The appliance of science

Growing from one shop and four staff to a £24 million national company in six years has been quite an achievement for kitchen appliances retailer Trade Appliances – especially after fire destroyed its headquarters and all its stock and delivery vans two years ago.

Its fast growth is down to the vision of founder Mark Fawsitt in putting the company online in 1999. Its website now generates 85% of total sales – and saved the company by enabling it to provide uninterrupted service through the fire and its aftermath.

Fawsitt started Trade Appliances with a shop in Nottingham in 1988. The housing market was booming, creating huge demand for built-in kitchen products such as dishwashers, range cookers, fridge-freezers and microwaves. By the late 1990s e-commerce had arrived and he saw this as a cheap alternative to opening showrooms one by one to fulfil his ambition of becoming a national company.

London company, Kiss Technology, was contracted to develop a single system to manage orders taken online, by phone or in the shop. He took on an e-marketing manager, Emma Lowe, from a local newspaper, where she had got involved in various aspects of putting the paper online.

“It was still relatively early days for e-commerce and lots of people didn’t understand the potential and were very negative,” Lowe said. “Mark’s attitude was very refreshing.”

Trade Appliances went for a bespoke system because software packages were still not geared up for e-commerce, she added. “Going bespoke meant we could integrate everything and be as innovative as we wanted,” she said.

“For example, we send automatic e-mails to confirm online orders, and offer a text messaging service to keep customers up to date on their orders and deliveries. In addition, clients can access our online order tracking system.

“One current development is to enable customers to save quotes on their product selection so they can discuss it with their partner. If they make a selection in a showroom we can e-mail it to them. It saves them having to keep trawling through the website to find the products again.

“We have an IT manager but using a third party for system development means we can also draw on their experience from the wider market, as well as their expert technical knowledge. We present ideas and they describe the best way to implement them.

‘We sit in the boardroom with the website on a projector and explore what we could do. This is important, because things change so quickly.”

The e-commerce system itself helps identify changes. Sales information from the database helps highlight trends, and the most popular products can be moved to the home page.

Software can track visitors’ paths through the site from one page to another and list the most popular routes; this can also help with adjustments to the structure of the site and show the impact of changes to it. Trends in visitor traffic have encouraged Trade Appliances to increase the bandwidth and move to a faster server; it is also reducing the size of the product pictures to speed up page-loading times.

The website is, in effect, the company showroom. The heart of the system – and of the business – is behind the scenes.

“Behind the website we have an integrated system covering online, phone and showroom orders, all processed in the same way using the same systems, and sent to the dispatch department,” Lowe said.

“That means we have a single database that can be used to create a wide range of management and marketing reports. These reports allow managers to identify cost prices or profit margins and get real-time information about distribution and stock levels. This also improves the purchasing structure and communication with suppliers. Instant awareness of buying patterns means we can recognise trends and source additional items at advantageous rates.”

The integrated approach has streamlined processes, Lowe added, and eliminated the need for paper copies of order documents: everything is now online. More than 80% of all correspondence is by e-mail: this has cut response times, not to mention stationery, printing and postage costs.

Trade Appliances does not run its computer systems itself but contracts this out through Kiss Technology to a specialist computing services company. The critical nature of its systems has also led it to implement disaster recovery and back-up systems. Its entire database and website are duplicated and kept up to date at a second location; if the primary site were to be destroyed, a signal would be transmitted to the back-up system and the website would be restored in minutes.

Having the systems run by another company – let alone backed up by disaster recovery services – proved invaluable when fire swept through Trade Appliances’ headquarters and warehouse in September 2003, an episode that underlined the importance of putting the business online.

All its stock and administration were destroyed. The fact that its computer systems are outsourced meant not only that its customer, stock and financial records were safe but also that the website – the online showroom and ordering service – could continue as usual.

“By Sunday evening, less than 15 hours after the fire broke out, we had managed to contact every customer whose order might be affected,” Lowe said. “This customer focus won sympathy. Less than 1% of orders were cancelled and these were due to time constraints rather than our handling of the situation.

“By Monday lunchtime we were taking orders from people who were in effect still able to visit the showroom, by going online. It’s a web-based system, so staff could access it from anywhere. We had people working from home and anywhere they could use a PC. In fact, we went on to record our best-ever monthly sales figures.”

The company has been constantly breaking its own records since going online. Last year turnover doubled; the number of unique visitors has doubled from 5,500 a day to 11,000 in the past year; and a new headquarters opened in August 2004, 10 miles north of Nottingham, with a warehouse twice the size of the previous one hit by the fire. This enables it to bulk buy, reducing delivery times and costs. There are now also showrooms in Derby and Northampton, and plans for more. More than 6,000 products are on offer, at 30%-40% below high-street prices.

The showroom expansion underlines the importance Trade Appliances places on the personal touch. Many customers look at products online but still like to go to a showroom to see them before making a final decision. The fact that 85% of orders are generated by the website does not necessarily mean that all the orders are placed online.

One personal touch is that the company phones every customer an hour before a delivery is due, on the agreed date, eliminating the frustration of having to stay at home all day on a vague promise of a delivery time.

A call-back facility enables people to click a button on the website and enter their phone number and someone will call them – a nice touch here is that the website reminds them to go offline if they use the same line for the phone and the Internet.

Customers can be contacted by phone rather than e-mail on other matters if they prefer.

The website home page has been redesigned to include information on the Internet Shopping Is Safe scheme run by the independent Interactive Media in Retail Group. The scheme, which accredits companies as offering safe online shopping, is supported by Trade Appliances and the likes of Marks and Spencer, BT, Boots and Tesco.

“We recognise that a small percentage of people remain wary of shopping online,” Lowe said.

Disabled people have also been taken into consideration, for example in the choice of text size and colour for visually impaired visitors.

“We undertook an intensive period of research and development and invested a substantial amount of money to ensure the website was aesthetically pleasing, really easy to use and offered total customer satisfaction,” she explained.

A measure of that satisfaction is the fact that more than 30% of orders come through customer recommendation.

“We’ve been through a period of phenomenal growth,” said Lowe.

“The launch of our e-commerce operation opened the doors to a UK-wide audience.”