Chapters gives e-commerce advice

When bookstore Chapters launched its Web site in conjunction with The Globe and Mail last fall, it was a learning experience for Rick Segal, president of Toronto-based Chapters Internet.

“We launched with some amazingly hard problems we didn’t expect to be problems,” he said.

“The first problem we had was in doing things with the AT&T data centre (which hosts the Chapters site), we found out lots of different things about Cisco routers and the security that we established. When people were bringing up their browsers and it was saying, ‘No, you can’t do this, this is an unsecure site’ — we (found we) had overcompensated for a lot of things we thought were going to happen,” he said.

That was resolved in about a week, he said.

Then, although sales were running as expected, Segal found the distribution centre had its own set of problems.

The Web site was selling more books than the store had immediate access to, and customers were expecting to receive the books immediately.

“When you click a purchase button on the Internet, you’re dealing with a customer who expects it yesterday,” he said. “If you put up on the screen ‘Available in 24 hours,’ they’re on the phone just after clicking the button, asking ‘Should I stay home for this?'”

He said Chapters is learning how to deal with these high expectations as time goes on.

Segal explained how Chapters has also learned from a mistake it made by outsourcing the customer service division.

“Nobody knows your stuff better than you do,” he said. “We outsourced our customer service system. Very bad. Big mistake. Never do that.”

When people found out a book would be delayed and would ask customer service workers if they knew of an alternate book, they often would have no idea what to recommend. Chapters ran the risk of frustrating the customers and driving them to the competition,, Segal said. So recently, Chapters decided to bring the customer service system completely in-house.

Despite some of these ups and downs, Segal considers the site a success story.

He explained how it was implemented — the process as well as the technology.

“The first thing we did was a fairly exhaustive search of solution providers in Canada,” he said. Chapters picked a company called Cyberplex Interactive Media, a Toronto-based Web development solution provider.

He approached Cyberplex in February 1998 and stood very firm on the date he wanted to launch, wanting to make sure it was all set to go in time for the Christmas season.

“We said we have to be up Oct. 20. They laughed. And we said, ‘No, we’re serious,'” Segal explained.

The contract was signed in February, then April, May and June were spent developing the project. In July and August, exhaustive testing began. Segal said he was extremely pleased and impressed that Cyberplex delivered the product on time and on budget.

A Microsoft commerce solution was used for the project in a three-tiered approach. At the user interface level is the Web browser accessing a server running Windows NT Server and Internet Information Server technology. The second level, the business logic tier, includes search, content and transaction application servers running Internet Information Server and Site Server Commerce Edition on NT Server. And at the third level, the data management tier, SQL Server specifically manages the title and customer information.

Satya Nadella, general manager for Microsoft’s US-CSD-Commerce in Redmond, Wash., described Microsoft’s vision for its commerce platform.

“If you build a digital nervous system or you build a line of business systems that are running your company, commerce is all about extending that to customers and partners, and it’s about building stronger relationships with these customers and partners,” he said.

“So it’s about building a Web site, it’s about being able to attract traffic to your Web site. It’s not just doing transactions, but making the entire experience of how a customer or a partner is interacting with your business a key.”

As for hosting capabilities, Chapters chose AT&T.

“They’re really good — very professional, know how to deal with taking things down, back-ups, doing all the things they need to be able to do,” Segal said.

He said hosting was the most economical way to go because he can measure the costs and get bandwidth on demand.

A redundant design is also key, he said.

“We have a fully redundant system, we’ve got load balancing, four Web servers,” he explained. “If I have to put up another server, it’s just an hour because we have two of them that are on standby right now. They’re all on racks and they just sit there, ready to go.”

Chapters has been using Compaq hardware — Compaq rack-mounted Proliant servers. It also used Cisco routers and local directors.

“We haven’t had one server go down yet — no hardware failures,” he said.

For those undertaking a similar project, Segal recommended enlisting a solution provider, such as Cyberplex — even if you want to do it in-house, he said, it’s always good to have someone experienced involved to at least give suggestions and advice.

He also said customers exist and they do want to purchase things over the Internet, so don’t let the prospect of having no customers frighten you away from electronic commerce.