Putting The Tech in Teddy Bears
Vermont Teddy Bear Co. markets the Bear-Gram gift delivery service, and manufactures hand-crafted, American-made teddy bears. The company sells directly to customers via phone, online and at its factory retail store that receives over 150,000 visitors a year. The company has been growing at a rate of more than 50% since it reported $21.5 million in sales for its fiscal year ended June 30, 1999. In this fiscal year, more than 350,000 Bear-Gram gifts will be delivered around the world. Approximately 35% of these orders are received via the company's Web site, VermontTeddyBear.com, triple the level of the prior year.
Q: Vermont Teddy Bear reported record order levels over Valentine's Day. What role did technology play to enable this?
We do 20% of our yearly revenue during the Valentine's Day holiday -- maybe the first two weeks of the month. We took a little more than 25,000 orders on the 12th of February and on a daily basis -- on a regular day -- it might be in the 500 to 1,000 range. In total for month of February we had 110,000-plus orders. In the month of January, the total order for bears was between 15,000 and 16,000.
Our goals really revolve around generating revenue and providing capacity for those peak holidays like Valentine's Day and Mother's Day. We do everything we can possibly do very innovatively to make sure we handle the volume increases cost effectively. We build our Web hosting infrastructure to handle order entry to handle peaks so we don't have to have dedicated frame relay or data connections directly to these outsourced providers [customer order agents]; they can just go on our Web site and take orders. We can seat 200 agents here but we probably need 1,000 on special holidays. We have ultimate flexibility because they just go to our Web site and we usually use that site for consumer traffic. When we're using it for agents to enter orders, we divert customers to our Yahoo! store.
We maintain our own hosted Web site...we augment it with Perl and PCP and other programming languages to create more functionality. We use that most of the year because we pay a percentage of our sales [to] Yahoo! We only divert [orders] to them when we need to. So it doesn't make sense to build an infrastructure for just those four weeks that are the highest peaks for orders. Technology plays a very important role in maintaining peaks because we could never with the support staff we have here year round, ever handle the volume of embroidery, volume, processing of orders and shipping, if things were not automated.
One thing that's interesting about Vermont Teddy Bear in IT is, we really have several businesses under the same roof: a retail store here and a satellite store in Waterbury [Vermont], a contact center here that gets quite large and so many pieces of technology and software that come into play.
Q: What's your view on the implementation of new technologies and bleeding edge versus a more conservative approach?
Basically, we evaluate need versus risk and we do things only when they make absolute sense to do so. We try to use cost effective and proven technology and we never use technology just for the sake of technology. It must meet a business objective.
A lot of times there are not always opportunities to plan things out since we're a marketing-driven company and...sometimes we have to be innovative to get something done. We're constantly exploring alternatives in telecom...we try to explore things on a small scale without a big cash outlay when we're trying things out. For example, what we've done for the past two years at Valentine's Day, we truck a truckload of bears -- about 3,000 -- to Memphis, Tenn. and bring down equipment for picking and shipping and actually have another Yahoo! store that we link to our Web sites and people can make a purchase and we ship it out the same day [up to] the night before the holiday with guaranteed delivery the next day. We can do that because we just operate that Memphis location temporarily. Even this Valentine's Day we partnered with a group from Sun [Microsystems] and a company called Corporate Technologies and tested 12 Sun Ray appliances for taking orders and for Mother's Day we're going to partner up with a vendor and we've purchased three blade appliances, which is basically like a rack-mounted PC. So one thing we do is work with vendors to get them to give us things to try before we purchase something.
Q: Is more money being spent on network security this year?
I don't think so. I think it's pretty much the same as last year.
Q: What is the bulk of your budget being spent on?
Outside services and telecom services are quite large. Outside services in my budget line are considered maintenance and support agreements with software and hardware and services like a company we work with that monitors our Web site for performance. That's a big portion. But IT has charge of all of the networking equipment and telecom equipment and printers, faxes and phones, so theres a lot of service agreements. Plus the software.
Q: What else is occupying your attention these days?
One of the things we've been dealing with recently is our Web storefront strategic plan. We're trying to work with our order processing software company to make a more seamless interface between the Web site and the back end. We're also trying to figure out a better way to manage inventories...Another thing I'm concerned about now is integrating our applications and making sure all business critical applications and processes are documented. There are probably enough Excel spreadsheets and Access databases in different departments that may or may not be documented.
Q: How large is your IT staff and what skills are you in need of?
There are five others besides me for the three companies. Right now for technical skills we need Novell because we need a new network telecom person. I've been in IT for a while and more recently, because everyone has a computer and knows Microsoft and has a Web page, it's very difficult to determine the depth of someone's knowledge when you're interviewing them. So right now, people think they have skills when it's very rudimentary or basic, and we need very in-depth skills. Because we have multiple businesses and a small staff we need versatility; someone who can function in different roles. We have a Web developer so we need Perl, Visual Basic, Microsoft Access, MySQL, PHP, and Sybase and telecom resources as it pertains to a call center.
I report to the CEO/president. All of my goals pertain to revenue generation and operational efficiencies, broadly. Anything to handle peak cost efficiently. We're very marketing driven so we're very heavily weighted to front-end support. We've been through three different email campaign providers, so at a moment's notice we may find out a company is going bankrupt. We have WorldCom and that was big thing earlier in year when deciding whether to stick with them. We did and now they're MCI again.
Q: Which of your skills has served you best in managing IT?
A lot of it is critical thinking and logic. You need to be able to see the 20,000-foot view and the details. I started out as an application developer and I've been in IT for a while and...I'm enabled to know what's capable -- what the capabilities are of technology and what makes sense to do. Sales people can come to talk to marketing and make a big presentation but you have to get real. Also, I think being logical and thinking critically and understanding the broad view [helps] you understand things better. We're a small company and...we don't spend hours and days deciding what we're going to do next. Things get thrust upon us pretty quickly so you have to think adeptly.
Q: What advice would you give someone looking to advance his or her career the same way you have?
Understanding the big picture and being able to go from general to specific and back and forth to see the total integration of everything. To learn and assimilate all the business activities as much as possible to see the whole. Sometimes if you don't see the impact of something you're doing on the next thing you can have a lot of problems and can't anticipate all the issues if you don't try to see it across everything.
Q: What keeps you awake at night?
Probably during peak [times] it's the next bottleneck, the next issue the next thing you have to deal with and you have to make sure you have a Plan B because we stress our systems so much on the holidays. The next marketing initiative they're going to want us to do on a moment's notice. Right before last Mother's Day we started Pajamagram and had to create the systems to do that. How do we support on a long term these new ventures that start out small? How do you convey the perception it's not necessarily scalable.
Q. What do you do in your spare time?
I have very little. I read mystery novels...and try to keep fit with exercise and family, friends, that kind of stuff. Delete spam emails.
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