COVER: Best of the Web
A
year ago the trend was developing; today it’s in full flower: Traditional retailers
are taking over the web. Even the online merchants who envisioned lives as pure-play
e-retailers are taking on the multi-channel mantel: Amazon has signed chains
Toys R Us, Borders and Circuit City to marketing and merchandising agreements;
Drugstore.com has a deal with the Rite-Aid pharmacy chain.
And
if the online sellers are not traditional retailers, they’re at least becoming
multi-channel. UncommonGoods.com, for instance, mailed its first catalog in
December. The only real pure-plays to make Internet Retailer’s Top 25
Web Sites this year are Bluefly.com, which survives because it remains tightly
focused on its audience and its merchandise; eBay, which is transforming itself
and the retail industry by creating innovative accommodations for retail chains
and manufacturers; Overstock.com, which has carved out a unique online operation
that would be difficult to replicate in the real world; and Wine.com by eVineyard,
which represents the last of the general online wine merchants. By contrast,
last year’s Top 25 included 14 pure-plays.
Internet
Retailer’s Top 25 Best of the Web recognizes retailers who have adopted
strategies that demonstrate why the web will succeed as a retail distribution
channel. Success today means applying the tried and true, sound principles of
retailing to the web, while taking advantage of the unique powers that the web
offers.
Circuit City Stores Inc., for one, is a good example of the blending of the
channels. Customers at CircuitCity.com can order online and pick up their orders
within about 15 minutes at the store and return to the store as well. In the
store, clerks can order out-of-stock items from the web site via POS terminals
and have them delivered to the customer’s home or office. Meanwhile, Circuit
City management professes to be taking a conservative approach to its web strategy.
“Core to our strategy is that we are not looking to excel beyond the pack in
any one area,” says Dennis Bowman, senior vice president and CIO of Circuit
City. “We believe our strategy is appropriate for anyone who wants to make money
on the web.”
While Circuit City is using the web to serve customers and save sales, Hallmark
Cards Inc.’s Hallmark.com is attracting new customers. The web site hosts twice
the proportion of men shoppers as the stores, says John Sullivan, senior vice
president of Internet commerce for Hallmark. “We are reaching additional customers
through the web,” he says.
That is not to say that Hallmark is only focusing on new customers. Its entire
web strategy has been to link the stores and the web site and that is a strategy
that most of the other Top 25 are adopting as well. Sears, for instance, rolled
out its buy-on-the-web-pick-up-in-the-store policy in time for the holidays.
American Eagle and Williams-Sonoma, too, epitomize the multi-channel approach
with their well coordinated merchandising and marketing approaches across channels.
As in the past, criteria for inclusion in Internet Retailer’s Top 25
Web Sites are that the retail operation demonstrate how it has used the web
successfully to achieve a strategic goal and that it showcase best practices.
These sites are not just the biggest or the best known. They include smaller
multi-channel retailers such as Jos. A. Bank Clothiers Inc., which has proven
that consumers will buy custom-tailored suits on the web, and RitzCamera.com,
which replicates on the web the experience of shopping in a well-stocked photography
store. And they include such lesser known sites as VacuumBags.com, which serves
its extreme niche well, and Replacements.com, which has adapted the web to its
unique needs without spending a lot of money.
But while the Top 25 list changes from year to year reflecting online strategies
that come and go, one thing remains the same: Consumers like to shop on the
web. Best estimates as this issue was going to press in mid December were that
online b2c spending in 2001 would top $50 billion—more than double 2000’s figure—with
prospects of another 70% growth this year. Many retailers are finding that the
online market is worth going after—and thus it behooves them to learn best practices
from each other.
Profiles by Kurt Peters, Andrea
McKenna Findlay, Mary Wagner
(on
the following profiles traffic estimates denoted by * are from comScore Networks
Inc.)
