Groupon says its focus is on the bottom line, rather than top-line growth.
Redesigning an Internet store may be all about finesse, but the results are all about finance. When Spiegel.com unveiled its new design in November, sales climbed 30% and traffic surged more than 60% in a matter of weeks. At a time when market speculation continues to propel some of the Web’s hottest retail properties, Spiegel executives say their relaunch already is paying for itself.
“We’re not making bets on the future of online sales,” says John Irvin, president of Spiegel Catalog, Downers Grove, Ill. “The Internet is a growing and viable part of our business-not in five years but right now.”
Irvin won’t give specific numbers, other than to say that Web sales are rising about 300% a year across all of parent Spiegel Group’s e-commerce operations. The units include casual clothier Eddiebauer.com and Spiegel.com, which like the catalog sells fashions, home furnishings and electronics to a customer base that’s 80% female. Richard Burke, managing director of Spiegel.com, attributes the rise in sales to the reasons behind the relaunch: simplicity and convenience. The navigation bar is better organized, pages download in a third of the time, and customers can move from the home page to putting goods in their shopping carts in just three clicks, down from four or five with the old site. “The redesign made all the sense in the world,” says Burke. “And it’s a heck of a lot cheaper than printing catalogs-about one seventh the cost of putting a catalog on the street.”
Far from cosmetic
Across Internet retailing, executives give similar reasons for a wave of site makeovers that are far from cosmetic. Spiegel, J. Crew, L.L. Bean, Garden.com, Furniture.com, Macy’s, Wal-Mart and others have recently rolled out redesigned sites aimed at improving both their appeal to shoppers and their ability to merchandise. All say they’re listening more closely to what their customers want, generally by inviting comments via e-mail panels, focus groups and tests involving customers or employees. A few plan to push the limits of personalization by experimenting with so-called narrow-casting, which tailors pages to each customer’s interests based on previous visits to the site. Established retailers like Spiegel generally undertake redesigns to increase sales, refresh their sites, keep up with competitors, or extend markets or product lines, says Duif Calvin, senior retail consultant at iXL, an internet strategies and services firm based in Atlanta. “Dot-coms are a little different and may change their sites two or three times in their first 15 months,” Calvin adds. “They launch with something very edgy. Boo.com is very edgy, for example, and very slow. My guess is that you’ll see a full makeover in four to six months to make the site faster, streamline ordering, and increase average order value.”
Though no one officially tracks Web store redesigns, e-commerce vendors, consultants and design firms say they’re seeing a steady uptick in new projects. “This activity is not so much about taking advantage of new bells and whistles as it is providing better service,” says Kim Free, director of e-business at CommercialWare, an e-commerce software vendor in Natick, Mass. “A lot of retailers dipped their toes in the water and launched sites when there wasn’t a clear set of rules about the basic functionality they needed to deliver. They looked at the Web as just a user interface and not a true transaction processing system. Now they understand that it’s the real thing, with real revenue and real possibilities for enhancing their brands.”
But possibilities remain just that without better links to the back office, Free adds. More than simply remodeling the storefront, many of today’s relaunches tie inventory, order processing and fulfillment more tightly into site operations. Marketing is another big driver, with e-retailers realizing that they’ll get more mileage out of personalization and customer service features if the infrastructure is there to support them. Though increasingly comfortable with the Web, shoppers won’t return to sites so overwhelmed that they freeze up or so cobbled together that they allow consumers to order goods already sold out. In fact, it’s clear that some angry customers will do more than vote with their mouse: Witness the class-action suit recently filed against Toys “R” Us by angry customer s who allege the retailer accepted online orders that it knew it could not fill.
Spiegel starts over
Spiegel.com steered clear of a Christmas catastrophe by deciding a year ago to rebuild its site from front to back. A newly assembled Web team found two major problems: The old site couldn’t handle an influx of holiday shoppers, nor would it survive the Y2K rollover. Though the previous design was just two years old, the site’s technology backbone was older and far out of sync with Spiegel’s growing needs.
Six more powerful servers now handle even more volume than 14 supported before the relaunch. In October, a month before the revamped site went live, Spiegel.com logged 529,000 unique visitors, according to PC Data Online of Reston, Va. The next month-thanks to the start of holiday shopping, plus e-mails inviting 175,000 customers to take a look at the new design-traffic surged to 868,000 without problems. Visitors tapered off at 543,000 in December, a pattern common among sites selling similar merchandise, such as Macy’s and Nordstrom.
Of course, Spiegel’s ability to sustain the increases in traffic-and sales-will determine the relaunch’s ultimate success. The crush of new visitors added 250,000 e-mail addresses to the site’s customer ranks, strengthening its marketing base. There’s no better message to send out than the arrival of new merchandise. And the task of loading fresh images and descriptions was literally taken off the Spiegel staff’s hands with the arrival of the new computer infrastructure. “The old site required a significant amount of manual work,” says Burke. “Since there’s very little carryover from season to season, refreshing the content was a huge process requiring us to call in staff from other areas to help.” A new content loader maintains specifications for headlines, text and images, allowing merchants behind the scenes to test new promotions and expand hot-selling categories without the technology hassles.