Magazine Article | July 1, 2001

Sharpen The Sales Process

Source: Innovative Retail Technologies

Payment processing expanded Sharp Electronics of Canada's options as it directed a B2C (business-to-consumer) strategy through its Web site and call center.

Integrated Solutions For Retailers, July 2001

Johnny's parents bought him a Sharp scientific calculator from a local retail store in preparation for the upcoming school year. Like a typical child of the technology age, Johnny never bothered to read the operations manual that came with the complicated mathematics device. But, by the midterm exam, the student wished he could find the discarded manual to put some of the complex functions to work. But where does he find an extra instruction manual for a calculator that was purchased six months before?

This is a situation many customers face when it comes to replacement parts and accessories for electronic home and office equipment. Sharp Electronics of Canada, Ltd. (Mississauga, ON) realized that offering after-sale merchandise to its customers directly through a Web site and call center could increase sales and customer satisfaction. "It is a very competitive marketplace, and these days it is hard to compete on price alone," said Anthony LoGiudice, director of customer solutions group for Sharp Canada. "The only thing that differentiates us from everyone else is after-sale service and support."

The company's first step was to enhance in October 2000, which serves as a B2C (business-to-consumer) forum for orders. The payment processing technology Sharp Canada installed for the site also enabled its call center to process customer orders instead of always referring inquiries to the company's distributors. This was the company's first attempt at altering its business from B2B (business-to-business) to selling directly to consumers.

A Change In Business Focus: B2B To B2C
In the past, when customers needed replacement parts or supplies they contacted a retail store or called Sharp's toll-free customer service number. But retail stores do not normally carry discontinued or old merchandise, and customer service representatives (CSRs) usually referred customers to a parts distributor because the company did not sell direct to consumers. This sent customers (and their money) away to another CSR to explain their replacement parts needs. Since Sharp's distributors did not carry as wide an inventory as Sharp Canada, the distributor sometimes had to order parts from Sharp Canada anyway. This caused shipping delays and was inefficient for everyone involved. "Our parts warehouse contains about 125,000 SKUs (stock keeping units), and now we can ship directly to the customer in two days," LoGiudice said. "We have been able to bring this process in-house without increasing our people power." Sharp Canada still deals with one parts distributor for technical parts such as transistors, but any part or accessory that customers can replace themselves can be purchased through the Web site or the call center. The site averages 4,000 to 5,000 shopper visits per month.

E-Business Expansion Leads To Sales Expansion
An important aspect of expanding the company's e-commerce strategy from B2B to B2C was implementing a payment processing solution that could manage both the online sales and call center orders. Sharp Canada chose to work with Payment Services Interactive Gateway Corp. (PSiGate) (Mississauga, ON), a payment processing service provider. Using online transaction processing software from ClearCommerce, PSiGate offers Sharp Canada platform independence, fraud screening, real-time online sales management tools, and an open API (application program interface) for integration with any storefront software. The ability to charge customers directly not only increased Sharp's replacement parts sales, but it also laid the groundwork for additional customer service features and extended sales opportunities.

For example, if a customer calls Sharp Canada regarding a defective fax machine that is still under warranty, Sharp can use the payment processing system to ensure that it will not lose money or merchandise in the exchange process. Sharp sends the customer a replacement fax machine and takes the customer's credit card information. This allows the company to put a hold on the charge until it receives the faulty machine. If in a certain number of days the company does not receive the return, it will charge the cost to the customer's credit card. Another customer service aspect that Sharp Canada has been able to offer on the Web site is its extended warranty program. Customers can purchase additional maintenance coverage on any Sharp product through the Web site, and the company can process the charge through PSiGate.

In March, the Web site extended its online product offerings to include refurbished products that retail stores chose not to resell. LoGiudice said the next step is to sell select new merchandise on the site, which the company is testing with two new models of Sharp's ink jet printers. Sharp Canada's e-commerce strides have not gone unnoticed by customers or other subsidiaries within Sharp Electronics. The United States division is also investigating Sharp Canada's infrastructure after seeing its success with the e-commerce strategy.

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