sportmaster cnews interview oracle webcommerce

8/10/2019 Sportmaster CNews Interview Oracle Webcommerce

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1EPAM SYSTEMS, INC.

Interview with German Alekseev

CNews:

In your opinion, is there any difference between

the state of e-commerce 3-5 years ago and

today? If yes, how signicant is it?

German Alekseev:

I think signicant changes started about one ortwo years ago. During the past 15 years, e-com-

merce has been developing just as an online

channel, for example, it could be an online chan-

nel of a large retail network. Some companies

had simple corporate websites (online business

cards), some companies had usual online stores

providing limited functionality and content delivery

options, and some companies had large well-de-

veloped portals. It is only one and a half or twoyears ago when the real changes started in what

we call customer experience, or, in other words,

in a clients behavior at a retail store. When big

retail chains appeared, we used to think that the

product price and shopping convenience were the

key factors for the client. Two retail models a

corner store and a shopping mall have practical-

ly pushed all others out. If the store model is suit-

able, and the price is affordable, people will buy.

Now time and relevancy are two factors dening

the purchasing decision. German Alekseev

Clients Force Us to Change

Retail Models Drastically

German Alekseev/CIO at Sportmaster


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2EPAM SYSTEMS, INC.


Previously a retailer could offer some-

thing directly to a customer only at a point

of sale, but this is too late

Relevancy means that a product or service

meets the clients purchasing expectations.

Through an online channel, the client can get

product details from the manufacturer or the

supplier, be advised by friends on forums and

social networks, read customer reviews, and

so on. All this helps increase relevancy. The

American market stats show that prior to mak-

ing a purchase, over 50% of clients look up theproduct information online, and make their pur-

chasing decision on the Internet as well. As a

result, if previously the client was looking for re-

tail chains and their brands, now the goal is the

product itself. When the client is well informed

about the product, it no longer makes the differ-

ence where to buy. To increase client loyalty is

a great challenge for retail chains. It forces us

to nd something new, including online channeldevelopment.

The second aspect is time. Today, every store

visit takes much time. E-commerce makes its

less time-consuming. By the way, retail chains

have greater potential there than common on-

line stores. They have good geographical cover-

age and extensive logistics, which can provide

a high quality of service both in purchasing and,

say, in product return. However, this potential

still needs to be realized. This is how changes

in client behavior force retail chains to upgrade

a common retail model.

CNews:

Which trends would you point out rst?

German Alekseev:

First, multi-channel sales develop. The client

should be able to learn about the product, order

it, pay for it, receive, or return it at any available

time in any available place in any available way.

The task of a retail chain is to provide such an

opportunity.

Second, services get closely interrelated: online

goes ofine. Our Western colleagues use theterm omni-channel retailing to describe this

trend. Lets see it in action. A client visits a retail

store, scans the bar code with a mobile device,

and get comprehensive details about the prod-uct, including reviews of other customers. Such

options enhance the purchase relevancy at an

ofine store. Traditional price tags or advertisingposters still cant provide this relevancy.

Another important trend is a more personal in-

teraction with clients. Earlier retailers addressed

their customers as target groups, which was im-

personal. At stores retailers could offer some-

thing personally only when the clients showed

their loyal cards at a point of sale. But this istoo late in the process. Now its necessary to

make customer service personal right from the

moment the client enters the store. For exam-

ple, its good when the client scans a QR-code

at the entrance and automatically gets redirect-

ed to our relevant webpage. Now we can see

what particular store the client visits, get more

information about this client, and make a per-

sonalized offer based on the previous shopping

history, the variety of goods at this store, and so

on. As a result, the company goes from study-ing the target groups to studying particular cli-

ents. Again, this is a serious challenge, since

the volumes of data and the way we work with it

are changing signicantly.


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3EPAM SYSTEMS, INC.


CNews:

Back to your company, did you decide to launch

an online store for OSTIN because of thischange in customers needs?

German Alekseev:

Absolutely. We understood that customer expe-rience was changing, and it required a timely

reaction. From the perspective of the concepts

and implementation of e-commerce, currently

we see the following: America is ahead, and Eu-

rope is lagging behind by about 9-12 months.

In its turn, Russia is behind Europe for about a

year. After a while, this gap will have a strong

impact: in terms of logistics, theres no problem

to deliver an order from abroad. For example,

for Chinese stores the delivery time is 3-5 days.

Were lucky to sell clothes instead of electronics

or auto parts, where competition with Western

online store is incredibly high.

At the end of 2011 when we made the deci-

sion, OSTIN had only a business card website.Sportmaster had an active online store, but we

couldnt use it as a prototype for many reasons.

Weve decided to start with OSTIN to cre-ate and promote a solid online channel for this

brand in order to meet customers new expecta-

tions and increase sales.

CNews:

Which criteria did you use to choose the platform

for the OSTIN online store and its implementa-tion partner?

German Alekseev:

Our approach to choosing the platform is sim-ple. When we start automating a functional area

that is new to us, rst, we thoroughly study thefunctional architecture, and dene which appli-cations are necessary. Second, roughly saying,we study Gartner reports, look at the products in

the upper right corner, and then study no more

than three platforms in details. Key selection

criteria are the following: the solution should

correspond to our needs in terms of business

functionality and technologies, as well as pro-

vide opportunities for fast development and

scalability in the future. I know pretty well that

the next day after any system is implemented

there will be a business user asking to accom-

plish as many new tasks as it was at the ear-

ly stage of the project. Thats why the platform

should be able to develop well. When its possi-

ble, we prefer to use large vendors products. In

practice, many independent suppliers are even-

tually sold or acquired, and no one knows what

will happen to their solutions. We prefer to take

no risks here. Sure, we look at the price. The

total ownership cost of almost every solution is

calculated ahead for ve years at least and tenyears at most.

Weve decided to start with OSTIN to

create and promote a solid online channel

for this brand

In this case, we had two market leaders: Ora-cle ATG Web Commerce and IBM WebSphere

Commerce. They were followed, with a small

lag, by the Microsoft solution. Oracle ATG wasthe solution that met all our requirements. It al-

lowed us to start quick and to launch an online

store with necessary functions in a relatively

short time. The platform has a lot of potential,

and the development environment was familiar

to us. Besides, Oracle has clearly explained the

system possibilities with no traditional pre-salehype. Finally, alongside with choosing the plat-

form we managed to nd a prospective imple-mentation partner, EPAM Systems. This com-

pany has already implemented Oracle ATG forretail clients in the Western and Russian mar-

kets, and, after a number of consultations and

reference visits, its implementation capabilities

have left no doubt. The project costs were also

acceptable, so all the factors fell in place.

CNews:

How did the project run? Which phases did it in-

clude? And how did you build your relations with

the external partner, EPAM Systems?

German Alekseev:

At the initial stage, EPAM has conducted a func-

tional analysis, I must note, at a very high level

of quality, and this contributed greatly to the -nal positive results. The rest of the project had

traditional structure: development, implementa-

tion, integration, launch, and support. Now we

try to focus more on internal resources during


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4EPAM SYSTEMS, INC.


the project, weve gained a good competency in

Oracle ATG. E-commerce is rapidly developing,and our business clients still poorly specify the

new tasks this area constantly receives, so we

have to address these tasks on the y. Addition-al ne-tuning and maintenance are closely in-terrelated, but in such conditions, we know how

to work only with internal resources.

I would like to note once again that EPAM and

our specialists have carried out acceptance

testing of a very high quality. A typical situation

for many projects is as follows: some minor de-

tail is missed, another one is put aside, the third

one seemed not important, and nally, at thego live stage, all these minor details grow into

a really big problem that has to be xed veryquickly and with a lot of effort. In our project,

testing was excellent. As a result, stabilizationphase turned out to be surprisingly short. Since

its launch, the website has never been down,

and there have been no serious problems at all.

Besides, EPAM and Oracle gave us good ad-vice on how to choose the online store infra-

structure. Previously we made both under- and

overestimation mistakes with other products.

This time there were no mistakes: the website

copes with the load well, and we managed to

avoid the situation when an expensive superserver is loaded at just 5%.

CNews:

What problems did you encounter, and how did

you tackle them?

German Alekseev:

I separate problems, tasks, and difculties. A prob-lem is something you cant solve. From this point

of view, there were no problems in the project.

The only difcult situation was the shift in dead-lines. Initially, the project duration was some-

what arbitrary: we planned to nish it in 7-8months, which we discussed with our business

clients. In the course of the project, weve re-

alized that for objective reasons this estima-

tion was too optimistic. However, we managed

to explain this to the clients and put up a new

deadline 10-11 months. Weve met it with con-

dence. The project required no heavy top man-

agement involvement, and this was a sure signthat everything was all right.

I would like to point out one more thing. The

quality of the project and its internal process-

es is mostly ensured by the quality of workowmanagement and participating staff. When a

project is big, it is crucial to understand the ser-

vice providers internal organization. For this

purpose we visited EPAM and asked them to

show how the company works. They gave us

a detailed presentation of their organizational

structure, the structure of processes and costs,

and the way they work with resources and cli-

ents. It was a good t for our vision of the rightpartner, and actually served as a major reason

for the predictability of the project results. This

is very important. At one point, EPAM had to

change the project architect this is always not

very good, and if it was some other company,

we would deal with it at the highest possible lev-el. But in that case we had no concerns: we un-

derstood there would be no critical issues due

to the companys structure and workow man-agement. It turned out to be true.

Since its launch, the website has never

been down, and there have been no seri-

ous problems at all.

CNews:

How would you dene the project results today?

German Alekseev:

Our aim was to build from scratch an e-commercechannel for OSTIN and to get a platform for its fur-ther growth. Weve achieved that. Now we have

experience, competencies, the platform all that

is required for creating another online store, thistime for Sportmaster. Additionally, we have sup-

port and prospective resources from EPAM and

Oracle.


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5EPAM SYSTEMS, INC.


CNews:

What tasks related to e-commerce and retail

channel development do you plan to solve in the

near future, and why?

German Alekseev:

Key problems of e-commerce and retails chan-nel development belong not to the online, but

rather to the rest of infrastructure. First, we

should understand that main data management

in multichannel retail largely differs from data

management separated specically for online-and ofine-channel. It raises plenty of ques-tions. Information should be modied everytime depending on the clients communication

device (a smartphone, laptop, terminal, etc.).

The information at a retail store should be the

same as at an online store. Just imagine, the

client scans the bar code and sees some prod-

uct details that the retailer doesnt have? Thats

trouble. It means we should support the staff,

provide them with the resources at least equal

to what clients have, restructure trainings for

salespeople, etc.

Second, it is the product pricing details. Now

theres no problem to set regional prices for

some stores. But when a client makes an online

order at one price, then goes to a retail store to

take it at the pick-up point, and sees anotherprice, it causes a problem. Youre lucky if the

retail price is higher than the online price, but

what if vice versa?

Third, its logistics. The company processes

hundreds of millions of product entities per year.

The goods are delivered to stores by trucks.

The warehouse spaces are tremendously limit-

ed. This is the reason why logistics should work

as smoothly as a Swiss watch. Add online or-

ders to this complex system. Its not a problemwhen a particular product is out-of-stock at a

retail store, it does not break its sales process.

But when a client orders two products, say, a t-ness exerciser and a cap, but receives only the

cap, this client will be surprised, to say the least.

As you can see, the difculties are not relatedto the online technologies, since we can learn

how to deal with them anyway. However, we

should radically change our approach to basic

data management, pricing, supply chains, logis-

tics, personalization of customer relations, and

so on. Its critical for companys growth to meet

the clients changing expectations and behavior

patterns.

That is how our OSTIN project was completedin a timely fashion, and marked the beginning

of our work towards changing the concept of

customer experience at Sportmaster Group of

Companies. At the same time, it pointed out the

challenges that we face now in terms of how

prepared our other systems are for multi- and

omni-channel distribution. In this respect, the

project was very important for the company, and

Im glad that due to our partners help, among

others, this project has been properly organ-

ized, executed, and launched live.

Nikolai Smirnov,CNews

About the CompanyFor 20 years, Sportmaster Group of Com-

panies has been successfully developing a

vertically integrated business in the markets

of casual wear, and sports and leisure prod-

ucts. The companys key business domains

include sport products retail represented by

the SPORTMASTER chain, sport productsdistribution that includes wholesales and

supply to the companys own retail chain,

casual wear retailing within the OSTINdistribution chain, and real estate activities

(acquisition, construction, and lease of real

estate for the companys commercial busi-

nesses).

www.sportmaster.ru

The OSTIN chain (part of SportmasterGroup of Companies) was founded in 2003

in Russia. Now this large retail chain com-

prises about 600 stores in Russia, Ukraine,and Kazakhstan. The company offers

casual wear for men, women, and teen-

agers alongside with middle-priced acces-

sories. The chain turnover reaches about

$800 million per year.

www.ostin.com

Original publication is here
http://www.cnews.ru/article/2013/04/09/sportmaster_klienty_vynuzhdayut_nas_serezno_menyat_format_torgovli_525261http://www.cnews.ru/article/2013/04/09/sportmaster_klienty_vynuzhdayut_nas_serezno_menyat_format_torgovli_525261

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