ITS 380: Global E-Commerce Systems

John Bergstrom

HW CH 4-5

 

1.      Why did Dick’s decide to leave eBay and take over its own e-commerce operations?

One of the main reasons for Dick’s to end the agreement with eBay was due to their significant increase in revenue as eBay collected a fixed fee on every item sold by Dick’s through eBay. Even though the fee was the same for small and large purchases, it was still unsustainable for Dick’s to keep selling their products through eBay as the fee was cutting overall revenue for Dick’s. Another reason for Dick’s leaving eBay’s platform was to gain more control and customize the user experience, as well as, differentiate their products more effectively. Lastly, by developing their own e-commerce presence Dick’s also could maintain easier access to their proprietary customer data. Thus, they can now easier market towards their target audience and consumers.

2.      What is Dick’s omnichannel strategy?

Since Dick’s omnichannel strategy now includes having total control of its e-commerce operations will now allow them to provide better support for omnichannel features, such as shipping online and orders from their physical stores. Their strategy also revolves around them converting their brick and mortar stores into warehouses while at the same time functioning as traditional retail showrooms. This will result in increased efficiency and improve their delivery times as they noticed that 80% of their online orders came from the vicinity of a Dick’s Sporting Goods store.  

3.      What are the three steps in Dick’s migration to its new website?
The first step involved the development of their e-commerce platform and integration of their existing systems. In 2015, they moved two of their lesser known brands onto the platform, Field & Stream and Golf & Galaxy, and in 2017 they launched its flagship Dick’s Sporting Goods site on the platform they developed. The launching of the smaller brands was made to ensure that there were no major issues with the platform before fully converting their e-commerce presence to their own site.

The second step involved choosing a e-commerce technology system, and Dick’s went with IBM Websphere Commerce Suite because of its emphasis on omnichannel shipping and fulfillment capabilities. Other software’s that were used in their technology stack included Apache ServiceMix service-oriented architecture, Manhattan Associates Order Management System for supply chain management, and JDA Software Group software for merchandising, allocation, and replenishment. Lastly, Dick’s had to develop specific features for their new e-commerce platform that they prioritized. One of the most successful new features included the ability to buy online and pick up items at a store,

4.      What are the primary benefits of Dick’s new system?

There are many benefits of Dick’s new e-commerce system and one of the primary ones is that customers have the ability to purchase their products online and then pick them up at Dick’s stores at the customers convenience. Other benefits included; the ability for customers to ship from or to a store, the ability for Dick’s to break down and test different pricing and marketing approaches by region, and an improved search function on their site. After integrating their stores with their e-commerce platform resulting in a vertically integrated supply chain they noticed that e-commerce sales have doubled in regions where it opens new stores, and that multichannel customers spend three times as much as single-channel customers.

Project Questions

1.      Imagine that you are in charge of developing a fast-growing e-commerce presence. Consider your options for building the company’s e-commerce presence in house with existing staff or outsourcing the entire operation. Decide which strategy you believe is in your company’s best interest and create a brief presentation outling your position. Why choose the approach? And what are the estimated associated costs, compared with the alternative? (You’ll need to make some educated guesses here – don’t worry about being exact).

So I’m imagining that the company I work for is a company selling t-shirts, therefore I would not choose to build our e-commerce platform in-house. Instead I would use some money to purchase a prepackaged website-building tool that has the capability to be scalable as our company grows and gains more customers. A reason for this strategy is that since my company is selling t-shirts which is not a very specialized product, as anyone could potentially buy a t-shirt, we don’t need any specialized features for our firms that the prepackaged website-building tool can’t give us. Another reason for doing this is that we need to build our e-commerce presence as quick as possible and get our company name out there, which is why I would choose the prepackaged website-building tool as it would be faster than building a platform in-house, it would also be more financially feasible than building an e-commerce platform in-house. Because of the fact that my company needs to quickly launch their website and gain an e-commerce presence, it would be risky to build a stable platform in-house as it is incredibly complex to build features such as shopping carts, credit card authentication, processing systems, inventory management systems, and order processing systems. Although I might be forced to hire a consultant to help me with this project, I think it would be less costly and more time efficient than to build a e-commerce platform in-house.

2.      Choose one of the open source web content management systems such as WordPress, Joomla, or Drupal, or another of your own choosing and prepare an evaluation chart similar to that required by Project 1. Which system would you choose and why?

Personally I would chose to go with WordPress because of its user friendly functions and works very well for small to medium sized e-commerce stores and websites. Joomla seems like a good option too, but requires more technical skills than WordPress. Drupal would be my last choice, even though it is the most powerful web content management systems out there, it requires the most knowledge and understanding of HTML, CSS, and PHP. This is why I would choose WordPress. Below is my comparison chart.