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Wizards.com
Wizards of the Coast, Inc.
Renton, WA
USA

Year: 2000
Status: Laureate
Category: Business & Related Services
Nominating Company: Microsoft Corporation

Secure virtual private networks guarantee safe passage of each data packet through the internet, combining the privacy of truly private neworks with the economy of the internet.
Wizards of the Coast Inc., a subsidiary of Hasbro, Inc. (NYSE: HAS), is the
worldwide market share leader in the trading card game and tabletop
role-playing game categories and produces the world's best-selling
Pokemon(TM) and Magic: The Gathering trading card games.


As a manufacturer within the hit-driven game industry, the
company understood that if all of its products were to receive proper
representation and exposure, it needed to interact more directly with its
end customers (exceeding 6 million players worldwide). In response,
Wizards decided to offer its products directly to consumers through an
online store based upon Microsoft and ClearCommerce technologies.
The online store's goal was to offer convenient one-stop shopping for
gamers to purchase all great games and related items with a thriving
community where players play games, meet other players, talk about
games, and obtain information.

The challenge, however, was
that as the major manufacturer in its industry, sales conflict with
distributors and retailers was of great concern. Adding to the challenge
was that the company had no existing operations or computer systems to
leverage to sell directly to consumers. However, the project did have the
opportunity to leverage Wizards' existing content-based web site that was
already very successful, receiving several hundred thousand visitors each
month.

Wizards launched its entire e-commerce operation in
just 8 weeks with one full-time person and approximately 100 products.
Less than a year later, the e-store is the featured element of the
company's web site and is supported by a staff of 7 full-time employees.
The e-store now offers the company's entire product line (nearly 1,500
different products) with comprehensive product information, supports
sales that have exceeded $4 million/week, and serves 1,000,000
visitors/month. The store is further enhanced through strong customer
service, and its robust game community.
Wizards of the Coast's online store has helped millions of consumers
worldwide by providing a convenient, easy to use, and reasonably priced
method for satisfying their gaming needs. Not only are visitors to the site
able to purchase products, read extensive product information, and try
online demonstrations, but they are also able to exchange ideas with
other players from around the world, find convenient physical locations
that offer tournaments and training sessions, as well as interact directly
with the company. The online store has also significantly helped Wizards'
overall business. It continues to grow in importance as a highly profitable
sales channel for the company and is a great resource for monitoring
customer demand on a product by product basis.

The web
site's full offering has affected customers, new and existing, in many
positive ways. The site places our full line of games at their fingertips,
allows them to obtain information directly from the company that is more
in-depth and accurate than that from any other source available, and
offers pricing that is consistently at MSRP whereas prices for the
company's collectible games may fluctuate dramatically in other sales
channels.

As a manufacturer that for several years relied upon
outside resources for appropriate product distribution and accurate
consumer feedback, the technology utilized for Wizards' online store has
dramatically altered how many of the company's fundamental tasks are
performed and has set new standards for processing information and
communicating with customers. The new streamlined e-commerce
processes now allow the company to respond to most outside requests
for information in a more timely manner. Additionally, the quality of
information collected directly from consumers has increased, helping the
company to better manage its business and respond to market
conditions.
Information technology forms the backbone of this project. It enabled the
company, in less than one year and with very limited resources, to create
a new, highly profitable business division with global reach. It has
changed many of the company's fundamental processes and validated
that manufacturers can offer products and services directly to end-users
without detrimentally impacting sales channels that offer value-added
services.

While using online store technology may not be
considered innovative in today's environment, its use does create new
benefits for society. The use of this technology by a manufacturer
validates that any product or service developer, regardless of existing
distribution methods, can offer its wares to all buyers online without
negatively impacting other business channels or
consumers.

The growth of the company's online store sales
and web site traffic resoundingly indicates that the target audience has
quickly embraced Wizards' online store innovation. However, we believe
that we've only just begun to tap into the e-commerce opportunities that
exist, and that further technological enhancements over the coming years
will enable the company to fully maximize these possibilities.


We believe that the online store concept does not define as
much a challenge for society as it does an invaluable opportunity. A
properly planned, implemented, and managed online store creates many
efficiencies for consumers and businesses. It improves decision-making
information flow and accuracy, offers better targeted choices, minimizes
non-value-added, time-consuming activities, lowers business costs, and
increases profitability.
While not the first in its industry, Wizards of the Coast's online store is
currently one of the most successful as measured by revenue, profitability,
order volume, and unique customers; rivaling all other known
game-based online stores. Additionally, our web site positioning
presents an original offering to consumers. The site presents
consumers with a complete game experience. Not only can consumers
purchase games online, they can play games, meet other players, talk
about games and find up-to-date product information. The exceptional
aspects of this project are in three distinct areas: Consumer, Company,
Individual Efforts

Consumer:

The online store was
an overnight success with existing customers and continues to drive
thousands of new consumers to the site each day. The simplicity of the
online store navigation and purchasing process has been applauded by
many as the best experience they have ever had online, and the
information available allows consumers to make well-informed
decisions, as well as feel part of a tight-knit community.


Company:

The return on investment for Wizards'
online store division is unmatched by any other division in the company's
history. The division's sales now account for well over 5% of the
company's total sales while its staff accounts for less than 1% and
operational expenses account for less than 2% of the entire company. In
addition, the e-store sales have not cannibalized sales via other
channels.

Individual Efforts:

Although a staff of 7
now runs the e-commerce operations, it did not start out that way. One
person initially launched the entire e-commerce site within an 8 week
period. This launch involved every aspect of the online store and
warehouse operations. In terms of the online store, this included store
design, navigation, product information and categorization,
merchandising, inventory management, credit card authorization and
fraud detection processes, customer service operations, and legal and
tax accounting issues. Warehouse operations included the installation of
a scalable order processing system integrated with shipping systems,
fulfillment and packaging processes. At the time of the online store
launch, Microsoft could not identify another e-commerce operation that
was so successful with so few resources dedicated to its creation and
maintenance.
The e-commerce project has been phenomenally successful and has far
exceeded its goals. It has surpassed revenue goals by 50 times, order
volume goals by 10 times, and number of customers by 5 times. The
e-store is fully operational and offers the company's entire product line
(nearly 1,500 different products) with comprehensive product information,
supports sales that have exceeded $4 million/week, and serves
1,000,000 visitors/month. However, we believe that we've only just begun
to tap into the e-commerce opportunities that exist, and that further
technological enhancements over the coming years will enable the
company to fully maximize these possibilities.

Personal Quote
(This one says it all) First, let me start out that I have had nothing but
good luck with your online store. Every single time that I have ordered
something the order was 100% correct, there were no hassles (other than
normal internet difficulties beyond your control) with the ordering process
and I have felt very comfortable dealing with WOTC and my TSR
purchases online.

Please forward kind words to all
departments with regards to the online purchasing, the web site and
anyone else that I may have missed. This is very important that you try to
include everyone as I am very pleased with my experiences. I also
recommend sending this message as far up the chain-of-command as
you can. Everyone involved should be entitled to a day off WITH PAY and
that don't have to do with the holiday season.

You see, I do
email support all day long and I know how it feels sometimes when you
see nothing but negative replies and requests from customers and all
that stress during this time of year. If you are a manager, supervisor or the
president, please setup some sort of reward structure for everyone that
has helped me and other customers with their online purchases and the
web site in general.

I have dealt with many online purchasing,
both for work and for home. Every single one of the other services from
another company have either ended with me having to cancel the order,
triple-checking the delivery address and getting both phone and email
verification of such and, to tell the worst, to receive the product after
canceling it over two months prior.

Again, thank you for your
time and efforts from a fellow customer service/support rep. Jon S. San
Jose, CA
The major challenges were of an organizational nature. As the major
manufacturer in its industry, sales conflict with distributors and retailers
was of great concern. Adding to the challenge was that the company had
no existing operations or computer systems to leverage to sell directly to
consumers. While the e-commerce charter was supported by top
management, it was not publicly supported company wide. The idea was
ridiculed by management and peers for the blatant channel conflict it
appeared to create. Many of the company's retailers and distributors were
long-time friends of management and employees. As a result, the project
was forced to launch in stealth mode. The project was given an 8 week
timeframe to launch the entire site and operations and with very limited
financial, technical and operational resources. Yet, the project was
expected to be profitable. Due to the Director of E-Commerce's
persistence, determination, and focus on long-term benefit to the
company, the e-commerce effort successfully overcame these
challenges.