March 18 2007

Virgin harmonises music channels

Following Virgin Retail's recent announcement that it is to revamp its Megastores site for a relaunch in "early summer", we asked Kathryn Leak, Head of Online, about the company's choice of suppliers. (And found out about its planned film download offering).

The existing Virgin Megastores site has been live since April 2005 and saw "really great growth" in terms of visitor numbers and revenue during 2006. (Sales over the Christmas period rose by 191% on the previous year.) "The design is a bit dated," said Kathryn Leak and the growth in the product catalogue has made existing internal systems and processes too cumbersome.

Leak explained that they wanted to capitalise on, and achieve a step change, in growth so appointed e-commerce consultancy Javelin Group to conduct a full review and advise on technology and agencies and to implement the new e-commerce platform. hybris, Mercado and Underwired were selected for the new site.

The hybris e-commerce platform was chosen because it was "developed to cope with a large volume of products and its ease of use for back-end people. We are having quite a lot of input on promotional modules," said Leak.

Virgin has been using analytics to track its customers around the existing site and to analyse purchasing habits. Customers had been navigating to a certain point and then leaving. "We wanted to allow customers to navigate right to the core of our product offer with ease so chose best of breed navigation. There will be no dead ends."

The top level of the new site will be merchandised by the hybris system and once a customer starts interacting at a product level the merchandising will be handled by Mercado.

Underwired was chosen as the design agency to completely revamp the look and feel of the site with key features, including search and navigation, adding to basket and making purchases, encompassing clean brand elements which are familiar to customers in Virgin's bricks-and-mortar stores.

In addition to the development of the new site, Virgin Retail is planning to increase the product breath of its CD, DVD and Games catalogue as well as taking additional entertainment related product and delivering rich media content to enhance customer experience.

An improved customer order solution for all stores is being implemented as part of the new site and customers will be able to have purchases delivered to a store or to their home. A track and trace facility is also being implemented.

Virgin Retail decided to bring development in-house for the first time in order to achieve greater control and a better tie-in across the different sites and shops. There will also be a greater level of integration between the Megastores site and Virgin Digital (the group's digital download site), with customers able to listen to 30 seconds of a song before deciding to purchase a CD or download the track.

Although online is run separately to the stores, with each business buying independently, core purchasing is becoming streamlined into a central operation.

The company is forecasting that visitor numbers will triple each week with turnover increasing as a result. Online currently accounts for less than 2 per cent of overall sales and the company aims to increase this to 5-10 per cent within 5 years. Virgin Megastores has an 8 per cent share of the overall UK market.

In a separate move, Virgin Digital is planning to roll out video downloads later this year. The expansion will start with video singles, such as pop videos, in Q2 and move onto full film downloads during Q3.

The business model for the film downloads hasn't been finalised yet since the company is still in negotiation with the different film labels which each have their preferred delivery method; rental subscription, pay as you go, the authority to burn to DVD and DVD backup sent via post. The company did tell us that everything else is ready to go.

Emma Herrod