Omni-channel lessons from Total Wine & More's e-commerce project

When was the last time you heard a customer on stage openly admit the struggles on their project and describe it as "more of a turn-around story"? I don't see it often. It made for a memorable presentation from Tim Seevers of Total Wine & More at last week's SAP Hybris Summit. Seevers set the tone early:

There were times when we had a lot of challenges on the project. Both before launch and after launch. There may be times when we you're like, why did they ask this guy to talk?

Though he was quick to add:

I assure you, trust me, there is a happy ending.

As I jotted down Seever's lessons, I noticed that many of them resulted from the scope of his goals. This wasn't just an e-commerce project, but a step towards serving customers differently. In a buzzword-ridden sense, this is the arduous omni-channel journey.

Add to the cauldron of project pressure: Total Wine & More is in heavy growth mode. America's largest independent beer, wine and spirits retailer, Total Wine now has 142 stores spanning twenty states, pulling in $2 billion+ in annual revenues. Each store is a mega-store, stocking 8,000 wines, 2,500 beers and 3,000 spirits. But it's not a warehouse-style environment; each store has a classroom space and event registration is now pulled into the mobile UX.

Though the bulk of Total Wine's sales remain store-based (98 percent), their e-commerce projects are starting to take hold, with big bumps in conversion rates, online orders, and revenues. But getting there was no small feat.

The goals of Total Wine's "digital omni-channel transformation"

The scope of the project goes back to 2012. That was when Seevers' team concluded their current e-commerce platform was unsustainable (They launched on iCongo not long after Hybris acquired it). That moment of truth led to a breakthrough. Project "DOT" was born:

Rather than just look at it as a problem that we could solve with a "lift and carry" to a new platform, we saw this as a strategic opportunity to build a world-class omni-channel platform. At that point, the DOT project was born. Like any good systems integration project, you have to have an acronym, right? DOT stands for digital omnichannel transformation.

Project DOT had four key objectives:

• Omni-channel customer experience -With the vast majority of current business from brick and mortar, Seevers saw a "huge upside potential" growing revenue online. Just as important: make sure there is a "great customer experience" not only for online shoppers, but for customers that are gathering info before heading to a store.
• Extensible architecture - Seevers didn't want to get caught on a platform that wasn't being invested in; they wanted an extensible solution. For them, that meant moving to SAP Hybris: "We knew this was just the first step in our journey, and that ultimately we wanted to have multiple subsequent projects where we could build on top of the Hybris platform, and build different omni-channel capabilities in the future. That's one of the reasons why we chose Hybris."
• Control of investment - "We wanted a little bit more control of both the online day-to-day operations, the stability and the performance of the site, as well as the design and implementation of new features and functionality in the future."
• In-house competencies - Seevers didn't think they could achieve the first three goals without in-house skills competencies. He was wary of too much reliance on external consultants: "We knew we had to build in-house competencies. If this is something that's going to be core to our mission, and we need to be really good at it, we need to build a team. We didn't really have a team per se. We didn't want to be dependent on integration partners forever."

Seevers tossed up a daunting slide showing the ambitious scope of the DOT projects. I won't detail all of that here, but a few points that jumped out:

• SAP Hybris as the core and customer master
• Real-time integration with the loyalty program; Hybris for loyalty self-service
• All store inventory online; store inventory updated every fifteen minutes
• Location awareness, adaptive mobile design
• Hybris order management and customer service cockpit deployed in every store
• Integration with a number of third party tools, from Adobe Analytics to RichRelevance.

Most of the above posed challenges. Location awareness is no small thing given the state-by-state variations in alcohol regulations - all online orders are picked and packed from local stores. Site visitors are served up an location-based version based on IP address.

Perhaps most impressive, all of the stores' inventory is exposed online to the customer. To facilitate those 15 minute updates, Total Wines built a real-time architecture from their in-store POS (point of sale) system to SAP Hybris.

Seven hard-won project lessons

A project of that scope yields plenty of hard-won lessons. Here's seven that stood out:

1. Phased releases are better than big bang. Seevers doesn't think their approach of "doing all of this together in one big release" was the best one: "We did it all together because we really wanted to go live with all of these features all at the same time. I would encourage you if you can, try whatever you can do, to implement in phased releases."

2. Exercise caution about being a flagship customer for a new product. Though their Hybris OMS (order management) is now "smoothly operating for us", Seevers knows they took a challenging road by being one of the very first to implement a new product - especially given their complex OMS requirements.

3. If you do go forward as a flagship customer, make sure your relationship with the product team is strong. Seevers credits their close relationship with the Hybris OMS development team with getting them through rough stages: "I was really impressed with how Hybris stepped up to the plate, and really worked with us on getting this OMS right."

4. Before you offshore, consider the impact on collaboration. Seevers knows that saying "don't offshore" is unrealistic. Looking back, he would have built more travel into the offshore relationship, on both sides: "I would have embedded some of our business experts in a development team in Bangalore, and in the early stages of the project I would have had the architects and the developers working out of our office. That's what I would encourage you to do."

5. Size your hardware for traffic capacity to avoid performance problems: "Turns out we needed a lot more hardware to serve our traffic than we originally thought we did. I think that the Hybris sizing methodologies are a lot better than they were 3 years ago, when we were going through this process. So much depends on the level of customizations. I just encourage you to work closely with Hybris." Seevers went into detail on other factors that improved e-commerce performance. For them, it was "dozens of small things."

6. Your service provider is a difference maker. Seevers credited their integration partner, SapientNitro, for going above and beyond: "SapientNitro really honored their commitments to us. I was impressed by their desire and intent on doing the right thing, and not just fulfilling their obligations of the statement of work."

7. Go-live is just the beginning. Flipping the switch feels great, but be ready for troubleshooting and optimization: "We were giving each other high fives, and we ended up feeling like we went from the frying pan into the fire." Seevers' team faced three post-live challenges:

• performance - page load times were an issue. Seevers addressed this through a range of tools, from Load Impact for page load assessment, to New Relic for application performance monitoring and tuning. They still have a few developers dedicated to performance optimization throughout the year.
• traffic - one of Seevers' biggest regrets was not putting as much effort and time into SEO before launch. Some search momentum from the old site was lost on the new one. Much of that is now addressed, but it took a while to win the traffic back and move ahead.
• customer satisfaction - after their site launch, Total Wine's Net Promoter Score (NPS) had issues in one of the sub-components, "detractors" (The number of detractors went up "significantly" after launch). They held off on marketing the site until the issue was addressed.

In April, they achieved their minimum detractors threshold: "At that point, we were able to start promoting the site. We start doing that in April, and we got to full omnichannel promotional parity just in time for the 4th of July."

The (quick) wrap - results fuel momentum

With all their adversity, Seevers was understandably pleased to get to the results slides. While there is plenty of greenfield ahead, the early numbers look good. He showed a year-over-year comparison with 136 percent conversion rate increase and 140 percent order increase from August to August: "I like this because not only does it typically mean more revenue, and we're growing the business, but it also means that your platform is scaleable."

There's plenty still undone: Seevers is still working to build out internal IT competencies, one of the core goals of the project. He plans to move into "peak readiness" projects, forecasting into the Thanksgiving and December timeframes to anticipate peak demand.

And: six weeks ago, Total Wines & More created a new role called the Chief Digital Officer. The new CDO's been on board for six weeks. Total Wine is ready to "double down" on digital - let's see where it leads them.