Former Agenda LLC co-owner Seth Haber is tasked with turning around the bankrupt web retailer.
No e-retailer is more capable of addressing the issue of web site profitability than Lands’ End. “It is the most profitable division within the company,” a Lands` End executive told the eTail Conference.
If the topic is the growing profitability of e-retailing, no e-retailer is more capable of addressing it than Lands’ End, the specialty apparel cataloger that was acquired by Sears, Roebuck and Co. in June. Last year, the company’s 7-year-old web business grew 37% to $327 million (21% of total company sales), making it the largest apparel web site in the U.S. “It (e-commerce) is the most profitable division within the company, and this year’s growth rate is the same as last year’s only on a much larger base,” reported Sam Taylor, vice president of e-commerce and international.
A key factor in that success, said Taylor, is the continuing effort Lands’ End has made in personalizing its on-line merchandising. “The Internet for the first time offers merchants a way to achieve cost-effective personalization,” said Taylor. “Consumers are looking for that, and that’s what we have focused on.”
Taylor spent much of his presentation reporting on the progress of Lands’ End’s latest personalization gambit on the web-custom-fit jeans and chinos that are individually manufactured to detailed and extremely private measurements provided by shoppers on the company’s web site. “We think it has the potential to revolutionize the apparel industry,” Taylor told the eTail conference audience.
Introduced last fall with chinos, the program is based on technology developed by Archetype Solutions Inc., which employed a large database of pant sizes from the U.S. military to construct an algorithm designed to produce a pattern for custom-fit pants. More than a dozen measurements are fed into the algorithm to produce the custom-fit pattern, which is sent to the manufacturer to produce individually a pair of pants designed to fit one customer. These include the obvious (waist and inseam) as well as more delicate and unusual measurements, which are not generally associated with pant sizes but nonetheless clearly affect their fit. These include weight, shape of hips and thighs, bra measurements and descriptions of the customer’s “seat” that range from “flat” to “average” to “prominent and high” to “full and wide.” “We haven’t made this available through our catalog,” explained Taylor, “because people feel uncomfortable giving such personal information over the phone” but are comfortable providing it via a secure web site.
Lands` End spent nine months slowly and quietly rolling out the program to give it time to identify and eliminate any bugs. For example, it had hoped that return rates would be lower on the custom-fit pants, but initially they were the same as for other slacks. “We tweaked the algorithm, and the return rates came down,” Taylor said, “and when you tweak it again for the second pair that’s ordered by a customer, the return rates plummet, because the second pair is perfect.”
Confident that it has a winner with personalized apparel, Lands` End this month launched what Taylor called the program’s “first full-blown promotion,” giving it coveted placement on the front and back cover of the company’s August catalog. Within two weeks of mailing that catalog, web sales of custom-fit jeans and chinos have tripled. “Our expectation was that between 10% and 15% of our jeans and chinos sales would be custom-fit, but the actual percentage is significantly higher. That says to us that there are a lot of women in America that have closets full of jeans and chinos that don’t fit,” he said.
To meet that demand, Lands` End is extending the program to its existing pants suppliers and beyond the supplier in Mexico that it chose when it launched the program. It is also considering the expansion of the program to other types of apparel, such as men’s shirts. “We are very excited about custom-sized clothes and what it means for customer retention,” said Taylor, noting that once a web shopper has provided her personal size information via the web and received a perfect-fitting pair of pants from Lands` End, its web site becomes the preferred place to look for that customer’s next pair of pants.
The personalized apparel program is but the latest in a string of personalization techniques Lands` End has pioneered on its web site. As early as 1998, it became the first company to employ the then novel technology of My Virtual Model Inc., the Montreal company that pioneered the concept of allowing web shoppers to see what different outfits would look like on an Internet model based on the shopper’s measurements. It was an early adopter of live chat customer assistance (1999), and two years ago it introduced “My Personal Shopper,” a tool that creates an apparel preference profile based on the web shopper’s favored choices among six sets of competing outfits.
Though admittedly somewhat rough at first, Lands` End has continually refined its virtual model feature, and Taylor claims it is now one of the most popular tools on the company’s web site. Fully 13% of web shoppers have created a virtual model on the site, and they show 34% higher conversion rates and 7% higher average orders. Taylor reported that the Personal Shopper program has also lifted conversion rates. To prove the point, he explained that e-mails that the company sends each week to web shoppers who participate in the Personal Shopper program feature a recommended product based on the customer’s preferences result in 80% higher-than-average conversion rates and 10% higher order amounts.