E-commerce grew 20% for Costco in fiscal 2015—20 times faster than store sales.
Bloomingdale’s is back in the e-commerce game with a web site that generated $30 million in sales last year.
Back in the dot-com boom days, Federated Department Stores decided it would make a big splash in e-commerce. It bought Fingerhut in 1999 for $1.7 billion and planned to use Fingerhut’s catalog and web knowledge to build a major web strategy that would include Macy’s, which already had a strong web site, and Bloomingdale’s. Three years later, Federated was unloading Fingerhut and Bloomingdale’s was “the only $100 million catalog without an e-commerce web site,” in the words of Charlie Silver, vice president of marketing for Bloomingdale’s Direct. But now Bloomingdale’s is back in the e-commerce game with a web site that generated $30 million in sales last year.
Silver, with colleague Valerie B. Davis, director of marketing, Internet, outlined the fall and rise of Bloomingdale’s web strategy at the Annual Catalog Conference in Chicago last month. Their fascinating presentation gave attendees an inside look into the process by which Bloomingdale’s resurrected a failed web strategy. The key: One step at a time.
The rebirth started in April 2002 when Bloomingdale’s added a Catalog Quick Order function to its static web site, Davis said. The home page was just a box for customers to enter an item number from the catalog. There were no images; all shoppers got after they entered the item number was a description of the product and the ability to buy it. In November 2002, Bloomingdale’s put its catalog online with images and added a browse by category function. But the Catalog Quick Order feature was still the dominant image at the site.
Finally, last June, it allowed multiple ways to shop online and reduced the Catalog Quick Order box to a small part of the home page. The result: The web went from 0% of direct sales in February 2002 to more than 20% in February this year.
The next steps in the evolution of Bloomingdales.com, coming this year, will be to start search engine marketing, build an affiliate network, create a Catalog Quick Order that allows customers to input multiple numbers into one box, create Women’s and Petites sections, and integrate with stores.
Meanwhile, Bloomingdale’s is conducting e-mail marketing campaigns that have themselves evolved from an alert urging customers to look for a catalog in the mail, to offering one item that the customer could buy online (that mailing generated $700 in online sales, Davis said) to a weekly e-mail that generates $500,000 in sales per e-mail-45 cents per delivered e-mail-and accounts for 30% of all web sales.
Bloomingdale’s has reaped two major benefits from the new web strategy, Silver and Davis said. A full 20% of shoppers at the web site are new to Bloomingdale’s. And the other 80% represent channel shift from stores and catalogs to the web, which, Silver noted, reduces costs.