December 31, 2003, 12:00 AM

Bluefly.com tests a multi-channel strategy

As the competition for customers continues, pure-plays must look at selling through additional channels to grow. Discount designer apparel retailer Bluefly.com is one of the latest to add a brick-and-mortar store, opening in New York in time for the holidays.

Now that online retailing is maturing following the boom-and-bust cycle of the Internet, many retailers are fine-tuning multi-channel strategies. With competition for customers growing online as well as offline, retailers must consider the advantages of selling through an additional channel, experts say. So it’s no surprise there are few pure-play online retailers left. “Even the strongest of the remaining online pure-plays need to reevaluate their retail store viability,” says Jim Okamura, senior partner who specializes in multi-channel retailing at consultants J.C. Williams Group.

One of the latest online pure-plays to test the brick-and-mortar world is New York-based Bluefly Inc., an, until now, online-only retailer of designer fashion apparel at discount prices. In time for the holiday shopping season, Bluefly opened the 4,200-square-foot Outlet Store for Bluefly.com at 43 W. 24th Street in Manhattan.

A week before Christmas, Bluefly was still deciding whether to make the store permanent, but early results were positive. “We were very pleased with an early test, which exceeded our expectations,” says CEO Ken Seiff. He noted that some items sold at the store at higher prices than similar items on the web site.

Bluefly sees the store concept as a way to merchandise products not ideally suited for online displays. “Some of our orders from vendors include items in such limited quantities that it is not economic for us to photograph and describe them for sale on our web site,” Seiff says.

In addition, about 10% of products that get returned to Bluefly cannot be returned to online inventory. Having a store provides Bluefly another opportunity to sell those items instead of writing them off, Seiff says. “We realize that the most profitable retailers typically have the best final liquidation strategies,” he says.

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