Giving clients a reality check on digital rollouts

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This article appeared in the March 2016 issue of CRN magazine.

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Giving clients a reality check on digital rollouts
From left: Paul Boisvert, VP of product management, Magento. Theo Smallbone, co-founder, Venroy. Alisson Oldoni, head of development, Netstarter

One of Australia’s largest e-commerce agencies understands politics. The politics of business, that is. Netstarter has chosen to specialise in taking large franchises – with their many and varied franchisees – online using complex, omni-channel models. It is all in a day’s work for Netstarter, a 140-staff digital agency and award-winning Magento partner that was acquired by ASX-listed communication giant Salmat in 2013.

Dealing with scores of business owners in a single project adds a layer of complexity to the job of executing an omni-channel strategy, says Justin Milwidsky, Netstarter’s general manager of product and strategy. “You have all these competing stakeholders with different ambitions. They need to buy in otherwise it’s destined to fail.”

One of the company’s recent successes was the digital launch of the Barbecues Galore chain. The parent company has control of 60 percent of the 92 stores. Some longstanding franchisees had done their own thing with IT, which made it more challenging to provide a consistent experience for digital visitors. “It makes integration harder,” Milwidsky says.  

Divergent business models also pose a challenge when trying to implement a single digital strategy. “Do they want to focus traffic into the store? Do they not need to be price competitive, because they’re in Bundaberg and want to focus on service? How do you be competitive without putting offside the regional stores? How do you assign revenue? To the closest store or break it up?” Milwidsky says.

The politics in a multi-owner project sometimes lead the client to make less-than-ideal compromises just to get the deal over the line. “Some say, ‘We know this is lunacy, but this is how we work.’ You may think it’s overkill and doesn’t make commercial sense, but logic sometimes goes out the window with franchisees.”

Software agnostic

Today’s Netstarter is worlds away from the small agency that began life making company websites in the 1990s. By the 2000s it had moved into digital strategy with proprietary content management systems. By 2007 it began to focus heavily on e-commerce, at the time considered an island by retailers.

Along the way the agency expanded its knowledge from point-of-sale to ERPs and everything in between. “We learnt there are very few companies or individuals who have that breadth of knowledge across all the services,” Milwidsky says.

Netstarter remains agnostic when it comes to recommending software. They have worked with SAP, Navision, NetSuite, Pronto, Harmony and Retail Vision. “We know the ones that are easier to integrate with, that have more flexibility,” Milwidsky says. Netstarter doesn’t do the implementations, but connects the client with consultants.

One application currently in vogue is point-of-sale solution Erply. It costs $150 per store per month, plus implementation costs, for unlimited numbers of sales reps. Erply implementations can cost as little as  $15,000 to $80,000 for up to 250 stores.

Cost is a vital consideration for Australian retailers, which can easily overcapitalise on a major IT project. Whereas US retailers, with their enormous scale, can see immediate return on investment, our smaller market size forces companies to be prudent around their investments. Netstarter avoids this scenario by backwards engineering from the percentage of online sales to the projected growth rate. This derives an estimate of the market size, which makes it easier to understand a worthwhile investment in IT.

“Do you have $150,000 to $500,000 or more to spend on an ERP? You don’t want to look at peaches and buy bananas,” Milwidsky says.


FACT FILE

  • Head office North Sydney, NSW
  • Established 2006
  • Parent Salmat
  • Headcount 150 (Salmat digital division 300)
  • Top executives Justin Milwidsky (GM product and strategy), Craig Shotland (GM for programs and tech delivery), Shaun Polovin (Client Performance & Optimisation)
  • Sectors Retail, franchises
  • Partners Amazon Web Services, Magento, Kentico, DotMailer, Oro CRM, DL
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