Poundland launches e-commerce Christmas push with Rackspace managed support

Discount retailer Poundland has enlisted the help of managed cloud provider Rackspace to ensure its first foray into e-commerce remains up and running during the busy Christmas shopping period.

The company, which operates more than 620 retail outlets across the UK and Ireland, rolled out a new e-commerce website in September this year to provide its customers with another way to purchase the low-cost goods it stocks.

Poundland also operates a number of similar retail outlets across Europe under the Dealz brand.

Paul McDermott, head of e-commerce at Poundland, said the company had been plotting a move into online retail for several years, but the time had not been right.

“I joined the business in January 2012 and Poundland had been looking at e-commerce for a number of years before that, but the business had often decided it wasn’t quite the right time to do it, largely based on other priorities that were going on elsewhere in the business,” he told Computer Weekly.

But that is not to say McDermott has spent the past few years twiddling his thumbs while waiting for Poundland to take the plunge into e-commerce.

“There are a few different aspects to my role,” he said. “One was to look at a viable e-commerce proposition and how to add some structure and change the way we were communicating with customers online.  

“I also looked after the non-transactional website and things like the email programme, social media and getting ourselves organised in that area, as well as e-commerce.”

The non-transactional website McDermott mentioned was designed to give visitors access to information about new product lines and store openings.

“Our previous website was built and managed and entirely looked after by an agency we worked with before Ampersand, the commerce agency we started working with in 2012,” he said. “It was a bespoke platform, unique to the first agency, but then we started working with Ampersand which hosts many of its clients’ sites with Rackspace.”

After a period of technical and commercial evaluation – Poundland decided to use the cloud firm’s Dedicated Server Solution to stand up its e-commerce operations.

The non-transactional site has given the firm some insight into when its website can expect to see peaks in interest for its products online as the Christmas rush progresses, said McDermott.

However, this data is unlikely to be sufficient for Poundland to base decisions on the best time to scale up its website resources to ensure it can cope as Christmas approaches.

It therefore decided to go down the managed cloud route with Rackspace, which will be on hand to ensure its website has enough capacity to cope as the number of site visitors rises in the run-up to Christmas Day.

“We were not naive about the fact that we were doing this for the first time,” he said. “A lot of retailers are doing relaunches, so we were quite keen to mitigate our risks and reduce our chances of things going wrong by using partners that are already pretty good at doing this.

“Also, we didn’t want any additional security or PCI headaches, so it was a very quick decision for us that hosting would be outsourced.”

The new e-commerce website has fared pretty well since its launch during the final quarter of the year, said McDermott.

“We are quite pleased with the initial trading, and we anticipated some traffic spikes – including a significant spike around launch – which happened. We traditionally get a spike of traffic around Halloween, but what we weren’t sure was about Black Friday,” he added.

“We did a Black Friday event for multi-price products, which are items costing more than £1, and didn’t know how big that would be. We had a pretty big spike in traffic around that, and – touch wood – we’ve not had any issues of any note at all on the infrastructure and hosting side. It’s been very smooth.”

Although it is still early days for the venture, Poundland has already pinpointed a couple of differences in how its customers behave and spend money in-store and online, said McDermott.

In particular, the average transaction value for a store visitor is £4-5, but for online shoppers that figure is significantly higher, and so too is the amount of time they spend considering their purchases, he said.

While McDermott is quick to stress that Poundland’s move into e-commerce is still very much in its infancy, the company has already expanded the range of Rackspace services it calls on to deliver it.

“We’re enjoying having just the ease of everything being hosted and looked after by Rackspace, and we’ve already added to the initial infrastructure we’ve put in place,” he said. 

“So we’ve added a CDN [content delivery network] to the infrastructure, but we’re also in the throes of adding the Dealz Spain website into the Rackspace environment. So we’re making more and better use of the environment, as new projects and needs come along.”

Also, the company is already drawing up plans to expand its online retail activities to include a ‘click and collect’ option in the new year, and incorporate the operations of rival value retail chain 99p Stores, which Poundland acquired in February 2015.

“At some point, I’m fairly certain we’ll start to get more involved with what that might mean online and on our websites, although it’s still early days,” he added.