Mid-sized specialty retailer Peet's Coffee & Tea gave online patrons a map to its doorstep, then watched sales grow into the millions.
What hospitality establishment would you most closely associate with a college town? Bars probably come to mind first, but the roots of caffeine as a mainstay of the college diet go back at least as far as 1966, when at the University of California, Berkeley, Peet's Coffee & Tea was the provider of choice. After 20 years of peddling hot cups of joe and bags of fresh roasted beans, requests from those who'd tasted Peet's coffee began to pour into the retailer's corporate office from around the globe. For the cost of a pound of coffee plus shipping, the company would mail out a fresh-roasted pound of its finest. What began in the late 1980s as a courtesy on the part of Peet's has grown into a multimillion dollar, direct to consumer catalog and Internet business, as well as a burgeoning wholesale and retail operation.
Fulfilling A Multichannel Strategy
Today, you can buy Peet's Coffee & Tea anywhere in the country at one of Peet's 70 stores, at www.peets.com, in select grocery stores and restaurants, or through Peet's catalog. In addition to the health of its wholesale and mail order business, the company has leveraged the Internet as a primary sales channel. The Internet is used for the placement of orders from Peet's retail stores and direct channel customers. Orders for beans placed via the Web are custom roasted when the orders are received, then they are sealed, shipped, and delivered anywhere in the United States in two to five days. Peet's stores use the Internet to order stock from the company's roasting facility two to three times per week via the retailer's DSL (digital subscriber line) network. Call center associates also process phoned-in orders from recipients of the Peet's catalog as well as wholesale distributors.
The Internet has proven a powerful tool for processing sales from many channels. Combined with GIS (geographic information system) technology, it's also proven a powerful tool for steering patrons to Peet's brick-and-mortar stores, grocery outlets, restaurants, and wholesale distribution partners. After the company completed its first major Web site upgrade and expanded its use as a sales channel in 1999, it linked to an application from an Internet map services provider to provide site visitors with directions to brick-and-mortar locations. Later, it outsourced the service to a second map services provider. Bruce MacLaren, a former vice president of direct delivery for Peet's and now vice president of business development at GIS and Internet consulting service MoosePoint Technology (Santa Rosa, CA), said neither product fulfilled the retailer's needs. "The map route serving capability was not the problem with either of these products," says MacLaren. "Neither service could be transparently and cost effectively integrated into the Peet's Website, and neither service was responsive enough to Peet's needs." The retailer needed the ability to add retail outlets to its store locator rapidly, as stores opened and new distribution deals were struck. MacLaren says Peet's previous solutions wouldn't scale with this rapid growth. "That created frustration, because customers weren't getting current information about new stores."
Hosted App Makes Updates Easy
ESRI's RouteMAP IMS product now drives the store locator at Peet's. The application is hosted on a server in MoosePoint's data center. "We handled the integration with the Peet's Web site, and we keep the data fresh as Peet's grows. We can add locations as they become live," says MacLaren. The application itself is database intensive. Each release of the software includes updates on exact address locations according to latitude and longitude, as well as intricacies such as street speed limits and direction orientation of streets. Algorithms combine all of this data to produce accurate directions. The updates handled by Peet's are limited to the addition or removal of store locations. "The software itself requires fairly sophisticated geospatial capabilities that people take for granted. The product was in development for years, but now it's commonplace," says MacLaren.
MacLaren says the store locator page was inexpensive to build, yet proves among the most popular features on the Peet's Web site. "The ESRI product costs less than $3,000, and the data pack is an additional $3,000. The whole budget of the project was in the neighborhood of $15,000. This expense isn't big enough to worry about measuring specific returns," he says. The real goals of the project are achieved simply by allowing people who are introduced to Peet's through any channel to buy Peet's merchandise in their neighborhood. "When the Internet took off, calls asking where to get Peet's practically went away. Then, the store locator virtually eliminated the e-mails asking the same question," says MacLaren.
Next Step In GIS Mapping
With multichannel becoming mainstream in retail and the Internet playing the lead role, GIS will continue to make inroads into retail. As the tools develop, they will become easier to integrate and maintain. GIS software has come a long way in recent years, as more powerful computers and faster Internet technology have taken applications from the mainframe to the PC. Are you using this technology to give your online visitors every opportunity to visit your stores?