November 30, 2004, 12:00 AM

Mass Merchants / Department Stores: Winning by leveraging more of what the web can do

(Page 2 of 5)

Like a huge snowball rolling through the retail industry, eBay.com Inc. continues to build the critical mass that sets it apart as a unique marketplace. EBay shows no signs of slowing down, even though its numbers are already impressive--41 million users last year driving $24 billion in gross merchandise sales, up 60% over the prior year, and more than $30 billion in GMS for the first three quarters of 2004.

A haven for hundreds of thousands of online stores, eBay is also becoming more recognized as a marketplace by major retail brands like Best Buy, which has found it a strong selling market for new, end-of-lifecycle computers. EBay is also emerging as a major force in automobile sales; eBay Motors has become the web`s most frequently visited car site with nearly 11 million monthly visitors.

And though eBay is not a direct retailer, but a selling platform for other merchants, it has emerged as a major brand in the retail industry. A study by Hitwise this fall found eBay to be the web`s most searched-for brand, beating out names like Wal-Mart and Amazon.

And now an entire new market for eBay is just beginning. Until now, its growth has been built on buyers and sellers in the online world. But with hundreds of independent third-party eBay drop-off stores cropping up around the U.S., eBay is entering the multi-channel world without even trying. It stands to pick up a new source of sellers who prefer to drop off goods to be sold at a physical location rather than deal with the complexities of selling online.

"The genius of eBay is that it has thousands of sellers working for it that it doesn`t have to pay," says Neil Stern, senior partner with retail consultants McMillan/Doolittle. "With the drop-off stores, it will have hundreds of brick-and-mortar sites without having to pay rent."

Over the past 100 years, he adds, the evolution of retail has been about how to bring the costs out of selling and be more efficient in distribution. "Discount stores were more efficient than department stores, and wholesale clubs were more efficient than discount stores," Stern says. "It seemed impossible to get below the operating costs of Wal-Mart or Costco. Then eBay comes along and says, `I don`t have to do any of that.`"

eBay Inc.
2145 Hamilton Ave. San Jose, CA 95125
Date Launched
1995
Unique visitors (monthly)
60,327,000*
Annual Web-Based Sales
$34,000,000,000**
Vendor Relationships
Site Design
In-house
Site Search
In-house
Content Management
Idiom
Payment Processor
PayPal, others

Fulfillment
NA
Affiliate Marketing Management
Commission Junction
Search Engine Management
In-house
E-Mail Marketing
Kana
Web Analytics
Omniture

Content Delivery Network
Akamai Technologies
*comScore Networks report, October 2004
**Internet Retailer est.of gross merchandise sales for 2004


Macys.com
No niche marketing here

In many instances, the easiest way for a retailer to succeed online is to find its niche and pursue it. But that`s what makes Macys.com special. It has been successful while appealing to a broad range of customers with an enormous array of products.

Macy`s doesn`t even try to be a niche player. Like its brick-and-mortar store customers, Macy`s online shoppers span a range of incomes as the site attempts to appeal to clearance shoppers as well as fashion-conscious shoppers.

Furthermore, Macy`s is selling a broad range of products from ready-to-wear and cosmetics to toys and area rugs. "We`ve doubled the number of items on the site this year over last year and we think our site is reflective of the best Macy`s has to offer," says Kent Anderson, CEO of Macys.com.

In growing its assortment, Macy`s has greatly expanded the choices in giftware and men`s and women`s wear, with significant expansions in categories like plus-size clothing. It added several categories this year, including area rugs, and is considering furniture and mattresses for 2005 or 2006.

But while some retailers focus on creating an image for their online sites, Macy`s concentrates on selling goods. "This is a site that is heavy into promotion and uses a lot of merchandising tools to get consumers to buy," says Lauren Freedman, president of The E-Tailing Group Inc. "It does a nice job with its bridal registry which is an important part of its business and its site search function has been designed to really get customers to the items they are likely to buy."

But with so much attention on direct selling, Macys.com isn`t all business. "We like to let customers have fun at our site. We have a web page where customers can watch our TV commercials," Anderson says.

Additionally, the site offers My Macy`s, which allows consumers to get personalized information about special events and sales at stores near them.

To get customers to its site, Macy`s relies not only on search engines, but also on a successful affiliate program. For example, it works with diet web sites to link customers to Macy`s plus-size clothing. It is also working with churches and schools that refer families to Macys.com, where the organizations get commissions on purchases.

Macys.com/Federated Department Stores Inc.
170 O`Farrell St. San Francisco, CA 94102
Date Launched
November 1998
Unique visitors (monthly)
7,000,000
Annual Web-Based Sales
$100,000,000+**
Vendor Relationships
Site Design
In-house
E-Commerce Platform
IBM Websphere
Web Hosting
NA
Site Search
Mercado Software

Content Management
In-house
Order Management
In-house
Payment Processor
Fifth Third
Fulfillment
In-house
Affiliate Marketing Management
LinkShare

Search Engine Management
In-house
E-Mail Marketing
YesMail
CRM
In-house
Web Analytics
Datanautics
Content Delivery Network
Akamai Technologies
Rich Media
Scene7

**Internet Retailer Top 300 Guide est., 2003


OfficeDepot.com
Consistently good
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