InformationWeek

Real-Time Web Shopping

By Charles Waltner

att Hyde, manager of Recreational Equipment Inc.'s nine-mo nth-old online store, had one misgiving about the Internet retail service: the lack of real-time interaction with customers.

But now, the Seattle retailer is tapping into WebSpeed, an application middleware product from Progress Software Corp. in Bedford, Mass. WebSpeed will let REI respond to online customers in real time by linking its Web site directly to its existing corporate back-office order-processing system. The technology will let the site respond to customers nearly as dynamically as a store clerk or mail-order service representative. "WebSpeed reduces processing costs, but that's not the compelling reason for going with it," Hyde says. "The compelling reason is customer service."

Big World
REI is one of the largest outdoor retailers in the world, with more than 50 stores throughout the United States and revenue of $484 million last year. REI was formed as a cooperative in 1938 and now has over 1.4 million active members, in addition to the thous ands of nonmembers who shop at its stores and order from its international mail-order catalog every year.

By using WebSpeed to tie its Web site to its order-processing system, REI hopes to provide dynamic, nearly instantaneous responses to almost any aspect of a customer's order, including inventory availability, credit-card approval, product reservations, shipping information, gift-card orders, and tax calculations.

REI is bringing these features online throughout the summer. Hyde says WebSpeed will help REI's Web store provide online shoppers with the same high-quality customer service they enjoy from the rest of the organization.

WebSpeed is an application-transaction middleware tool that serves as a "translator" between the HTML code gene rated at a Web site and the language of corporate transaction systems. It is robust enough to handle the complexity and high volumes associated with critical back-office applications. The software automatically processes HTML queries and requests sent by Web-site shoppers, much like a customer-service rep would enter information from a customer calling in an order over the telephone.

WebSpeed uses a "messenger" to transfer data between the Web server and WebSpeed's "transaction agents," which perform database transactions and translations between HTML and the back-office order-processing system. WebSpeed's "transaction broker" manages the pool of transaction agents for the most efficient use of computing resources.

By automating the entry of orders from the Web site into REI's legacy order-processing system, WebSpeed also unifies the Web site with the corporate network and eliminates the headaches and inefficiencies of operating two separate networks.

Ed Acly, director of middleware research at I nternational Data Corp., a market research firm in Framingham, Mass., says REI's use of WebSpeed leads merchants and other companies striving to create intelligent electronic-commerce interfaces. WebSpeed is one of the first commercial products to bring the power of legacy systems to the Internet, he adds. Products such as WebSpeed have the potential to radically boost the interactive capabilities of the medium. "One of my premises from day one has been that to do serious transactions on the Internet, you need middleware," Acly says.

Hyde describes his goals for the Internet store as "any time, any place, any product, any questions." The intrinsic nature of the Internet takes care of the first two goals-allowing for shopping at any time and from any location.

The Internet's limitless information capacity also helps with "any product." The REI Web store already lists 4,000 items and will offer the company's entire 6,000-product inventory by year's end. The largest REI print catalog contains only 600 it ems, and REI's 80,000-square-foot flagship store is the only location with room for all the company's products. WebSpeed helps complete the last of Hyde's goals by providing real-time information to answer any question.

While REI would not estimate the cost of implementing WebSpeed, WebSpeed Workshop, a development tool kit, costs $500 per developer. And the WebSpeed Transaction Server, which manages the exchange of information between a Web site and back-office systems, starts at $23,000. The first iteration of the Web store ran "well into six figures," Hyde says.

WebSpeed should be worth the investment. According to Progressive, the REI online store receives at least 70 orders a day. Hyde would not confirm those figures, but says the site is making money and is receiving much more than 100 orders a week. Sales at the online store from April to May jumped 44%, he adds. The company has enjoyed similar increases in previous months, significantly outpacing growth at any other store in the organization . "It's my sense that the Web site will become the organization's biggest store," Hyde says.

But implementing WebSpeed has been no small undertaking. One reason REI chose to go with WebSpeed is because it's rebuilding the order-processing infrastructure with Progress' fourth-generation development language and application server. The current order-processing system runs homegrown software on an Amdahl 5995 mainframe. The Progress-based system will run with an Oracle database on a client-server architecture based on IBM's RS/6000 Unix boxes.

Freed Up
Ralph Day, a systems development manager at REI and head of the team that researched a solution for the back-office link with the Web site, says using the same programming language on both the Web site and corporate network will help REI save money in the long run. It will free REI from having to expend time and resources keeping up to date on two technologies, he adds.

Also, because Progress uses object-oriented programming for its product s, REI is building a pool of reusable business rules encapsulated in objects that can be applied to either WebSpeed or the new order-processing system. "It helps if you choose something that will allow you to write all the applications for your corporate computing needs, not just for Web apps," Day says.

Once REI settles into WebSpeed and its real-time transaction link to order processing, the company will consider replacing Netscape Communications' Merchant Server running its Web site's interface with an interface based wholly on WebSpeed. The move would provide for even greater interactive capabilities, such as letting customers personalize Web pages to meet their specific shopping needs, explains Rod McLeod, VP of IS at REI. The company also plans to add other features to further boost the dynamic interactivity and information available from the site (see story below).

REI launched its site using Netscape's Merchant Server suite and the Netscape Enterprise Server. But as REI soon realized, Merchant Server works well for designing storefronts, but provides few capabilities for interactive transactions. "It pretty much stops there," McLeod says. "Customers weren't getting that real-time acknowledgement that they get from calling customer-service reps."

The Merchant Server translates HTML code into flat files for an Oracle database that comes with the software, but the server product provides no way to link a site with a corporate legacy system for customer-service order applications, McLeod explains. Merchant Server's database operates independently of REI's corporate system. So the Merchant Server, unlike WebSpeed, did not provide a way to create a dynamic, real-time connection to REI's back-office system.

To process an order from the Web site using Netscape's Merchant Server, REI had to download orders into the order-processing system each night, using an ad hoc batch-processing program written in C++. Once the orders were in the system, a staff person had to manually write an E-mail response t o confirm customers' Internet orders. Because of this process, customers would not find out about the status of their orders until a day or two later.

Solving Problems
Hyde knew that the rapidly increasing order volume from the Web store would eventually make any manual processing impractical. He also realized the online store would benefit from a product such as WebSpeed, which eliminates many of the common ordering problems encountered on the Internet.

Bill Bass, an analyst at Forrester Research in Cambridge, Mass., agrees. He notes that real-time, automated responses to Internet orders help improve inventory management and provide customers with immediate satisfaction. "It would be a customer-irritation problem if the site did not notify someone about an out-of-stock item until two days after an order," Bass says.

Bass adds that most traditional retailers with Web sites have not yet linked their back-office systems to their electronic storefronts, mainly because of costs. It can cost a company a few hundred thousand to several million dollars to reengineer legacy systems so they can smoothly integrate with Internet operations, he says.

Sound like a lot? Maybe not. These expenses, Bass says, can pay off big time if a site has enough volume. That's just what REI is shopping for.

See related story " More Than Just Interactive Ordering "

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