High street bookstore Waterstone’s is ending a five-year relationship with Amazon and developing its own e-commerce site.
The retailer has been using the back-end system from Amazon since 2001 to enable its customers to buy books online. Apart from the website’s home page, the ordering and delivery process was handled by Amazon.
Waterstone’s is at the planning stage of a project, which will result in the launch in the autumn of an online bookselling service based on the e-commerce system developed by parent company HMV.
The strategy is to offer a point of differentiation to Amazon. Waterstone’s said, “We will have more integration with our bookshops and have linked services.”
One of the business goals of the new site will be to improve customer services. This will be achieved using a fully integrated system.
Atul Hindocha, e-commerce change programme manager at Waterstone’s, said, “The set-up with Amazon was almost an outsourced arrangement. Now we plan to develop a wholly-owned Waterstone’s site, with full supply chain integration.”
The project will involve linking Waterstone’s buying, supply chain, order management, fulfilment and customer relationship management systems, by adapting the IBM Websphere-based HMV e-commerce system.
In spite of the apparent complexity of the task the project team faces, Hindocha said Waterstone’s already has an architecture that works for the company.
Samad Masood, an analyst at Ovum, questioned the wisdom of Waterstone’s revised e-commerce strategy. “I am surprised if it would be cheaper to integrate the HMV system than improve the partnership with Amazon. Waterstone’s may have a good e-commerce system, but can it be as good as Amazon?” he said.