New Zealand Dairy believes the internet is the ideal channel for catering to its remote customers on farms around New Zealand.
RD1.com supplies farming goods such as fuel, fertiliser, gumboots and seeds to the farming community. Set up on a pilot basis with 300 farms, the trial ends in late November. It will then be extended to everyone in the dairy group who has a computer – about 3000 farms.
“And we go out to the wide, wide world early 2001,” says RD1.com chief executive Neal Murphy.
He says the site is not a new business – merely a new channel for existing farm supply business, Anchormart (owned by New Zealand Dairy shareholders).
New Zealand Dairy has owned a farm supply business for 80 years, operating through 25 stores in the North Island, with one store in Southland and another one being built in Canterbury.
Because the customers are in remote locations, it seemed “intuitively correct” to provide a choice of channels says Murphy. The site allows the company to broaden its geographic spread of customers. He says the call centre and internet channels were added at the same time to provide a genuine choice for customers.
And, RD1 lets the company to expand the range of goods and services to customers.
“The net’s scaleable so you can put a product range out in front of your customers which is wider than that which you can hold in your average store. And you can also scale it to provide services which are more difficult to sale through a conventional retail environment such as insurance, travel and sharebroking and what have you.”
"Empowerment for the customer" is another goal of the site, with a wide range of science and benchmarking tools available in partnership with Meat New Zealand and AgResearch.
Murphy says that having an existing bricks and mortar identity has been vital. “I think that having a solid base of business, established vendor relationships, an established customer base and a revenue stream to help fund these investments is more than helpful – it’s been an essential part of the mix.”
He says that while some recent research indicated that only 6% of farm businesses had bought anything over the internet, New Zealand Dairy did its own research via focus groups and telephone surveys with AC Neilsen. It discovered that while it was true few had bought items online, that was because there was no site that met their needs.
“The research said to us that almost 60% of the farming families in New Zealand would use an agricultural site if it was set up to meet their needs ... If you’re living in a farm 20 miles out of Gore then buying a CD or a book is one thing, but buying your fertiliser or fuel needs actually meets a practical need. If a farmer values his time and the petrol in his tank then the convenience of buying through the net is huge.”
The feedback from the trial has been positive. NZ Dairy telephoned farms in order to get participants for the trial.
“The interesting thing was that the first 90 that we rang all agreed to participate in the trial. It wasn’t until we hit 91 that they said ‘no thank you’. I think that tells you that our customer base is interested in this technology.”
There have been a number of lessons learned, but Murphy says that running a trial has helped. “The whole of the team here is learning new things everyday. To have gone out there to the wide world without a trial is too hard to even think about ...
“Maybe other people get it right on day one but we didn’t. We had site stability issues, issues with navigation leading to blank pages, some external feeds not coming in – and we had a chance to tidy all that up. Otherwise people come on, get disappointed and go away and you don’t get them back.
“We can’t afford to do that. Each of our customers is vital to us. We’re not a B2C where you lose one customer and it doesn’t matter because there’s another 10 out there. There’s a finite number of New Zealand farms and we want all of them to think this is really a neat solution for them.”
The site was built by Oracle Consulting and New Zealand Dairy Group IS staff. General manager, IT, Ric Grocott says it was put together using an Oracle toolset (Oracle iStore version three) and Oracle Web DB – and a lot of raw HTML.
A back office suite written in-house by the NZ Dairy Group for the Anchormart business was also used in RD1’s creation. The site runs on Compaq Alpha equipment running 364 Unix, a combination of ES40s (application, database and web servers) and DS20 (firewalls).