The office supplies retailer say it sacrificed some sales to improve online profitability. It also redesigned its business-facing e-commerce site, StaplesAdvantage.com.
By early spring, online retailers were still assessing what many point to as a defining moment in e-commerce-the enormously successful 1998 holiday shopping season that exceeded all expectations. (One example: barnesandnoble.com reported $17.9 million in online revenue for the five-week period ending Jan. 2, 1999-a 300% jump over the previous year.)
Virtual merchants have been studying their approaches, from pumping up available merchandise to producing special holiday home pages. And, for the first time, they now have significant experience in understanding what makes the Internet shopper click. "We learned at least 30 things, particularly understanding how a Web shopper shops-the functionality of it, from product display to navigation to customer service," says John Roman, vice president of direct marketing for New York-based Brooks Brothers. "We had a hell of a learning experience," adds John Rindlaub, vice president of brand marketing of barnesandnoble.com, New York.
In short, online retailers learned what worked and what didn't. "Anybody who says everything went perfectly is just blowing smoke," says John Hough, a spokesman for Egghead.com. The early analysis: It's all about convenience, good prices, customer service and available merchandise; it's not about fancy Web sites and long waits for answers to e-mail inquiries. Just as in the bricks-and-mortar world, the holiday shopping season is critical to virtual retailers-maybe even more so in these early days than to traditional stores. For some online merchants, the holiday period accounted for half or more of their annual revenue.
That's why understanding what worked-and fixing what didn't-is vital to improving performance for the 1999 season. Online retailers have targeted three keys: merchandise, customer service and marketing, and not necessarily technology. "Now it's about operational excellence and branding," says Rindlaub.
Read all about their strategies for Holiday '99 in the May/June issue of Internet Retailer.