At BabyStyle.com, the retail chicken comes before the egg

Most multi-channel retailers trace their origins to stores or catalogs, with the web the late-comer. Estyle Inc. took exactly the reverse course with its BabyStyle.com brand, launching on the web in 1999, mailing catalogs in 2000 and opening a store in 2002. The strategy has paid off, Tom Park, president and CEO of eStyle, told the eTail conference in Palm Springs, CA, Wednesday.

“One of the great advantages in starting on the web and moving to stores is we know where our customers are,” Park told conference attendees. “This gives us great information and an intelligent way of locating our stores near our customers.”

Further, he added, the stores provide intelligence to merchandisers on selection and assortment. “In the store we can talk to customers and learn what kinds of merchandise they want,” he said. “It’s a wonderful learning tool for merchandising planning for the other businesses--the catalog and the web--because we can talk with our customers.”

BabyStyle, retailer of maternity wear and baby clothing and accessories, opened its first store in Manhattan Beach, CA, last year and plans to open as many as five stores this year. Meanwhile, its catalog recipients have grown from 40,000 recipients twice a year in 2000 to an estimated 5 million quarterly this year. But BabyStyle has no intentions of allowing its newer channels to outshine its web sales. “We’re off to the races with catalogs,” he said. “The books pay for themselves as an online acquisition vehicle for the e-commerce channel.”

Everything the company does in the store and in the catalog is aimed at driving shoppers to BabyStyle.com. “We use the catalog and the store to expand the brand’s reach, add new customers and get the customers in the catalog and the store to convert to the web because the web is the most efficient transaction vehicle there is,” Park said.

Not only is it the most efficient, but the web also creates larger orders, Park said. Catalog customers who buy on the web spend 20% more than those who call in their orders, he reported. Thus it pays off to offer catalog customers who place their orders on the web a 10% discount and free shipping, he said. Further, BabyStyle has kept its staffing under control: With catalog circulation skyrocketing in two years, the company has added only five phone reps to its initial 20. Park reported that 80% of catalog-originated transactions are completed on the web.

It also ties the store and web together with a web-based baby registry in the store. Expectant mothers can register in the store, and gift-givers can access the registry and buy the gifts online. It maximizes its store--only 2,200 square feet--by offering only selected high margin products. For instance, it carries five strollers in the store while offering 30 online. “Everything we do is deigned to maximize the effectiveness of the web site,” Park said.