The CMS Connection
Back in the bucolic 1950s, when “on line” meant waiting for the next cashier, HobbyTown was a little store in downtown Lincoln, Neb., catering to the locals. Today, HobbyTown USA has more than 170 locations in 42 states and a foothold in Australia ... and until last year, a website it couldn’t control.
HobbyTown, which specializes in everything from radio-controlled cars and planes to rockets and slot cars, grew steadily over the years through franchising. The company hopes to open 20-25 new stores annually over the next several years with a focus on the United States and Australia. “We’ve talked about the possibility of getting our feet wet in Toronto and Vancouver,” says Tim Van Ert, senior vice president for HobbyTown, “but there’s still plenty of growth in the U.S.”
The company’s initial foray into online sales in the early 1990s met with poor results, according to Van Ert. “Our first venture was a very simple website where customers could place orders and e-mails were sent to the stores,” he says. “They fulfilled the orders and shipped them out. It failed miserably, because at that time [store associates] were checking e-mail once a month.”
In addition, “The technology wasn’t there for us to represent individual stores, as far as what they had available and what their pricing was,” he says.
Another factor: Franchise agreements “that specify protected markets for individual stores,” he says. “When the Internet came around it didn’t abide by those rules, so we had to spend a lot of time and money working out the logistics of how to satisfy franchise agreements -- solutions that would enable stores to grow without competing against each other in their own markets. That was a big hurdle to get over.”
The previous system did not adequately represent the HobbyTown brand or its individual stores online, Van Ert says. “Basically, we had a website that didn’t sell. The inventory online wasn’t represented at the store and online pricing often didn’t match that of the stores. Customers got upset.”
HobbyTown needed a better solution for managing the business – and pricing consistency in particular. “Customers don’t understand the dynamics of the business,” he says. “But they got upset when they saw different prices online and in the stores.”
The retailer worked with one local company to develop a site that would represent inventory and pricing of individual stores online, but its backend operations “weren’t robust enough to handle our volume of products.
“We realized we needed a powerful content management system,” Van Ert says. “With Ektron, content management was the starting point. It was a content management system that could add a website for fulfillment.”
HobbyTown and Ektron began working together in February 2011; the new system was rolled out in July of that year. “Initially there were some limitations on functionality, but over the course of the year we worked with Ektron to add functionality on the product availability side. By last January, all our major issues had been addressed and we’re very happy with the system.”
Unique store URLs
The real benefits of the new system are twofold. “We’re in the relationship business,” Van Ert says. “For our customers, a hobby is not like buying a refrigerator or a garbage disposal. This tool gives us the ability not only to sell online but also [act as] an information source that can tell new people about HobbyTown.”
Each store has its own web page for local promotions and to interact with its customers. It’s “more than just an e-commerce fulfillment system,” Van Ert says. “It’s a complete package with unique URLs for each store.” The system communicates at regular intervals between the website and each store to maintain real-time stock levels and pricing.
One of the features of the Ektron system “is that you can set up different versions of our website, so we can adjust how a process happens, display it to multiple customers and then find out which one …made them stay on the site longer,” he says. “We can ... even change how the main page looks for different customers, and which versions are getting more people to the shopping cart.”
“It took a lot of work,” Van Ert says. “Right now we are representing about 70,000 SKUs online -- huge amounts of data moving back and forth that need management. And we are continuously expanding our product lines.”
While many multi-channel retailers offer in-store pickup, HobbyTown is at a level no one expected. “Our goal was 30 percent,” Van Ert says. “But in 2012, an average of 50 percent of online transactions are being picked up in store.” Moreover, the new site helped the company convert 42 percent more web visits into sales in January and February 2012, compared with the same period a year earlier.
“For some customers the HobbyTown site is the equivalent of their local hobby shop,” says Dave Stanley, director of web development and business intelligence for HobbyTown. “Bringing together retailers with customers is very important to us and we want to make sure of a tight personalized connection between the online and in-store experience.”