB Workflow backbone layer for Retail business
The authors can be reached at retail.cpg@hcl.in

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HCL e-Commerce Hightlights

=
eCommerce Functional components: Order Management, Catalog,

Transaction Reporting, Business Intelligence

=
Mature Processes (CMM5)
=
Integrated Global Delivery
=
ITIL Compliant Processes
=
COPC CSP 2000 Process Certification
=
ISO 9001, Bs799

=
B2C: Personalization, Live Chat, Community, email Marketing, Social

Networking

=
B2B: Collaboration, Product Information Management, Customer Web

Store, Promotions Management

Delivery
Efficiency
& Quality

=
Application Development & Integration, Application Management,

Service
Range

=
B2B, B2C
=
Portals, Content Management
=
Business Consulting, Technology

Consulting
=
Internationalization, Data Warehousing

Automation & Performance Testing, Application Deployment, Application

Porting & Migration
=
User Interface & Web Site Response time optimization Infrastructure: 24x7
support, Managed Hosting services PCI compliance

Diverse
Exposure
Domain
Expertise

=
7,000 + person years of Retail experience
=
1400 + dedicated eCommerce consultants

IP & Frameworks
=
CONNECT: Loyalty Management System
=
E-store : A Framework for Online web stores

Memberships

=
Reusable Components
=
Security Frameworks
=
Leverage Web 2.0

AMR Research ranks HCL higher than the other Indian offshorers in Retail capability scope with leadership
status in eCommerce.

Hello there. I am from HCL Technologies. We work behind the scenes, helping our customers to shift paradigms and start
revolutions. We use digital engineering to build superhuman capabilities. We make sure that the rate of progress far exceeds
the price. And right now, 51000 of us bright sparks are busy developing solutions for 500 customers in 17 countries across the
world.
How can I help you?

retail.cpg@hcl.in

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