The e-retailer reports a $126 million net loss, stemming from a $640 million year-over-year increase in spending in the quarter on technology and content ...
(Page 2 of 2)
Staples employs several other strategies specific to the online business to encourage new ideas, such as its Innovation Series, which brings in speakers from other companies to its headquarters to talk about how they approach innovation. Its Stretch Assignment, in addition, has employees shadow workers in different departments to get a sense for other teams' duties and to deepen their connection to all aspects of the business, Tilzer says.
The retail chain early this year underscored its commitment to fresh thinking when it announced plans to open an e-commerce research facility in Cambridge, Mass. "Staples' new E-Commerce Innovation Center will become the home to some of the world's best e-commerce talent, with the goal of rapidly bringing breakthrough new ideas to market in emerging online technologies like mobile commerce and social media," Tilzer said in announcing the new center in January. The facility is scheduled to open this month. That announcement follows the launch last year by Wal-Mart Stores Inc. of a Silicon Valley research center called @WalMartLabs focused on social and mobile commerce (see story on page 26.)
King Arthur Flour Co. Inc., which brought in around $15 million in web sales in 2010, doesn't have the resources of a Wal-Mart or Staples. But the baking ingredient manufacturer, which has been making flour since the late 1700's, has grown from five employees in 1990 to around 200 by embracing the Internet. In the last nine months, the e-commerce side of the business has launched a new web site that adapts to the device shoppers are using, conducted a trial of text-message marketing, live-streamed baking demonstrations from its e-commerce site, and printed QR, or quick-response, codes on its flour bags, directing supermarket shoppers to its web site for a $5 coupon.
Most of these new strategies came from employees who are excited to suggest new things because they not only feel they have a stake in the company's future—they actually do. It's an employee-owned company where stock options are a standard part of compensation. "It sometimes feels like a 220-year-old start-up," says director of online services Halley Silver. "We have been around a while, but we are always trying new things."
To keep the new ideas flowing, the web team gathers for an annual off-site brainstorming meeting, which will be held this year at a local library. "We try to make sure we are looking at what else is going on out there on the web," Silver says. "We have the never-ending list of projects that need to happen and the day-to-day stuff we do, but it's good to get out once in a while and think outside the box. We want to make sure we stay ahead of the curve and are always keeping things fresh."
Providing fresh underwear is the mission of undergarments e-retailer Freshpair.com. As for generating fresh ideas, the implementation of a system that makes it easier to test new ideas has proved to be the key to unlocking employee creativity.
Freshpair.com has been working with web site testing and targeted marketing firm Monetate for about three years and has run more than 500 tests, says Freshpair Inc. president Matthew Butlein. Monetate's technology allows the merchant to quickly and easily test site functions and navigation, or marketing campaigns. Freshpair gets test results fast, and that leads employees to throw out more new ideas, he says.
"If you can't get tests done quickly, it crushes the ability to innovate," Butlein says. "With the old testing software we were using, it would take us weeks to launch a test. Now it takes minutes."
The technology has become a centerpiece of the e-retailer's internal structure, too, as Freshpair.com takes care to ensure that employees in all departments, including customer service, marketing and buying, understand what the Monetate technology can do. This has opened the door for all employees to think about new ideas that the e-retailer can test, Butlein says.
One of the more successful employee suggestions was to place an expert advice tab on the top navigation bar, which previously only featured two tabs: Men and Women. The retailer's staffers previously had discussed putting front and center on the site the kind of information on sizing, trends or laundering tips that appears on product pages. "Someone had the idea one day that the most important real estate on our site was in our header," Butlein says. "These are our most clicked pages. So the employee said, 'Why not add an Expert Advice tab?'"
A Monetate test quickly showed the concept was a hit with shoppers. Conversion and average order value increased dramatically, Butlein says, though he would not provide details. And the e-retailer, as it does with all ideas that test successfully, acknowledged the employee publicly in departmental meetings. Freshpair also discloses to employees the revenue impact from new features it implements, which the e-retailer views as an important part of encouraging a forward-thinking atmosphere.
"We really want to empower them to come up with something," Butlein says. "Through the accessibility of making changes and empowering people to do that, we've been able to source excellent ideas that have had a profound impact to our business."
From public recognition to Ben Franklin Bobbleheads and doling out stock options and quarterly bonuses, web retailers are putting into place structures that encourage their employees to be intellectually curious and rewarding them for their efforts. They are out to instill in employees a sense of pride and ownership in their work. And sometimes, a mere "Thank you," or "Great job," can make all the difference in the world, Butlein says. "You'd be surprised by how much recognition means to people."