Specialty / Apparel and Accessories:
Stitching the details into winning formulas

Internet Retailer`s Best of the Web 2004

Bluefly.com
Coach.com
eBags.com
Gap.com
HotTopic.com
LandsEnd.com
LLBean.com
Timberland.com
TShirtKing.com
VictoriasSecret.com
WesternWarehouse.com
Zappos.com

To stand out on the web, specialty and apparel retailers must offer more than just strong brands. They must also pay attention to the details of what provides a winning formula through customer service and a pleasant shopping experience. One thing that the 12 online retailers in the Specialty/Apparel and Accessories section have in common is the attention they pay to the details that make their web sites excel in meeting the needs of their customers.

Serving a market niche well means finding those customer needs and meeting them with a high level of customer service—and innovation. Take Western Warehouse, which sells Western wear through 29 stores and WesternWarehouse.com. When it realized its web site lacked the services necessary to support its customers’ strong demand for cowboy boots, it reached into its own resources to devise solutions. Now it’s the only online boot-seller with a custom boot-configurator—built in-house as the first of its kind on the web. “The custom boot feature is a good example of how the Internet is well-suited to aggregate demand and offer a unique service to consumers over the world,” says Mary Brett Whitfield, senior vice president of consultants Retail Forward Inc.

No one does a better job of offering custom-fit products than Lands’ End, which pioneered the technique on Lands-End.com and continues to expand it. Lands’ End never ceases to improve the shopping experience, most recently with improved navigation and expansion of custom fit to women’s shirts.

At footwear retailer Zappos.com, surging sales are the result of its high level of customer service and broad selection. By saving costs where it can on in-house technology developments, including a system of providing shoppers with real-time inventory updates on each SKU, Zappos can afford to offer free shipping on all orders and returns and has more than doubled the value of the inventory to give customers wider choice of styles and sizes.

Bluefly.com, which sells designer apparel brands at discount prices, has attained the unusual in offering both function and fashion through a site design that emphasizes both a fashionable image and an easy way to shop for particular sizes. And intimate apparel fashion leader Victoria’s Secret has improved the function if its web site to push cross-selling of complete outfits and wardrobes in multiple apparel categories.

When it comes to testing new ways of merchandising, eBags.com is constantly innovating while monitoring and responding to customer preferences. Just as others in this section, like HotTopic.com and Timberland.com, go the extra mile to design a shopping experience around their knowledge of their customers’ interests.

Talk about tough niches to serve. Try setting up an online store selling nothing but high-fashion apparel brands at discounted prices—while they’re still in demand.

That’s the modus operandi for Bluefly Inc.’s Bluefly.com. Based in the heart of the fashion district in midtown Manhattan, Bluefly has managed to weather the boom-and-bust cycle of the dot-com era. And though still facing financial challenges in its sixth year, it has emerged as an Internet retailer that has pulled off an unusual feat in apparel e-retailing.

“They’ve learned how to combine fashion and site functionality on the same web site, which is a neat trick,” says Neil Stern, principal of retail consultants McMillan/Doolittle. “Web sites that focus on fashion usually don’t have good functionality.”

In September, Bluefly launched a redesigned site that emphasizes a consistent feeling of high fashion along with ease of shopping. “We created more desire around the product,” says CEO Ken Seiff. Key to that strategy is the use of images of models throughout the site to show off brands like Gucci, Prada and Hugo Boss on a white background, adding a sense of clean elegance, he adds.

In the past, Stern notes, a weakness of Bluefly was to entice shoppers with attractive fashions, only to disappoint in cases where a shopper couldn’t find her size. The redesign lets customers search by size, brand or category, or even by product popularity based on past sales.

And now there’s more to shop for. Bluefly recently added about $3 million in merchandise, increasing its number of styles by 25% to 12,000. And it hired former Spiegel Catalog Inc. CEO Melissa Payner-Gregor to fill the new position of president, a perch from which she’ll bring in more styles and price points to attract more customers, Seiff says. Payner-Gregor’s help comes after Bluefly has recognized an increase in the number of returns that it attributes to a general rise in prices.

But Seifff expects all the improvements at Bluefly to build on a recent trend of increasing order size from both new and repeat customers. For the first half of this year, average order size rose 6% to $172. “Cross-sells and up-sells are generating more business today than ever,” he says. “Our average order size now is more than two units per order.”

Still dealing with losses—it lost nearly $4 million net for the first six months of this year—Bluefly nonetheless keeps producing an upside. September sales rose 50% year-to-year, Seiff says, adding: “We’re anticipating it to be an even bigger and better holiday season.” m

Bluefly.com
Date
1998
Unique Visitors (monthly)
1,200,000
Sales (annual)
$33,000,000 (est.)
Site Design
in-house
CRM
Blue Martini/in-house
Affiliate Management
Be Free/in-house
Fulfillment
New Roads
Order Management
in-house
Web Analytics
in-house
Payment Processor
Paymentech
Content Management
in-house
E-Mail Management
in-house
Site Search
in-house
Search Engine Management
in-house
Content Delivery Network
Speedera

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Consumers willing to spend $250 or more on a purse want to know the details. Coach.com is providing them. Eighteen months ago, Coach Inc. began revamping its web site. Today, it features fast-loading zoom technology from RichFX Inc., multiple views of watches and easy-to-use color-switching technology. “We’re trying to give the customer as much information as he or she needs to make an informed decision,” says Ron Offir, director of Coach.com. “We’re a premium brand and so this technology allows us to showcase the incredible quality and craftsmanship of each product.”

Coach had experimented with product display, but not until the new RichFX zoom technology came out—based on Macromedia’s Flash—was Coach able to create the online shopping experience it sought. “We won’t launch technology unless we think it’s perfect,” Offir says. In the case of the RichFX technology, Offir says, “The image remains sharp throughout the zooming process. There’s no tunnel effect.”

Analysts give Coach.com’s re-launch high marks. “Coach does a good job of showing all their products at their web site,” says Heather Brilliant, stock analyst with investment research firm Morningstar Inc. “Shoppers can immediately see the highlights of every item and they can advance easily throughout the site and access other items.”

Coach has built a $600 million a year business on quality leather products. The direct-to-consumer business of Coach.com, a catalog, 156 company-owned stores and 76 factory outlets account for 59% of sales. The company doesn’t break out Internet sales versus other channels, but it strives to make all channels work together—and the web is a key component, Offir says. “We view the site as not only a sales channel, but primarily as a marketing channel,” he says. “The vast majority of customers there are pre-shopping the brand before they go to a store.”

Coach is extending zoom and color swapping to all products. It has introduced multiple product views on watches and plans to extend that to other products as well. “We will continue to explore how to show the product in new and exciting ways,” Offir says. For instance, it is now testing multiple angle photography with handbags.

But all the greatest display technology in the world won’t translate into sales unless consumers know about it and how to use it. And so Coach plans to promote zoom views to customers with a pop-up window and demo on the home page. “For us, it’s all about ease of navigation and product display,” Offir says. “If customers see it once, they start using it.” m

Coach.com
Date
2000
Unique Visitors (monthly)
460,000*
Site Design
in-house
CRM
NA
Fulfillment
in-house
Order Management
NA
Web Analytics
Vividence
Payment Processor
NA
Content Management
in-house
E-Mail Management
NA
*As reported by comScore Networks Inc.

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In their pre-web days, Jon Nordmark and his colleagues at Samsonite Corp. spent a lot of time identifying market needs, testing new offerings through surveys and consumer focus groups, then selecting the most promising new products and testing sales in the market.

Now they do all that in expedited time on the web through eBags.com—and in the process have created a reputation for eBags of being fearless testers of anything that might boost sales. For instance, it constantly undertakes design tests, presenting a page design to 10% of shoppers, then if it succeeds, gradually presenting the same design to all shoppers. “We test with live customers, not just with usability studies, so results are real and can be extrapolated to a larger audience,” says Nordmark, co-founder and CEO.

Nordmark realizes that finding the right formula for satisfying customers’ demands is key to survival. “We’re not just guessing at market demand,” he says. “We’re trying to scientifically figure out how to better serve consumers.”

The formula has worked well, as eBags survived the post-9/11 downturn in travel to continue strengthening its niche as the leading online retailer specializing in luggage and other carrying bags. Although eBags doesn’t report revenue, Nordmark says it was cash-flow positive for the 12 months ending with the third quarter and expects to be profitable next year. He also expects to sell close to 1 million bags next year, half of what eBags sold in the past four years combined.

“They have an online niche that they own,” says Neil Stern, principal of retail consultants McMillan/Doolittle. He attributes eBags’s growth to aggressive marketing combined with a well-run web site that presents innovative displays and promotions. And by continuously looking for new selling opportunities and testing them, eBags sets the stage for more growth, he adds.

For example, it monitors the effectiveness of its site navigation terms. “Our navigation uses a lot of industry terms like ‘carry-on with wheels,’ but a lot of consumers call that a rollaway,” Nordmark says. “So we’ll use consumer terms as navigation words, to provide a more relevant browsing experience.”

EBags doesn’t ignore, however, good, old-fashioned merchandising techniques. A recent campaign profiled customers with photos of how they use bags purchased from eBags. Nearly half of shoppers who view the profiles click to the page of a featured product; the profile of a venture capitalist has already resulted in a sellout of one of his featured bags, Nordmark says. “This is a way to make the profiled customer the hero, which makes our bags even more appealing,” he says. m

eBags.com
Date
1999
Unique Visitors (monthly)
1,500,000
Site Design
in-house
CRM
Kana Sofware

Affiliate Management
Be Free
Fulfillment
in-house
Order Management
in-house
Web Analytics
Omniture
Payment Processor
Paymentech
Content Management
in-house
E-Mail Management
Kana Software/in-house
Site Search
Endeca
Search Engine Management
in-house
Content Delivery Network
Akamai

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When most retailers think of cross-channel integration, they think of buy-on-the-web, return-to-the-store or posting their newspaper fliers online. When Gap Inc. thinks of cross-channel integration, it thinks of buy-on-the-web, return-to-the-store, but it also thinks of TV commercials, testing products on the web that it rolls into the store, web-enabled POS terminals—for starters. “We strike a strong partnership with the stores on the big ideas,” says Felix Carbullido, vice president and web general manager of Gap Online. “We continue to monitor the landscape in terms of offline and online integration.”

A new commercial featuring Madonna and Missy Elliott is a good example. Before the commercials aired this fall, Gap e-mailed a sneak peak to customers. Gap also set up a mini-site where customers could view the ad and behind-the-scenes footage of the filming of the ad. “Our customers like being in the know,” Carbullido says.

Customers at the mini-site could view the outfits the two wore, including cords with an M monogrammed on them. Gap.com has sold tens of thousands of monogrammed cords. “Having to deal with that much monogramming would have been hard to pull off in the stores,” Carbullido says.

The tight cross-channel relationship is evidence of Gap’s background, says Geoff Wissman, consultant with Retail Forward Inc. “Gap is unique in that it doesn’t have a history in catalog retailing,” he says. “That made it harder for them to make the transition to the web, but they moved up the learning curve quickly. They are graded on their ability to push sales. So there’s not a lot of branding at the site. It’s about the products.”

Among other cross-channel initiatives are three times as many sizes and lengths as are available in the stores, introduction and testing of products, such as a maternity line that is rolling out to the stores, and a policy that if a store customer wants a product the store doesn’t have, the sales associate can order it from the web site and have it delivered to the customer for free.

One of the reasons Gap.com is so tightly integrated into the entire retail operation is that Gap.com managers are part of marketing and merchandising strategy sessions from the start, Carbullido says.

But when Carbullido talks about how the web can integrate the different aspects of retailing, he’s not just talking about operations and marketing. As the Madonna/Missy Elliott commercial shows, he’s talking about much more. “We are using the web site to integrate the commerce side of retail with the theater side,” he says. Adds Wissman: “Gap is increasingly taking multi-channel retailing to the next level.”

Gap.com
Date
1997
Unique Visitors (monthly)
6,500,000
Site Design
in-house
CRM
In-house/E.piphany
Affiliate Management
NA
Fulfillment
NA
Order Management
NA
Web Analytics
Vividence/Fireclick
Payment Processor
NA
E-Mail Management
NA

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Merchandise managers at Hot Topic Inc.’s HotTopic.com hang out at a lot of rock concerts—and Hot Topic picks up the tab. A nice perk, for sure, but to Tricia Higgins, director of e-commerce, it’s another way to communicate with HotTopic’s customers to find out what they want to see on HotTopic.com. “You get a lot of information from observing and talking with concert goers,” she says.

Hot Topic’s specialty is merchandising apparel and accessories tied to rock concerts and musicians with band names like Good Charlotte, the Misfits and Deftones. The emphasis is on heavy metal music, though Hot Topic offers several genres, including punk and rock-a-billy, a mixture of country and rock-and-roll. Click on products associated with one genre on HotTopic.com, and every page of that genre carries the same color theme.

A staple is band-emblazoned T-shirts, but its product line extends to full apparel and accessories outfits for males and females aged 12 to 22. It also offers special items that commemorate bands: a Deftones wall clock, for instance, or a Good Charlotte wristband. And a new baby line of infant and toddler wear for the young parents among its customer base.

But the lineup of products is constantly changing to match the band of the hour and the latest musical events. “We’re very much based on music-influenced fashion,” says Higgins, a veteran retail manager formerly with Walt Disney Co., Williams-Sonoma Inc. and Cooking.com.

And who better to provide the scoop on the latest and hottest music than Hot Topic’s customers? In addition to concert attendance, HotTopic.com engages customers in multiple ways. It polls them for their interest in CDs and videos, for instance, and asks them which bands they’d like to see on a T-shirt. The site’s “Community” section lets visitors share ideas with others on their favorite bands and fashions, giving HotTopic an eyeful of new apparel trends and undiscovered bands. “HotTopic understands its customers as well as anyone out there,” says Duif Calvin, a retail analyst based in San Francisco.

It’s also upfront with its customers, Calvin adds, on things like a product’s potential for shrinkage and shipping times—crucial to someone ordering a shirt for a particular concert. It engages shoppers by letting them listen online to streamed audio tracks, and it works with Hot Topic’s nearly 500 stores to share coupons.

Its policy of communicating with customers includes using non-professional models intended to look more like customers than cookie-cutter movie stars. “We have customers of all different shapes, sizes and ethnicity, and we want to recognize that,” Higgins says.

HotTopic.com
Date
1998
Unique Visitors (monthly)
1,070,000*
Site Design
RGA
CRM
none
Affiliate Management
Commission Junction
Fulfillment
Ecometry
Order Management
Ecometry
Web Analytics
Urchin
Payment Processor
Paymentech
Content Management
in-house
E-Mail Management
in-house
Site Search
in-house
Search Engine Management
Overture
*As reported by comScore Networks Inc.

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Get shoppers to the site and make sure they have a great experience: LandsEnd.com’s winning formula is out there for any retailer to see and claim. But Lands’ End Inc. doesn’t worry about that—because it executes the strategy better than just about anyone else.

Between the launch of its site in 1999 and last year, when online sales were $435 million or 28% of revenue, Lands’ End, now a division of Sears, Roebuck and Co., has become the largest seller of apparel online. “One reason Lands’ End’s business has grown so dramatically is they’ve converted catalog shoppers to Internet shoppers,” says Forrester Research Inc. analyst Carrie Johnson. “Another is their innovation and its impact on sales.”

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While other web retailers were mired in building brand and infrastructure, cataloger Lands’ End already had them. It was able to focus on polishing its e-commerce initiative early on, developing a string of web firsts. The latest, Lands’ End Custom, may prove the most valuable. More than simply a “wow,” custom-tailored pants and shirts are delivering new customers—25% are first-timers—and more purchases from existing ones. After testing with custom khakis two years ago, Lands’ End is spreading the custom option across more categories. The newest, women’s custom shirts, will debut shortly.

While Lands’ End doesn’t seek to drive shoppers to one channel over another, Lands’ End Custom has done that because it’s only on the web. “We think the Internet is the best channel for custom product and personalized service,” says Sam Taylor, vice president of e-commerce. The numbers bear him out. At 40% of jeans and chinos sales online, Lands’ End Custom far exceeds initial projections of 5% to 10%.

While custom apparel may star, the site offers plenty more—90,000 SKUs, in fact, the entire inventory, which would require a 750-page catalog. That much choice in one well-organized place is just one reason customers keep returning, and Lands’ End continually challenges itself to give them more. Within the past few months alone, it reworked its navigation to deliver information such as product price earlier in the shopping process and enhanced its site search. And for the 40% of customers who use dial-up connections, it added functionality that makes page downloads three times faster.

As an innovator, LandsEnd.com continues to be its own best competition. “It’s one of the best experiences you can have online,” says Johnson. That’s one of the reasons Lands’ End is one of only two—Amazon being the other—online retailers that have made all five editions of Internet Retailer’s Best of the Web. m

LandsEnd.com
Date
1995
Unique Visitors (monthly)
1,728,000*
Site Design
in-house
CRM
in-house
Affiliate Management
LinkShare
Fulfillment
in-house
Order Management
in-house
Payment Processor
Paymentech
Content Management
Vigne

So old dogs don’t keep learning new tricks? Check out the web site of L.L. Bean. At age 91, the venerable Bean brand is ancient in Internet years, yet it’s got one of the slickest and most efficient web operations going. “The brand speaks to a certain lifestyle, and the site supports that, starting with the duck boot on the home page,” says The E-Tailing Group president Lauren Freedman.

Within the last year alone, it’s redesigned its home department and product pages to boost merchandising capacity and make it easier for customers to shop as, well as instituted a major site search upgrade. It’s added to an already high-functioning site the ability to buy multi-component outfits from one page, and to build an equipment list and buy all of it from one page, the ability to track orders online and more.

And if it didn’t invent those things, or it hasn’t strayed into latest online display technology, it’s because part of its winning formula is adhering to a principle in line with its practical Down East roots. “We’re never enamored with what we could do,” says e-commerce vice president Mary Lou Kelley. “You can do a lot of whiz-bang things on a site, but we always ask if they would actually add tangible value and help the customer.”

That question guides ongoing site enhancements as L.L. Bean weighs new features and reviews what’s already up. In a recent site redesign, for example, LLBean.com replaced JavaScript rollovers with simple click navigation. “The idea was that rollovers take a click out of the process, but most customers weren’t using them so they just added page weight and slowed response time. We asked, do they actually help customers, or should we trade them off for a page that loads 5% faster,” Kelley says.

In fact, L.L. Bean, which strives to offer a seamless shopping experience across all channels, makes no particular effort to drive customers from other channels to the web site unless there is a specific reason beyond the customer’s own preference. One such reason is information better presented online. The site plays to the unique strength of the channel by offering the complete assortment, easy product comparisons, and deep product information. L.L. Bean has developed well over 50 product guides on gear that are available only online. The catalog pages reference that, as well as remind shoppers that while only a few models of kayaks, for example, may be presented in its pages, the full assortment is online.

“The web complements our other channels, so we want customers to have the same experience across channels,” says Kelley. “Customer service is part of our brand and our heritage and we’ve carried that out to the web site as well.”

LLBean.com
Date
1995
Unique Visitors (monthly)
1,671,000*
Site Design
NA
CRM
NA
Affiliate Management
Performics
Fulfillment
NA
Order Management
NA
Web Analytics
Surfaid
Payment Processor
NA
E-Mail Management
DoubleClick
Search Engine Management
MoreVisibility
Content Delivery Network
Akamai
*As reported by comScore Networks Inc.

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The Timberland Co.’s goal with Timberland.com is straightforward: “We want to provide easy access to the breadth and depth of our product line and our brand,” says Tim Diaz, director of electronic commerce for the outdoor shoe, apparel and accessory manufacturer. “Most people know us for our footwear, but we’re also in apparel and accessories. We don’t want customers to have to fish around to find those products.”

Part of what makes that work is Timberland’s practice of using humans to create cross-sells on the web. While other sites also do not use technology for cross-selling, Timberland is unusual in that it looks for staff with Timberland store experience. “We start with the belief that cross-selling is not Internet specific,” Diaz says.

The site reflects that human touch, says Geoff Wissman, consultant with Retail Forward Inc. “This is a well thought-through site where you can quickly get to what you need,” he says. “That indicates they know their customers and how they shop. They obviously put a lot of effort into this site based on what they know from their stores.”

The site creates an experience beyond shopping. Prominent on the home page is a link to Timberlandserve.com, which lists volunteer opportunities across the country. In addition, the site includes detail about Timberland’s products, which, besides on the web, it sells at 75 Timberland stores as well as specialty and department stores. “We want to make sure people explore the products,” Diaz says. “People usually go to a manufacturer’s site to research information. We want to make that as easy as we can.”

“Easy” is the byword at Timberland.com, Wissman says. “This is a highly functional, easy to use, easy to shop site,” he says. “Everything is above the fold; you never have to scroll down. That makes it more likely that customers will read the information.” Wissman also gives high marks to organization. “They present products in numerous different ways,” he says. “Customers can shop by activity, product or category. That all goes back to shop-ability.”

In addition, Timberland makes great use of the web to project its brand, Wissman says. “They use the web to sell product they sell in the store; it’s not an outlet to push merchandise that doesn’t sell elsewhere,” he says. “That’s good from a brand point of view.”

Timberland was a relative late-comer to selling on the web, launching an e-commerce site in May 2001 after having a brochure site since 1999. “We missed a lot of those ‘gotta-haves,’ like spinning shoes and Flash intros,” Diaz says, “which is good because our site has always been all about the products.”

Timberland.com
Date
2001
Unique Visitors (monthly)
NA
Site Design
Fallon Interactive
CRM
NA
Affiliate Management
Be Free
Fulfillment
in-house
Order Management
Broadvision through Chelsea Interactive ASP
Web Analytics
Omniture
Payment Processor
Chase Merchant Services
E-Mail Management
none
Site Search
Verity through Chelsea Interactive ASP
Search Engine Management
Be Free

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Long before he transformed his offline licensed t-shirt wholesale business into an online retail store, TShirtKing.com president Bill Broadbent was hearing about the wonders of the web from his father. A mathematics professor involved in the Internet early on, the senior Broadbent would talk of the web’s “unlimited floor space.” But it wasn’t until Broadbent was looking for a way out of a business problem in the mid-1990s that the message sank in.

A $400,000 order from a previous department store buyer was returned by the new buyer; not the first time churn among the ranks of store buyers had created problems. “We had to find new buyers for the shirts, and I was frustrated with the whole wholesale-to-retail angle. Sometimes buyers would have time to see only about a third of our designs. So I logged on and started building the site. It took a month and the first day we were up, we had an order,” Broadbent says. By 1998, Broadbent’s wholesale business had changed into the retail-only TShirt-King.com.

Broadbent has leveraged the web’s unique reach to capitalize on his company’s strength: a knowledge of licensing developed over 25 years of selling licensed t-shirts starting with the likes of Arlo Guthrie and The Band. “Licensing is a difficult world if you don’t know anything about it,” says Broadbent. “And bands are still the toughest.”

Today, TShirtKing.com books millions in revenue annually and pulls in as many as 1 million visitors a month from 30 countries. Not only does the web sales model allow it to display each of its 2,000 licensed designs, but it can re-merchandise and change the display instantly as needed.

Broadbent says next year TShirt.King.com will mail its first catalog to part of its house list. Given the rising cost of pay-per-click advertising, a postcard mailing, brochure or even the small catalog of best-sellers that’s planned is starting to look like a more cost-effective way to advertise the products and the web site, Broadbent says. “It will give people something to carry to school or work. We’ll use the catalog as much to advertise the site as for sales,” he adds.

In line with his father’s earlier vision, Broadbent is finding the web the perfect way to sell his product. “Merchandising in a store was always tough to handle. The product might just go on a rack where people don’t see it,” he says. “This way, it’s all up to us. For the price of one good space in a decent mall, we can reach just about everybody in the country.”

TShirtKing.com
Date
1998
Unique Visitors (monthly)
289,000*
Sales (annual)
$1-$10,000,000
Site Design
in-house
CRM
in-house
Affiliate Management
Commission Junction
Fulfillment
in-house
Order Management
Mail Order Management
Web Analytics
Urchin
Payment Processor
Authorize.net

Content Management
in-house
E-Mail Management
in-house
Site Search
in-house
Search Engine Management
in-house
*As reported by comScore Networks Inc.

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Victoria’s Secret does a lot of things well, from presenting fashion-forward lingerie to creating destination stores both offline and online. But what it’s learning to do better is leverage its branded image to make merchandising more effective at producing sales on VictoriasSecret.com.

“We’re using our brand to bring visual cues as navigation images on product landing pages, because that creates a visual shopping experience while reinforcing our brand at the same time,” says Ken Weil, who runs the web site as vice president of new media at Victoria’s Secret, a unit of Limited Brands Inc.

VictoriasSecret.com does an exceptional job of leveraging its images while maintaining fast page downloads for a positive experience, says Rob Gallo, consultant with Retail Forward Inc. “Victoria’s Secret’s images are not only functional, to give shoppers a feel for how well the products look, but the site’s use of models reinforces the brand as fashion-forward,” he says.

When a shopper lands on a product page, she’s greeted with several images of models showcasing Victoria’s Secret apparel in its various forms. Not only do the images entice more sales, but they’ve become a valuable tool in promoting sales of coordinated sets, Weil says.

VictoriasSecret.com, unlike its store counterparts that focus primarily on lingerie, offers several apparel categories including sweaters, casual clothes, party dresses and sleepwear. Since reworking its merchandising in recent months to promote more outfit and wardrobe sales, items merchandised in sets are selling 10-30% more than when merchandised separately, Weil says. “We realized that women often like to shop for outfits,” he says.

In its sleepwear section, for example, VictoriasSecret.com displays a coordinated set of pajamas, a robe and slippers. The shopper can click on one or more of the items topurchase what she wants in a single “add to shopping cart” step. A navigation bar on the same page lets shoppers look for other items in sleepwear and other categories.

The site is also promoting sales of wardrobes for multiple apparel categories. In its “clothing and trends” section, for instance, the first page emphasizes an image of a model showcasing the VictoriasSecret.com sweater line, but the page also features several smaller images designed to draw shoppers into complementary sections offering coordinated outfits. Clicking on an image of a model in a cocktail dress takes a shopper to a “holiday style” section that displays several coordinated outfits on a single page. “Adding wardrobe areas will be a big theme for us moving forward,” Weil says. m

VictoriasSecret.com
Date
1998
Unique Visitors (monthly)
3,173,000*
Sales (annual)
$300,000,000 (est.)
Site Design
in-house
CRM
in-house
Affiliate Management
in-house
Fulfillment
in-house
Order Management
in-house
Web Analytics
Coremetrics/in-house/Fireclick
Payment Processor
in-house
Content Management
in-house
E-Mail Management
Digital Impact/in-house
Site Search
in-house
Search Engine Management
in-house
Content Delivery Network
Akamai
*As reported by comScore Networks Inc.

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One of the benefits of selling online is the ability to use the web to zero in on what customers want. Like custom cowboy boots. Or like lay-away plans. Western Warehouse, which operates 29 stores in four states as well as WesternWarehouse.com, knew its customers liked custom cowboy boots and that as a relatively low income group, many wanted to time the payments of boots that sometimes were out of their budgets. Trouble was, the technology to serve those customers didn’t exist.

And so Western Warehouse looked inside to its IT staff, which agreed to put up a custom boot function, then found out there was no such technology available. 45 days and a crash course in how boots are built resulted in a custom boot configurator going live at WesternWarehouse.com just over a year ago. The site hosts the only interactive custom boot builder on the web; other boot sellers ask customers to fill out an e-mail form with their foot measurements and style desires. “The custom boot feature is a good example of how the Internet is well suited to aggregate demand and offer a unique service to consumers all over the world,” says Mary Brett Whitfield, senior vice president of consultants Retail Forward Inc. Western Warehouse does, in fact, have a Japanese language site.

Western Warehouse’s new lay-away plan—which went live in May—was also an in-house effort. Participation in the layaway plan requires a $250 minimum purchase and a 25% deposit. Customers can choose up to six installments in up to three months and pay by check or automatic charge to a credit card. Western Warehouse is hoping to increase sales by providing another payment option to a customer base whose average annual income is $25,000-$30,000, says Rick Shankles, Internet applications manager. “Many of our core customers don’t have credit cards, so it’s very helpful to them to be able to do this online or over the phone,” he says.

Providing lay-away is a smart move, Whitfield says. “For many of the customers, boots are a big part of their lives and discretionary income is limited,” she says. “Lay-away is a lost service with the wide availability of credit cards, but it makes sense in this case.”

WesternWarehouse.com now is extending its reach. It has signed on with online shopping destinations, including Yahoo Shopping, BizRate.com, Shopping.com, Pricegrabber.com, Froogle and others. It’s also put up a store in the Amazon.com apparel section. And the chain recently installed web-enabled kiosks in all stores, so—why else?—shoppers can place custom orders.

WesternWarehouse.com
Date
1999
Unique Visitors (monthly)
NA
Site Design
in-house
CRM
in-house/Sale Point
Affiliate Management
Be Free
Fulfillment
in-house
Order Management
in-house
Web Analytics
Site Brand
Payment Processor
Bank of America
Content Management
in-house/Site Brand
E-Mail Management
CoolerEmail
Site Search
Foresite Design
Search Engine Management
Traffic Leader
Content Delivery Network
Site Brand

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Since joining footwear retailer Zappos.com as an investor and CEO in 1999, Tony Hsieh has set a goal of reaching $1 billion in sales by 2010.

That goal may sound lofty, but consider the performance of Zappos so far: Sales have surged each year, climbing from $1.6 million in 2000 to $8.6 million in 2001, then to $32 million in 2002. Hsieh says this year he’s on pace to hit $70 million and realize his first year of net profits. Next year, he figures to reach $125 million.

So Hsieh speaks matter-of-factly about hitting 2010 sales of $1 billion—and that’s only in footwear. “We chose the name Zappos because it doesn’t limit us to any one product category,” he says. Already Zappos is experimenting with sales of handbags designed to match footwear styles from brands like Kenneth Cole and Anne Klein, and it’s planning to roll out more handbags early next year. Longer term, it’s also looking at apparel and other lines. “We could expand to any category,” Hsieh says. “We don’t want people to think of us as a shoe company.”

Zappos is gearing up for growth with a focus on customer service while limiting expenditures on marketing and technology. Its in-house IT team, for example, developed a warehousing system with open-source software that individually codes each of the more than 350,000 pairs of footwear in Zappos’s inventory and provides shoppers real-time view of each SKU’s availability.

Saving on operating costs has enabled Zappos to invest in other areas to further improve customer service, Hsieh says. A year ago, Zappos kept about $5 million worth of inventory in its warehouse; now it keeps $13 million and plans to expand inventory further. “We’re adding brands, and within brands, more styles and sizes,” he says.

Jim Okamura, senior partner with retail consultants J.C. Williams Group, says Zappos’ broad product selection coupled with a high level of customer service could be a winner. “They’ve been able to deliver a big, broad selection with a high degree of customer service—and that’s unusual, because it’s usually one or the other,” he says.

Zappos offers free shipping on all orders and returns. But while it promises free delivery within four to five days, it upgrades most orders at no charge to second-day delivery. “That results in our customers being happier,” Hsieh says. “We absorb the extra cost of shipping as a marketing cost. But about 20% of our customers say they heard about us through word-of-mouth, so it’s worth it.”

Zappos.com
Date
1999
Unique Visitors (monthly)
2,000,000
Sales (annual)
$70,000,000
Site Design
in-house
CRM
in-house
Affiliate Management
Commission Junction/in-house
Fulfillment
in-house
Order Management
in-house
Web Analytics
in-house
Payment Processor
Authorize.net
Content Management
in-house
E-Mail Management
in-house
Site Search
in-house
Search Engine Management
in-house
Content Delivery Network
Akamai

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