Virgin scores with VoIP

Virgin Megastores has 17 locations in the U.S., where it sells music, electronics and fashion products. But the retailer is in the entertainment business as much it is a seller of CDs, DVDs, and gadgets, says Robert Fort, IT director for the Virgin Entertainment Group. Like many distributed businesses, Virgin is consolidating voice and data traffic onto one IP network to save costs. The company is also using its WAN as a tool for delivering digital content, such as music clips and video, to kiosks in the stores, as well as multimedia content to digital displays and screens. Fort talks about the challenges, surprises and rewards in converging voice, video and data over IP.

What was your business case for installing IP telephony and VOIP in the stores?

All of our voice was provided by individual PBXs at the stores, with local providers doing adds, moves and changes – basic technical support. We evaluated a number of things all at once, and decided to get a new service provider and converge our voice and data, which was SBC, which is now AT&T.

We’re like any other IT organization, where you’re trying to consolidate costs. One of the key costs is always your labor costs. How to consolidate costs?How do you take your network administrators, and how do you make the most use of them? How do you set them up for the most success?

When we implemented [Cisco] CallManager and unified messaging, we made sure that it connected with our Microsoft Active Directory, so that when we add a user onto the system now, they’re added into the network directory, the voice directory and the [e-mail and voicemail] directory. The same two network administrators I have who take care of Microsoft Exchange and those servers can now take care of the phones and voicemail system too. So we didn’t really have to add in another person to do that; there was enough bandwidth left in those people that I could add on VOIP without having to mandate a new headcount.

Does VOIP offer any other areas of cost savings besides labour?

We’re getting tremendous cost savings by having least-cost routing. That means that when someone places a call out of an L.A. store, say to a New York phone number – maybe a hotel or office, or some public number in New York City – that call goes through from our L.A. store to our Times Square store first. From there, the call gets initiated as a local call. It’s a tremendous cost savings, given how geographically dispersed we are.

What was the idea behind network-enabling the music kiosks?

Traditionally we had lots of CD players that were facilitated in these analog-based listening stations. The thing about that is that you can only listen to the one CD that’s in the player. So our idea was how can we use the new digital technologies and create a kiosk experience where the customer can listen to any of the inventory in the entire store.

Along the way someone was showing me from a retail perspective Cisco’s content distribution. I thought this could be great, because it could cache the content for us. But the problem is that we have over 2.5TB worth of samples that these kiosks are going to have to access.

We didn’t want to replicate this database in every physical location I have. So we had to get all those samples into one location and minimize the network traffic – and obviously provide a fast and smooth experience for the customers at the kiosks themselves.

We are an entertainment specialty retailer, so when get people in the store, we need to entertain them as well as sell them stuff. So you want to look at the dynamic level of the store. The kiosks are an exciting part of it. Right now, we do a video reel that includes advertising and promotions and campaigns, and that includes video clips. And we push that out to the stores through DVDs to all the stores.

Compliance is an issue with that – not every store plays it as often as they should. So what we’re looking to do now is take that same video, that same content, and force it through part of what we call our screensavers at the kiosks. If the customers are not at the kiosk at the moment, there’s something that’s moving and dynamic that’s calling people out. It can be measured and compliance is there.

Does moving from CD-based to network-based kiosks cause bandwidth contention with VOIP?

We implemented the Cisco Application and Content Networking System [ACNS] to handle the content distribution. If a customer navigates through the kiosk and gets to the point where they want to listen to a track, it initiates an HTTP request back to the home office. The Cisco ACNS intercepts any of those requires to see if the kiosk already has [already accessed] that content. If it has, and the content is cached locally [by the ACNS device], the system sends the request back to the store and the content is served locally. The advantage to that is that it can handle any media file. In Times Square, the ACNS device’s hard drives can be partitioned. We’ve made a smaller partition that we can feed other content to. We feed that a video loop that is over our large Sony display screens in the stores. So content coming off that cache feeds digital displays.

Did you run into any surprises or challenges in deploying VOIP and content networking gear at the same time?

At the Times Square location, we added a second T-1 because we went into it and underestimated two key factors. First, we were doing the VOIP, then the digital listening stations came on. We looked around our stores and watched our customers for a long period of time and anticipated that probably only about 30 percent of the listening stations were being listened to at one time. So then we figured out what each transaction going to cost or weigh on the network in terms of bandwidth.

We were wrong. Our new listening stations are, in one measure, clearly a hit, because they’re being used closer to 70 percent of the time now. That multiplier cost us some extra bandwidth.

On top of that, there was the VOIP part. Our New York flagship store has a fair amount of back office to it. And our anticipation of the number of phone calls going out of that store was a little low; it’s tough to see the local phone calls, so we had to do some guesswork.

Our guesswork was off there too. We had much more voice communications going through there than we anticipated. Plus, when we turned on least-cost routing, we had to add in the calls that were coming from our other locations to get to that location for access area. So we ultimately had to install another T-1 in Times Square.

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