Retailers scurrying to get online

Sales: They are the focus of the retail business, and "e-tailing" is suddenly a way to improve them.

September 29, 1999|By Lorraine Mirabella | Lorraine Mirabella,SUN STAFF

PHILADELPHIA -- Retailers have stopped asking if they should be selling online. Now they're wondering how they can get there -- and how fast.

But it's no simple matter, say retailers, manufacturers and consultants at the National Retail Federation's inaugural Internet retailing conference, NRF.com.

Experts at the conference, under way this week in Philadelphia, agree that a traditional retailer has to be where the customers are -- online -- and that the best retail Web sites become an extension of the business that helps draw traffic to the stores.

"Anyone who isn't in this medium in some capacity will regret it," said Jerry Storch, president of credit and new business for Dayton Hudson Corp., which runs the Target discount chain. "It's not the Internet vs. the stores. It's Target the brand. If they want to do business with us on the Internet, we're there."

Target, for one, plans to leverage its $30 billion annual retail business by launching 10 new Web sites in time for the holiday shopping season, Storch said.

"We're not interested in robbing Peter to pay Paul," said Angela Kapp, vice president of special markets and new media for Estee Lauder Cos. Inc., responding to the contention that Internet sites -- especially those run by manufacturers to sell their products exclusively -- will take business from stores that carry the products.

Rather, she said, Estee Lauder hopes "to touch the customer more frequently than she would go to the store. That's a tremendous opportunity."

Other manufacturers attending the conference, which runs through today, said they're using Web sites primarily to beef up sales at stores.

Henry G. Greene, chief information officer of Duck Head Apparel Co. Inc. of Winder, Ga., said it is too soon to tell whether that will work. The maker of men's and boys' khakis and shirts launched a Web site just over a year ago in hopes of not only selling merchandise but also boosting the brand awareness and sales at department stores such as Sears, Roebuck and Co. and J. C. Penney Co. Inc.

Once thought of as just a passing fad, "e-tailing" as it has been dubbed, grabbed the attention of retailers and Wall Street after the 1998 holiday selling season, when consumers spent about $3 billion online. That's expected to double this season.

"No one anticipated the powerful response and the explosive growth of that channel in holiday sales," Tracy Mullin, president of the National Retail Federation, said in welcoming more than 4,000 conference-goers to the four-day event -- the first the NRF has presented solely on Internet retailing.

Though it seems now that every national chain and brand name has adopted the Internet as an additional sales channel, many have made mistakes that leave shoppers disappointed and vowing never to return, such as shipping orders late or to the wrong address, said Patricia Seybold, author of "Customers.com: How to Create a Profitable Business Strategy for the Internet and Beyond" and president and chief executive officer of the Patricia Seybold Group.

One of the biggest challenges faced by brick and mortar retailers as they make the transition to "click and mortar" is shipping to millions of individuals, she said.

"You want to make it easy for your customer to do business with you, whether online, on the phone or face to face," said Seybold.

After a disappointing holiday selling season online last year, Lids, a hat retailer, has dramatically improved its Internet shopping, said Seybold, who has worked with the retailer since early this year.

To simplify the online experience, Lids added a tape measure that can be printed out and used to determine hat size. Because many target customers are under 18 and have no credit, the retailer has instituted a Lids cash card that can be used online or at the mall. And shoppers who don't find their size, color or team logo in stock at the store can order online from the store.

Other retailers say they continue to improve their sites in anticipation of the holiday shopping season.

By October, Service Merchandise will have enhanced its images and descriptions, begun allowing customers to check in-stock availability and reserve an item for pickup at a nearby store and confirm orders and shipping via e-mail, said Ken Brame, senior vice president and chief information officer for the Nashville, Tenn.-based chain.

The Internet experience is still a relatively new one for many retailers as well as for the online start-ups that have no brick and mortar roots, said Michael K. Stefanakos, a business-development manager for Nexgenix, a New York-based technology consultant and exhibitor at the conference that works with both types of companies.

"They have similar problems and disadvantages," Stefanakos said. "Everyone is wrestling with the question of how to go online as a separate entity."

While an online start-up might have the electronic infrastructure in place, it has to work harder to get customers. An existing retailer, on the other hand, might have a customer database of millions but no idea how to realign a business model for the Internet.

That was the question of the moment Monday for Larry A. Duren, senior director of distribution and logistics for Clothestime, an Anaheim, Calif., retailer of women's apparel with 300 stores, including one in Silver Spring.

Because Clothestime is looking into selling online, Duren came to the conference to see how competitors handled the shipping portion, especially since that can cost more than the item itself. Duren said he found few retailers willing to discuss the costs of making the transition. But he remained convinced of one thing.

"Retailers are changing the way they're doing business," Duren said. "You better be on the Net to survive."

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