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No. 1 on CEOs’ minds at eTail show: Finding the funding
A panel of retail CEOs at eTail 2003 East were frank in identifying the biggest challenge they face: no money for new projects while pushing their employees for greater productivity and expecting sales growth.
No surprise here: The biggest challenge that a panel of CEOs at eTail 2003 East in August identified as facing today’s online retailers is no money for new projects. And they were surprisingly candid in what they’re asking their employees to do as a result. “We want to continue to grow our business 100% year over year and it’s hard to do that while maintaining employee morale and commitment,” said panelist Jon Nordmark, president, CEO and chairman of eBags Inc. “We are asking for that growth and telling people they aren’t going to get resources to do it.”
The issue is particularly vexing since many CEOs believe the technology exists to help them improve web sales, but they are having difficulty taking advantage of it. “The biggest challenge,” said Irene Pedraza, CEO of CheetahMail, “is how to make use of the tremendous amount of technology out there. The resources just aren’t there to implement all of it.”
The more than 600 attendees, exhibitors and speakers at eTail 2003 East in Boston all were keenly aware of the lack of money for investment in a channel that most agree is crucial to a retailer’s success. But those looking for a formula to calculate web-investment returns were disappointed. “There is no clear calculation to measure how your investment on the web is doing. There’s so much cross-channel integration there’s just not a perfect delineation,” Lands’ End CFO Don Hughes said during the CFO panel discussion. “Customer satisfaction is the key. The customer wants a multi-channel environment and that drives our investment online.”
At the least, said Christine Aguilera, CFO of SkyMall Inc., look at the web investment as part of a company’s total strategic direction. “You’ve got to get the organization to look at the big picture,” she said.
In spite of the cautious atmosphere for technology investing, attendees heard from retailers who are unwilling to scrimp. “We are spending more money on usability studies,” said Mark Vadon, CEO of Blue Nile Inc. “The greatest return on our investment is in research about what improves conversion.”
Spending in one area, though, especially research, sometimes results in spending in other areas. “We thought search was one of our site’s strengths. It turned out to be one of our weaknesses,” Vadon said. As a result, Blue Nile invested in improving its search function, which leads to higher sales.