February 20, 2003, 12:00 AM

At Payless, the web story is about supporting the store

While it sells shoes online, Payless ShoeSource is insistent that the web site support the stores. The site features store pick-up, 15,600 shoe fashions, most of which customers can’t find in stores, and an online coupon good in the store.

Neiman Marcus Group Inc. may be keeping its web site and store merchandise mixes different, but Payless ShoeSource Inc. is insistent that the web site support the stores. “These are $13 shoes and there’s a $5 shipping charge, so this is never going to be a big part of our business,” John Haugh, senior vice president of marketing told the eTail conference this week in Palm Springs, CA. “We are in this to enhance the brand.”

One way in which the site supports the stores is by being a showcase for products. The site features 15,600 shoes. Payless stores, with their average size of 3,000 square feet, could never stock all those shoes. The site hosted 12 million visitors last year who conducted 15 million searches in the Shoe Finder function. Payless maintains a database of 550,000 customers and it sent 30 million e-mail messages last year.

Nonetheless, Payless.com experienced 80% sales growth last year, with half of customers opting to pick up their orders in a store seven days later and half paying for home delivery. Haugh told conference attendees that Payless is working on a real-time inventory connection and expects to have a same-day store pick-up option within six months.

Payless also offered an online coupon for a $2 discount in the stores. “We made sure it was hard to find,” Haugh joked, and told attendees that some consumers who locate the coupon online print out a batch and them sell them at eBay.com for 30 cents.

Payless had experimented with web-enabled kiosks in stores for out-of-stock items, but no one used them to buy, Haugh said. “6-year-olds liked to play with them for video games but no one used them to buy shoes,” he said. The chain has since gone to web-based POS that a clerk can use to search for shoes at a nearby store. 65% of customers who use that service go to the other store to pick up the shoes, 25% pick them up at the same store the next day and 10% have it delivered, at $5.


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