When your retail Web site directly generates much of your income and it crashes unexpectedly during the busiest time of the year, how do you prevent it from happening again?
You find the right outsourcing provider.
That is was what confronted Interflora UK a few years ago. Interflora is part of the world’s largest and most popular flower delivery network covering over 58,000 florists in over 140 countries.
“An enterprise can lose hundreds of thousands of sales dollars and chase away customers very quickly when its site crashes. This makes a pretty strong case for outsourcing, regardless of the size of the client company,” says Susan Plonka, President of her own Corporate Interactive Sales Consulting firm.
Adapting to a Changing World
Interflora UK was established in the 1920s as an association to represent the interests of that country’s flower industry. A lot of things have changed since the First World War. One was the global economy. Interflora took on more marketing and sales responsibilities for its members. It established a World Wide Web presence, outsourcing the design, management, and site hosting to a small UK firm. For a while, it was adequate and served the needs of the professional association.
After a time, the requirements of keeping pace with its competitors revealed shortcomings in not only its Web marketing and sales strategy, but its execution. This led to its Web site crashing during the Mother’s Day buying season a few years ago — the single busiest period of the year in the florist industry.
“We needed reliability from a new provider that could grow with us,” says Michael Barringer, Marketing Director at Interflora UK. “We wanted one who understood our business and had some floral Web retail experience — hopefully, a lot.”
So in 2005, Interflora encountered Novator Systems Ltd. of Toronto, Canada, a provider of Web marketing, design, and hosting solutions to many retail firms such as Lucas Films, Adidas, and Warner Brothers. Novator’s first Web client in 1993 happened to be the international florist FTD. Due to the provider’s long-term success with FTD, Barringer knew he had found the provider he needed to take Interflora into the future.
Online Retailing Today
“Today’s online shopper is extremely Web-savvy and expects more than ever, forcing retailers to raise the stakes,” says Scott Silverman, Executive Director of Shop.org. “Companies must invest in new features in order to keep customers coming back. Retail Web sites everywhere are getting major facelifts.”
Shoppers are becoming more discriminating about online shopping, raising the stakes for retailers to provide a consistently positive, sophisticated experience. In the summer of 2007, Forrester Research and Shop.org surveyed 150 retailers to discover their top priorities for accommodating increasingly savvy online shoppers over the next 12 months.
According to the study, released in September, top priorities include fixing Web site design and performance issues, improving the efficiency of online marketing, and enhancing cross-channel integration.
Provider Helps Power Interflora’s Business Model Transition
Those are some of the reasons Interflora selected Novator’s Virtual Retailer (VR) suite, an integrated system encompassing site design, hosting and mirroring, as well as merchandising, marketing, personalization, analytics, loyalty programming, and catalogue management.
“The fact that we didn’t have the resources in house to put together such a sophisticated program was a given,” Barringer says. “In a way, what we needed–and got–is a provider who could help us learn about the online flower business and help us to anticipate the future and plan for it.”
Virtual Retailer has the sort of scalability that Barringer and his associates were searching for during Interflora’s transition from business association to commercial model.
Another advantage of outsourcing: Interflora doesn’t have to worry about “the always-changing infrastructure.” Barringer knows Novator will “support our future growth producing additional site support for individual member florists without having to manually manage each one.”
As the partnership approaches its three-year anniversary, Barringer likes what he sees. Conversion rates (percentage of sales transactions to site visits) are up 20 percent and there have been no dramatic site crashes since the engagement began. “And we’ve saved on internal marketing, site design, and hosting,” he adds, “plus avoided a lot of mistakes we would have made had we tried to do these ourselves.”
The Novator/Interflora outsourcing partnership is moving to the next stage. “Now that I can look at real-time analytics on my screen and recognize the results, it’s easier for me to anticipate our next moves, and there are a lot of them,” says Barringer.
One Size DOESN’T Fit All in the Web Marketplace
Meeting the needs of an increasingly discriminating Web customer is not easy. Not only are the tools changing, but the interplay between features of retail Web sites and how they interact are unique.
“The issue for retail sites is matching up the capabilities with the actual needs of the client,” says Novator CEO Mark Fox. “It’s not just what they want because often there’s a gulf between what they want and what actually works for them.”
Fox says suppliers “have to mirror the way their buyers market.” For example, Interflora sells a lot of flowers. “That produces more interest in the merchandising. And they are willing to make the necessary investment that those who do not sell a lot will not.”
He has found the larger the buyer, the more aggressive its marketing tactics. “It’s the responsibility of the Web marketing provider to anticipate, understand, and respond appropriately,” Fox says. This produces better conversion rates and average order values since the idea is to produce more sales without having to deal with more traffic.
“There can’t be any surprises,” he adds. “This is why it has to be a partnership.”
Barringer says Novator provides “a seamless experience to our Internet customers, enhancing our reputation as ‘The Flower Experts.’ Our membership receives the latest technology and marketing support. And that’s why this outsourcing engagement has been such a success.”
Lessons from the Outsourcing Journal:
- Outsourcing Web retail services are easy to cost-justify when the buyer has neither resources nor competencies to manage the many intricacies of success in the Web retail marketplace.
- A Web marketing outsourcer can look at a client’s objectives dispassionately, something the buyer might not always be able to do, thereby saving the client money by avoiding “gee-whiz” features that look nice but don’t always serve the client’s marketing objectives.
- A Forrester/Shop.org survey underscores the need for outsourcing retail Web site development and management. It found sophisticated retail Web sites have features like what’s new sections and more drop-down menus based on visitor analytics and market demands.