It’s back: E-retailers should be taking risks again, says eBags CEO
Launched in the dot-com boom, eBags.com survived the dot-com investment bomb that followed, in part by putting much web site innovation on hold at one point as it struggled to stay afloat. But in the last year or so, it’s again become open to innovation and risk, and its story is not untypical among pure-play survivors of that era, CEO Jon Nordmark will tell attendees at next week’s Shop.org Summit. Nordmark will participate in a panel, “Moving the Site Experience Beyond the Basics—Marrying Innovation and ROI.”
While larger companies struggled with the challenge of integrating multiple channels, “in the pure-play arena, no one was doing a lot because the profitability wasn’t there,” he says of that earlier time. “Companies like eBags retrenched. We cut back to the bare minimum we needed in order just to live,” he says. “But now the risk-taking can start up again.”
For example, eBags, No. 110 in Internet Retailer`s Top 300 Guide to online retailers, recently opened an office in the United Kingdom at a cost of a few hundred thousand dollars in the last six months alone, and it will start selling there in October. “We would never have done that two years ago, but we are comfortable doing it now,” Nordmark says.
Not just a function of improvements to the economy, Internet retailers taking more risks on innovation today are doing so partly because of the knowledge they’ve gained in how to operate online over the past several years, he says. “Start-ups like us had a lot of ideas, but then they went on the back burner. Now we’re focused on that again,” he says. “Before, if there wasn’t a 90% chance of success, we could not spend any resources. But now, if there’s a 40% chance and we think it could be a big win, we may give it a shot.”
The same thinking is spurring innovation again throughout the industry, he believes. In addition to more companies being profitable, “There’s a greater consumer acceptance of broadband and a greater capability of delivering digital media,” he adds. “Put that all together and it should make for an interesting next five years in e-retail.”
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