Thus it’s no surprise that the tech sites are among the retailing innovators on the web. BestBuy.com plans to become one of the first sites not operated by a computer manufacturer where a customer can configure a computer to specifications. IGo.com offers greatly detailed descriptions of its portable computer accessories and a constant update of its site as new products come out—as they do frequently in the high-tech world. “We have to have the web to compete in this market,” says Al Ingallerina, director of corporate marketing for iGo’s parent, Mobility Electronics Inc. “Our cost structure would increase significantly if it required a phone call to determine the compatibility of accessories for new products, given the velocity at which new products enter our market.”

And so the sites in this category employ such technology as live chat, which TechnoScout.com is trying to marry to personalized product recommendations, and the latest search and browse technology, which is an area where TowerRecords.com has been a leader.

But the high-tech approach to the web doesn’t come just when a customer is shopping on the Internet. RadioShack Corp., for instance, is equipping all its stores with customer accessible kiosks with broadband Internet access. The kiosks will serve multiple purposes; they will be shopping terminals for customers who can’t find what they want in the store and they’ll be information resources for sales personnel to answer customers’ questions. “We want customers to make a logical connection between RadioShack.com and the RadioShack store in their neighborhood,” says David Goyne, senior vice president and general manager of RadioShack.com. “When we’re not meeting them face-to-face, we’re trying to show them online how RadioShack can help manage their complicated, electronic world.”

Sharper Image’s insight into its customers can apply equally well to all the high-tech sites in this year’s Top 50. “Our customers’ expectations are very high,” says Tracy Wan, COO.

“We look at BestBuy.com as our biggest store,” says Barry Judge, vice president of marketing. That makes it the largest of more than 500 stores, counting all the brick-and-mortar varieties. And in a redesign set for a May launch, when it moves to a new UNIX computer platform, BestBuy.com will become the ultimate multi-channel partner to the consumer electronics chain’s physical locations, Judge says.

Best Buy, building on its reputation as a fun place to shop for all kinds of electronics products for the home, wants to bring that experience into the home as much as possible. Its new site will offer more personalized cross-merchandising and service by responding to shoppers’ click histories, and it will allow Best Buy to provide improved self-help and order tracking services. In addition, the new platform will enable it to display the same multi-product promotions on the web as it does in weekly newspaper fliers. Shoppers will see a complete synchronization of offline and online marketing, supporting multi-channel shopping, Judge says.

“We’re looking for the store to complement the web, and for the web to complement the store,” he says. “We want to provide a consistent multi-channel shopping experience, enabling customers to shop wherever they want.” The new web site platform will also enable the company to support for the first time all six of Best Buy’s corporate sister brands in the U.S. and Canada, including Future Shop, Magnolia Hi-Fi and Sam Goody, he adds.

Neil Stern, a principal with retail consultants McMillan/Doolitte in Chicago, says BestBuy.com’s biggest role over the past few years has been in driving traffic to the stores. But in offering free shipping on all orders, regardless of size, he adds, Best Buy has been indicating a potentially bigger role for the web.

Its web strategy has worked well so far, with more than 10 million unique monthly visits—and far more during the holidays. And it has proved that some products sell best on the web, such as digital cameras and personal video recorders. “We tend to sell more leading-edge products online,” Judge says.

To round out the multi-channel experience, Best Buy has also brought the web into the store. Its stores now offer web kiosks that allow shoppers to log onto BestBuy.com, a service that’s mostly used to order items that a store has run out of. “The free shipping makes it real,” Judge says.

Crutchfield
A new classic

Nearly 30 years ago, car enthusiast Bill Crutchfield was stumped when he tried to retrofit a classic Porsche 356 coupe with a new audio system; the tools and information simply weren’t available. That helped launch a $200 million car and home consumer electronics business that includes a catalog and a multi-award-winning web site that features a well-executed cross-channel strategy that sets the standard for making a complex electronics purchase easy.

“We see each channel as having its advantages and supporting one another, so the web has different roles. It’s a transactional site for those who want it, it drives telephone sales, and it’s an information source,” says Alan Rimm-Kaufman, vice president of marketing.

Crutchfield drops 35 million catalogs a year and web traffic spikes after mailings. The site features the 800 number on each page and even includes content about its phone agents. Crutchfield invests heavily in its in-house staff of 150 agents with three to four months of training, exams to pass, and ongoing instruction from Crutchfield and vendors. “Companies that go to the level of training we do are typically in the b2b space with higher tickets,” Rimm-Kaufman says.

More than a third of Crutchfield’s sales close on the web, which has plenty of tools to help visitors understand the merchandise regardless of how they place their order. There’s lots of behind-the-scenes support, such as its database of measurements of cars’ audio openings—gleaned from dealers and junkyards.

As many of the systems go to customers who will do their own installation, Crutchfield loads the site with easy-to-use features that provide detail that is less easily communicated via other channels. One example is fast-loading, high quality photos of multiple product views. “You can click to get a huge enlargement of the back panel of a home receiver or TV and see very quickly and graphically what the inputs and outputs are. You can’t provide those detailed images in print or on the phone,” Rimm-Kaufman says.

Crutchfield’s web/phone combination is so effective at communicating complex product information and closing the deal that some manufacturers of those products have handed over online sales and support. Sony passes shoppers interested in its mobile electronics from its own e-commerce site to a co-branded page on Crutchfield.com. “Selling mobile electronics is sufficiently complicated for do-it-yourself car installation that Sony felt it couldn’t provide the level of support it wanted customers to have. They found the way they could sell mobile equipment online was to partner with Crutchfield,” says Rimm-Kaufman.

Crutchfield.com

Date
March 1996
Unique Visitors
975,796/mo.*
Design By
in-house
Site Search
in-house
CRM
in-house
Affiliate Management
in-house
Fulfillment
in-house
Order Management
in-house
Returns Liquidation
in-house
Web Analytics
in-house
Payment Processor
First Data Corp.
Content Management
in-house
E-mail Management
in-house
*As reported by comScore Networks Inc.

Dell
This site gets it

Dell Computer Corp.’s is a direct-to-consumer model, but it succeeds on the web because that door swings both ways. Dell.com reflects what Dell gets from consumers—in ongoing usability studies, focus groups, site metrics, e-mail and more. “We’re rich in customer information,” says Sam Decker, senior manager of Dell’s consumer e-business. “It’s the rigor behind it all and applying it in what we do on the site that makes the site easy to use.”

About 50% of Dell’s total $33.7 billion sales are online, and the b2c area of the site gets about 2 million visitors per week. Dell’s value proposition online includes regular discounts and promotions, convenience, and a comfort level for shoppers with the selection process. Though the toll-free number is on every page of the site, Dell’s customers can completely configure a computer system online.

It’s a complex process, and consumers come to it with varying levels of experience and expectations. Dell.com accommodates the range of shoppers’ needs by putting key learnings from its customer data into tools on the site. Consumers can customize their systems from scratch, or they can use a tiered approach to help them get started. Dell.com features some popular configurations and components in off-the-shelf packages; shoppers can choose them and then customize further if they wish.

Dell puts its customer data to work in continuous small improvements that add to the online shopping experience. Here’s an example: Dell noticed 25% leakage off the page that offered financing options. “People weren’t getting what they needed from the page; it wasn’t easy to understand,” says Decker. “So we changed the page to feature our primary payment option of 0% financing, put in a calculator and made it easy to use. We saw leakage drop in half the day after the new page was launched.” Here’s another: Dell’s research showed that its one-step online configuration process needed to be further broken down so consumers could follow it better. “We found consumers thought of the process in two steps,” says Decker. “They wanted to configure their system first, and then see what other things they could add. We mapped the process according to what consumers wanted to see and that’s improved conversions.”

“Dell’s site is set up in a way that makes it very easy for a wide range of people to come to the site and get very quickly to the products that they are interested in pursuing,” says Retail Forward analyst Geoff Wissman. “There are multiple ways for the user to access the different models that are there; the site’s set up with the customer in mind.”

HPShopping
Zeroing in on the shopping experience

Executives at HPShopping.com monitoring customer activity noticed that customers in the midst of buying the iPAQ Pocket PC device were dropping off the site in alarming numbers after they had placed the product in their shopping carts, then went in search of other products.

Using an analytics program from Keylime Software Inc., HP’s e-commerce managers determined the problem was caused by customers who wanted iPAQ accessories. A link from a specific product recommendation, such as a modems was delivering customers to a general accessories page. Customers who were interested in the featured product became confused by the broad selection that had suddenly appeared on their screens and so left without sorting through the information.

Fixing that one step to deliver customers to a specific product increased conversion rates for iPAQ accessories by 83% and revenue by 25%. “We’re always looking for feedback from customers,” says Susan Boyce, chief marketing officer for HPShopping.com, which, post-merger, offers HP as well as Compaq products. “We send an invitation to every customer who has bought something to give us feedback.”

From fearing that selling to consumers online would alienate their retail and reseller distribution networks, most high-tech manufacturers have taken lessons from Dell Computer Corp. and Gateway Inc. and now enthusiastically embrace online selling to customers, and HP is no exception. “We started selling on the web because customers wanted to buy direct from us,” Boyce says. “And that defines our whole web site strategy—delivering the best customer experience.”

But HPShopping is not relying only on after-the-fact analytics to enhance the customer experience. It also is leveraging what it knows about customers to create personalized shopping sessions. For instance, using cookie-based information, it offers personalized recommendations when a customer returns to the site. It’s also created a newsletter with personalized recommendations based on past purchases. While she won’t reveal numbers, Boyce says newsletter circulation has grown substantially and is exceeding expectations.

For the coming year, HPShopping plans additional decision tools to help customers choose options and configure systems, enhanced navigation and more targeted product presentation. “Most of the customers who come to our site have unique requests and expectations,” Boyce says. “They look for particular things on the web. So we will be looking for ways to give them enhanced personalization and customization abilities.”

iGo.com
Taming the wireless accessories niche

To succeed in the retail accessories market for mobile devices like laptops and cellular phones, a retailer has to be equipped to channel product information that can change day by day. For a niche player like iGo.com, retail success would be impossible without the web as a sales and information channel.

“There are as many as 10 or 15 new mobile phones each week, and new computer notebooks every week,” says Al Ingallinera, director of corporate marketing for iGo’s parent company, Mobility Electronics Inc. “So it’s a necessity for consumers to have real-time access to information, 24/7.”

IGo.com’s annual sales of things like electronic plug adapters and wire extenders are small compared to sales at most other retailers in Internet Retailer’s Best of the Web—it posted $19 million in direct-to-consumer web and catalog sales last year—but it has leveraged the web to provide a rare service in a tough-to-serve market.

The central part of its service revolves around the configurators it offers for mobile devices, so that shoppers can search an updated list of compatible accessories that iGo sells. The challenge it faces is keeping up with the forever changing universe of mobile devices, requiring it to constantly update information regarding which accessories are compatible with each cell phone, laptop or hand-held.

Without an effective web site, it would be too costly to provide updated product information, Ingallinera says. “We have to have the web to compete in this market,” he adds. “Our cost structure would increase significantly if it required a phone call to determine the compatibility of accessories for new products, given the velocity at which new products enter our market.”

IGo.com has operated since 1999 as a source of mobile device accessories for a customer base that has grown to 350,000. In addition to service, it attracts customers with unique private-label items, such as the iGo Xtend Power Xtender for DVDs, marketed as the first DVD adapter approved for use on airlines as well as in cars.

With a tech-smart customer base, iGo.com gets credit for easy navigation and clear presentation. “The layout looks solid and has navigational ease,” says Jim Okamura, senior partner at retail consultants J. C. Williams Group in Chicago. “You quickly get the sense that this is the place for mobile accessories.”

Although 80% of iGo’s direct sales come in through the call center, most customers first research their purchase on iGo.com. “People go to iGo.com to find out what’s current because the catalog is out of date the minute it goes to printing,” Ingallinera says.

Radio Shack
The know-it-all friend on the web

Originally known as a place for techies and electronics hobbyists, RadioShack has emerged over the years as the ubiquitous neighborhood store that offers popular consumer products as well as electronics gear and ample advice from knowledgeable sales people.

There are now more than 7,200 RadioShack stores across the United States, the perfect base for a complementary web site, says David Goyne, senior vice president and general manager of RadioShack Corp.’s RadioShack.com, which debuted in 1999. “Our intention is to replicate the store experience online,” he says.

The company’s long-running slogan, “You’ve got questions, we’ve got answers,” plays right into its web strategy, he adds. RadioShack.com enables users to drill down quickly into an extensive well of information about products and how to install, repair and maintain them. And in a true multi-channel strategy, it’s used as an informational tool by in-store customers and store personnel as well.

“RadioShack really understands the importance of information, and that’s what you get on their web site,” says Neil Stern, partner with Chicago retail consultants McMillan/Doolittle. “Their site is highly integrated with their store system.”

RadioShack, which plans to have broadband Internet-access terminals for customer use in 90% of stores by year-end, is out to be the source for consumer electronics information as well as products. Its free-flowing information policy, for example, is intended to help consumers with questions about electronics even if their questions pertain to products bought at other retailers. “If you bought a cell phone at another retailer and need an accessory for it, we’ll help you find it,” Goyne says.

At the same time, RadioShack is adding to the ways shoppers can search online for products. For this holiday season, for instance, it expanded its online Gift Finder. “We intend to evolve RadioShack.com into an increasingly relevant experience every time a visitor comes to our site,” Goyne says.

One trendy service RadioShack does not offer online is in-store pick-up, but it provides information online about what’s available in local stores and it accepts returns at all locations.

“We want customers to make a logical connection between RadioShack.com and the RadioShack store in their neighborhood,” Goyne says. “And when we’re not meeting them face-to-face, we’re trying to show them online how RadioShack can help manage their complicated, electronic world.”

Sharper Image
Keeping a sharp eye on innovation

Sharper Image Corp. has the customer base that is perfect for web sales; high-tech, interested in the latest gadgets, its clientele is more likely to be online than the average consumer. And yet, Sharper Image has adopted a conscious policy to grow all channels. It’s opening more stores and mailing more catalogs than ever—even while its web sales are growing at nearly 50% a year.

“Sharper Image has really been a pioneer of multi-channel retailing,” says Neil Stern, a partner with retail consultants McMillan/Doolittle. “Sharper Image is about finding the latest, greatest stuff, and the web supports it.”

“When Internet commerce came into being around 1995, we saw it as a perfect complement to our existing multi-channel strategy,” says Tracy Wan, president. That strategy is comprised of four selling channels, all of them growing—stores, expanding to 127 this year from 120; a catalog whose circulation is increasing this year to 78 million from 70 million last year; TV infomercials; and SharperImage.com.

The web, the newest channel, is also the fastest growing. “Internet sales have been very robust, increasing 30-40% annually,” Wan says. Internet sales have grown to about $60 million, more than 10% of expected overall sales this year of $500 million.

The strength of SharperImage.com, she adds, helps the company in several ways. Most important, it has enabled Sharper Image to offer better service to its demanding customers, letting them shop in whatever channel they please. They can even order online from within a store, in case they see a must-have product but don’t want to wait in the checkout line. “We’re committed to high levels of customer service on the web, in-store and through the 800 number,” Wan says. “Our customer expectations are extremely high.”

And for a company that is known for the uncommonly bold, the web also helps it to fill out a product line that for practical reasons it doesn’t roll out into every store, such as the full arcade-size Austin Powers Pinball machine. It takes up too much space for most stores, but its image as an unusual and entertaining item is still important to the complete picture of Sharper Image, Wan says.

To overcome the challenges of retailing of the past year, she asserts, it’s important to offer a broad range of products that shoppers find relevant, intriguing and innovative—and that requires effective merchandising in all channels. On the web, of course, it also requires site performance, which Sharper Image is improving through a search mechanism that drills further down into product selections. “We pay attention to what customers need,” Wan says.

TechnoScout
Putting pizzazz behind technology

TechnoScout.com is on a dual mission: to teach people about new technology that they can use in their everyday lives and to use technology in a way that encourages shoppers to buy high-tech products from TechnoScout.com. “Our merchandising strategy is to bring the latest technology that helps solve everyday problems,” says Joel Skretvedt, director of Internet operations for the unit of TechnoBrands Inc., which sells via web site, catalog and call center.

TechnoScout presents that technology in an informative yet entertaining way. Its recently redesigned home page features a top-center article on a product of broad appeal. A recent article, for example, featured the high-tech characteristics of a “smart bed” visco-elastic foam sleeping surface developed by NASA.

Its level of service and breadth of useful, state-of-the-art products wins it applause. “Techno-Scout is easy to maneuver, it’s easy to find products and you get a quick response,” says Kathryn Cullen, analyst with Kurt Salmon Associates. “They offer interesting products, and you can get more information on products they are investigating.”

TechnoScout practices what it preaches when it comes to technology; it’s an innovator in using live chat—particularly notable on a site with sales of only $10 million, 25% of TechnoBrands total sales. For instance, while reading about the bed topper, a shopper is treated to a moving image of Santa and his reindeer toting a Happy Holidays discount certificate. Clicking it brings the shopper into a live chat session with a customer service rep, who will ask what product the shopper is interested in, offer a price discount, and ask if he needs any other information. TechnoScout has a staff of 16 live chat reps.

TechnoScout continues to work on ways to leverage technology to increase the online business. It’s still striving, for example, for the best way to use live chat to support its merchandising efforts. Its site captures customer shopping behavior, so customer service reps can be alerted to a shopper’s interests as expressed in previous visits. But figuring out how and when to present merchandising promotions in the most effective way will take time, Skretvedt says. “If I know you have viewed a product and added it to your shopping cart, but have never purchased it, then to close that sale I need to figure out the best time to give you a special offer, how to show you that offer and how many times,” he says.

TechnoScout appears to be in good position to figure out those parameters. Meantime, it has plenty of subjects to study. TechnoScout averages over 1 million unique visitors each month. “And more than 20% of them return within 30 days,” Skretvedt says.

Tower Records
Tower of web power

TowerRecords.com has never shied away from new technology. It jumped on the web early, when it feared the online CD sellers. It was one of the earliest sites to adopt analytics to monitor customers’ shopping experiences. And it was a test site for the search-and-browse technology of start-up Endeca Technologies Inc. So its product recommendation engine is probably automated, right?

No, says Mark Bressler, managing director of TowerRecords.com. “Our recommendations are based on editorial input,” he says. “They come from people who work in the stores or the call center or who are buyers.”

That touch makes a big difference in making TowerRecords.com a standout site, says Duif Calvin, San Francisco-based retail analyst. “It makes it more likely that you’ll find something not spotlighted at every other music site and that makes the site reflective of the Tower brand,” she says. “Automated systems will always go to the least common denominator.”

That image fits perfectly into Tower Records’ objectives with its web site. In fact, TowerRecords.com largely operates as an adjunct to the stores. “We’ve emerged as a special order site,” Bressler says. “We cater to enthusiasts who are looking for hard-to-find music.” Much of what TowerRecords.com sells would be uneconomical to stock in stores. “We sell an enormous number of titles, but there are many that we sell only one or two copies of,” Bressler says.

With that approach, TowerRecords.com has attracted a unique customer; price falls lower on its customers’ lists than with customers elsewhere. Most come for the selection, the ease of use and the ability to browse the offerings, Bressler says. TowerRecords keeps that hierarchy in mind when it makes changes to the site, as it did recently. The new version of the home page that it launched in the fall is less cluttered while listing all the major categories, has a larger area for merchandising and faster downloads. Such attention to detail pays off. “Every time we release a performance improvement, we see an improvement in the business,” Bressler says.

But even with its focus on the music enthusiasts who are shopping on the web for something unique and its stellar web site, TowerRecords.com continues to emphasize its offline roots. The home page greets customers with a “Why Buy from Tower” message that includes a reference to the company’s 42-year history. “They’re telling their customers, We’re not someone who showed up three years ago and we won’t be gone three years from now,” Calvin says. “It’s difficult to find something that distinguishes you as a brand, and that really helps.”