August 1, 2005, 12:00 AM

Internet Retailer 2005: Report from the Conference

(Page 7 of 10)

Tool King has kept operating costs to a minimum, relying on drop-shipping for much of its fulfillment, and has expanded into international sales without expending much on marketing, Cohen says.

Jeff Binder, CEO of beauty products retailer Saffron Rouge, which operates a single store and SaffronRouge.com, showed you don`t have to be big to be successfully multi-channel. He uses an e-commerce platform from NetSuite to track shoppers in each channel. "We can market to people who bought certain SKUs in a particular channel," he said.

The fashion-forward web
Dressing Up the Web: Soft Goods Get New Respect Online
Kent Anderson, president, Macys.com

Apparel will sell on the web--if Internet retailers market and merchandise clothing and accessories that cater to customers` changing lifestyles, Kent Anderson, president of Macys.com, told attendees at the Internet Retailer Conference.

Macys.com has increased its average order value to about $125 and the web store now attracts record visitors each year in part because Macy`s has implemented and executed a lifestyle-based apparel merchandising plan, Anderson said. "We sell in a way that corresponds with the way our shoppers see their lifestyles," he said.

Early in the Internet retailing experience many shoppers shunned buying clothes online because they couldn`t touch, feel or put on the merchandise. Customers also worried about ordering the wrong size and about the hassle of returning merchandise.

But Anderson said Macys.com has overcome those obstacles by developing a merchandising strategy of offering the right assortments of merchandise, improving the online shopping experience, using fashion education as a marketing tool and simplifying pricing.

Macys.com`s web designers and marketing managers also pay particular attention to using text and images that emphasize the latest colors and fashions--and to portraying shoppers in an elegant or appropriate environment that emphasizes their lifestyle. "We create a voice for the brand," Anderson said. "We take an educational approach that keeps shoppers aware of current trends and how they can create the latest `must have` looks."

Anderson added that detailed sizing charts are helping reduce returns in some categories by as much as 50%. At Macys.com customers can also shop for merchandise by size, brand and other criteria and purchase online, but return merchandise to stores. "Using multiple channels and paying attention to little things help," he said.

Revving up web sales
Why Detroit is Driving to the Web
Steve St. Andre, president and COO, FordDirect

Ford and Lincoln Mercury dealers who once saw the Internet as a threat now see it as an effective retailing channel. But auto dealers and manufacturers still must do a better job of identifying customers and their buying preferences online, Steve St. Andre, president and COO, FordDirect, told the Internet Retailer Conference.

When FordDirect was formed, many dealers saw the organization as a means for Ford to bypass the dealer and sell direct to the public. But today FordDirect has more than 3,900 dealers in the joint-venture marketing cooperative.

St. Andre said Ford considered a direct online sales channel but abandoned the concept because of the complexity of new car sales. In addition, he said, the wrong people were in charge of the site. "The original content databases came from engineering specifications," St. Andre said. Today, FordDirect, dealers and other original equipment manufacturers and third-party sites have done a good job in building web sites that give online shoppers copious amounts of information.

The industry is also shifting more marketing and advertising dollars from newspaper listings and circulars to digital programs. The web lowers the industry average of $577 to acquire a sales lead to about $100, he said.

While the web is becoming a more effective sales channel for Ford, the industry needs to do a better job of using it to understand customer behavior and acquisition, St. Andre said. A priority at FordDirect is aggregating sales and customer contact data from more than 19 sources, including Ford Internet sites and call centers, into one web data repository. "We will become smarter about how we collect and analyze lead generation information," St. Andre said.

Walking into new channels
Selling at the Online Malls
Scott Savitz, president and CEO, Shoebuy.com

Selling through online malls has helped Shoebuy.com Inc. realize average monthly growth of 14% since its launch in 2000, bringing sales last year to more than $45 million.

But success in online malls shouldn`t be taken for granted, Shoebuy founder and CEO Scott Savitz told the Internet Retailer Conference. "Are all online malls good for all people? No," he said.

Mall participation can attract new customers, but it requires careful review and management of how a retailer`s position and brand are presented and how well a mall can meet a retailer`s goals, he said.

An online mall should provide the capacity and flexibility to let a retailer scale up with content and transactions to accommodate growth and it should properly represent a retailer`s brand and organize its products in suitable categories. "We don`t want shoes next to ski pants," Savitz said.

A retailer should clarify terms such as whether the mall or the merchant has precedence for re-marketing to new customers and whether the merchant is expected to buy mall banner ads that may not suit its marketing plans, Savitz said.

But a retailer also needs to look inside its own operations to see how they`re being impacted by a mall presence, he said, posing the question "Are mall customers buying higher-margin products, or buying more or less?"

It`s also crucial for a retailer to have its own site offering a good shopping and fulfillment experience before hooking up with an online mall, where customers may be getting their first impression of the retailer`s product offerings and level of service, Savitz said. "If you haven`t perfected things at home, you`re not ready for an online mall," he said.

Waterford`s window to growth
Brand Name Manufacturers: New Opportunities on the Web
Jennifer Korch, director, Internet Marketing, Waterford Wedgwood U.S.A.

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