PetSmart acquired Pet360 for $130 million in cash and up to $30 million more in future performance-based payments.
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As Lamps Plus already pays for software licenses and maintains an IT staff of 20 including eight full-time programmers for its web site, the kiosks leverage those resources in the stores at only a slight additional cost. The kiosks use a Dell computer and flat-screen monitor like those already in use elsewhere in the company. The store display group at Lamps Plus built and installed the kiosk enclosures at a cost of a few hundred dollars each. Adding to that the cost of the additional hardware, putting five to six kiosks in each 11,000- to 15,000-square-foot store cost less than $8,000 per store, says Swanson, who estimates the kiosks paid for themselves in incremental sales within a few months of installation.
For online customers, Lamps-Plus.com already has been built to load in and update coordinating items and add-ons for every product, accessible through a click on a button. Pushing that functionality out to the kiosks has helped increase such cross-sells and upsells in the stores, Swanson says. Trying to remember all the related items for each product is challenging even for top salespeople, but now, for each item a customer selects in the store, the associate accesses a list of related items through the kiosk.
Customers get another look at coordinating items when Lamps Plus sends them an e-mail thanking them for their purchase and a product warranty. They’ll also get an e-mail when there’s a sale or a new product related to their purchase. “We track online sales on those items and they are significant,” says Swanson. “If we assume this is just as effective in the brick-and-mortar world as it is online, it’s pretty effective.”
10% and rising
Online sales at Lamps Plus have doubled in the last year, aided by special orders of warehouse inventory accessed at kiosks, as well as cross-sells and upsells prompted at the kiosks, and they now represent 10% of sales. Swanson expects that percentage to increase when Lamps Plus makes the store kiosks fully transactional on all of its products, a capacity it’s now developing. That will allow store customers to place an Internet order on the web site from the kiosks, input their credit card information to purchase, and arrange for store pick-up or delivery.
Through the kiosks, that feature will bind the retailer’s online and offline operations together even more tightly. And Swanson says that’s improving results in both. “Our success in the online world is created by taking our success offline and interpreting it in a way that works online,” he says. “What we learn online we then bring back to the stores, so the stores improve, too. We keep tying what we do in the Internet world to the brick-and-mortar world.”