By Christopher Field

Waterstone's, part of the HMV Group, has 12 per cent of the UK book market with its 224 stores but has had bigger ambitions since it first went on line in October 1996.

Initially, the web site was designed and hosted by the same company, Hyperlink, and offered book searching among 1.2m books, secure ordering, diary, Waterstone's club and online chat. However, according to Andrew Hatton, project manager, the technology was holding the company back, particularly as Amazon continued to use its huge market capitalisation to invest in web interface and back-end fulfilment systems.

Based on an in-house developed application and web server, the site was unable to deliver new functionality quickly or cost-effectively, he says. "Hyperlink had to perform a time-consuming software upgrade to meet our request for the site's pages to change more rapidly."

As a result, Waterstone's decided to revamp its web site and was willing to undergo a complicated implementation process. This included numerous hardware and software vendors, as well as integration and design consultants, to develop the ideal retail site. Working with Siemens, web site designers Brainstormers and e-commerce integrator Nvision, Waterstone's developed an enhanced e-commerce site in 12 weeks.

r Hatton says: "The site's increased functionality has enabled us to establish a more aggressive e-commerce marketing programme and combat increasing competition from international online-only retailers, such as Amazon."

The star in the vendor team seems to have been Nvision which handled the back-end integration to link the new solution to Waterstone's existing business systems. The integrator performed a "Swot" (strength, weakness, opportunities, threats) analysis to identify the market opportunities for an online bookstore, and these were then matched against Waterstone's existing capabilities, both on the web site and in the supply chain.

Books are now represented visually by book jackets, in an attempt to match the experience of browsing through titles in a book shop. The site includes a virtual "greeter", which pops up in a window to give instructions and show customers where to go to complete orders. Members of the Waterstone's club have access to an online version of Waterstone's magazine.

The site also offers electronic gift vouchers, personalised browsing and online author events such as readings and question-and-answer sessions. Waterstone's has also developed branch pages that provide each store with its own pages and URL. Once the site is further integrated with stores, customers will be able to look at online book selections through store kiosks.

Now Waterstone's plans to introduce features that will provide greater personalisation on the site. For example, customers will be able to send e-mails to request information about specific books.

In the first two weeks of the new site's operation, the amount of the average order increased by 25 per cent, says Mr Hatton. And the branch pages have enabled individual stores to operate their own sales and marketing campaigns." The system is used mainly by customers in the UK, Europe and the US, but a growing number of new customers browse and order books from Asia, Australia and Africa.

Waterstone's also regards the web site as a stepping-stone to future technologies such as digital TV and web phone shopping.

"We view it as strategic to our future business, and therefore it's in our interest to gain as much experience and exposure to the medium and methodologies now," says Jonathan Wilson, internet business manager.

The technology running the site comprises Sun servers running Netscape Enterprise, Intershop 3.0 Enterprise, Oracle 8.0 database and an NT server running the Alta Vista search engine. A wide area network links up with an IBM AS/400 server to run Eclipse, a web version of Waterstone's existing Phoenix order fulfilment system.

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