December 26, 2000, 9:55 AM

Alice Peterson

(Page 2 of 3)

Customers will welcome well-known brands on the Internet, where things can sometimes get a bit confusing, she says. “We are going to focus on commerce categories where we can differentiate ourselves and where we can dominate. We have some proprietary brands like Kenmore and Craftsman that allow us to do that. That will be the basis of where we get started with our aggressive moves in 1999.”

Because consumers associate the Sears name with trust and the idea of “satisfaction guaranteed or your money back,” the company will have a major advantage on the Internet, Peterson says.

“Trust and security are on the minds of the Internet browser and the Internet shopper,” she says. “They want to know that the information that they leave behind is going to be used to solve their problems and not used to exploit them. They want to know that their usage of credit cards is a safe activity. They want to know when they purchase something that the company will stand behind the product that it sells.”

Customer focus

The company’s presence on the Internet may even encourage some “newbies” to buy online, consultant Freedman says. “People trust Sears,” she says. “When someone is considering whether to make a purchase online, that could be the thing that pushes them over the top. They may say, `Well, what’s the worst that could happen? I could just return it to Sears.’”

The Sears credit card also will play an important role in capturing online shoppers, and the company is focused on the security issues of using the card online.

Another advantage Sears will leverage is its huge customer database, which houses information on almost 100 million households. Today the database tracks what customers purchase at Sears stores, as well as their life stage, and enables Sears to provide targeted merchandise offers and specialty catalogs to specific consumer segments. Already the online team is using it for consumer research.

Many Internet retailers also are using customer databases to “personalize” their Web sites. Personalization technologies enable sites to recognize visitors and tailor the content they see to the individual’s preferences or buying habits. Such one-to-one marketing is going to be essential on the Internet, Peterson says. Sears is looking for a new site server that will enable it to personalize its own Web site over the next two years.

“The vision is for a single view of the customer, so that whether she is getting an appliance repaired, making a payment on her Sears card, scheduling a service or shopping, she will have all of that in one place,” Peterson says. “We will understand what she has done with us and therefore will understand how to customize Web pages for her and customize the online experience.”

First forays

Sears learned about creating a “community” on the Internet from its first e-commerce ventures, which it set up for very specific types of customers. The company began selling Craftsman tools online in October 1997 to meet the needs of Craftsman customers, who seemed to love shopping on the Internet. More than 6 million people are members of the Sears Craftsman Club, and making the tools available online increased Sears relationship with them.

Sears launched its second e-commerce venture, wishbook.com, in November. The site makes thousands of toys from the company’s holiday Wish Book catalog available on the Internet.

Both ventures simply plugged very successful catalog operations into the Internet, Peterson says. Sears won’t disclose sales figures for the sites, but the efforts didn’t require much investment or development, Peterson says. “What we did was start to establish ourselves, start to create some community online,” she says. “We’ve learned a lot and now we will translate that into even better user experiences with what we come out with in 1999.”

Sears customers, Peterson says, are clamoring for more. Yet in addition to giving customers who come into the stores what they want online, Sears also wants to capture the online shoppers in general. “We are thinking big and very boldly,” Peterson says. “We are not taking our store and putting it online so much as thinking of ourselves as a pure virtual e-commerce player and then backing into where we can create value with the core strengths of the operation that we have.”

Great leader

Peterson is happy to be in the position to help bring Sears, one of the nation’s oldest retailers, further into the Internet community.

While she didn’t have any direct Internet commerce experience before moving into her new post, not many executives today do, Thompson says. “We thought about looking outside for someone, but this is such a fast-growing industry and space and channel that you are an expert if you have been in the industry for a year or two.”

In Peterson, Sears Online got “a great leader,” Thompson says. “Alice is an out-of-the-box thinker and a real go-getter. She had developed a strong reputation and external presence in her treasury role. Sears has been quite an innovator in everything from how we securitize our receivables to different ways we go after the debt and equity market.”

Much of that innovation has come from Peterson, Thompson says. “She knows how to deal with the leverage a company this size brings, and she knows how to think about and create shareholder value.”

Peterson proved she could think creatively and make tough decisions as part of the team that helped spin off Coldwell Banker Residential Services, Allstate Insurance Group and other parts of the Sears business in the early 1990s, Thompson says.

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