Private equity firm Apollo Global Management will take Rackspace private in the all-cash deal.
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Since 1783, Waterford Crystal has gone a long way toward building a brand known worldwide for crystal glass products. By the mid-1980s, it had expanded beyond crystal through its merger with ceramics maker Wedgwood, becoming Dublin-based Waterford Wedgwood plc.
But even with a greatly expanded product line, now including tableware, writing instruments, clocks and bed linens, Waterford Wedgwood realized it needed to take a bold leap in 2002 to sell direct to consumers on the web as well as through retailers.
Broad changes in the retail industry had forced its hand, says Jennifer Korch, director of Internet marketing for Waterford Wedgwood U.S.A. Inc. The company`s traditional customer base was aging, and new generations of consumers were emerging with different tastes and means of shopping.
"Younger consumers were not seeing the brand as relevant to them," Korch said at the Internet Retailer conference. "The web helps us market and build relationships with them."
Waterford Wedgwood has since developed several effective techniques to build more sales on the web while catering to retail channel partners. A bridal registry reaches out to modern brides; search marketing introduces consumers to lesser known Waterford Wedgwood lines like lighting products; and an "e-mail a friend" feature displayed with each product increases market exposure.
To protect its retail partners, Waterford Wedgwood features them in an online store locator with links to Mapquest.com for instant directions. And it always charges full retail prices on its web site, Korch said.
But the web also increases customer service; for example, by making available hard-to-find products not usually shipped to stores. "The web is a small percentage of our sales, but it`s our most profitable business," Korch said.
How the Web Improves the Store Experience
Let the store do it
Cross-Selling in the Store
Paula Tompkins, president, ChannelNet
The Internet`s role as in-store cross-selling tool was hinted at by a Yankelovich study as early as 1985, predicting customers would use technology to take control of the shopping process, Paula Tompkins, president, ChannelNet, told the conference. "That shift has been accelerated by the Internet," she said.
Tompkins noted that an in-store online presence can help salespeople keep up with product information that changes rapidly.
Regularly updating and storing information online and making it available online in the store is an answer to that challenge, but retailers must take care in how they implement cross-selling online from within stores. Tompkins cited the example of an online point-of-sale program created by Ford Motor Co. for use at Ford dealerships that did not succeed.
"The way corporate thinks dealers should sell the product is different from the realities of the dealership," she said. The effort got off on the wrong foot by including no dealer salespeople on the development committee, which was composed entirely of IT personnel. "They built a stack of specs and expected the customers and the salesperson to use that system," she said. "You can`t let IT drive a project that is about the dynamics at the point of sale."
Tompkins offered other pointers for retail operations looking to import the web into the store to boost sales. "Organize and roll it out in bite-sized pieces," to secure buy-in on the associate side, she said. "And don`t put the entire web site into the store: it has a lot of clutter."
Back and forth
Bringing the Store to the Web and the Web to the Store
Sam Taylor, senior VP, Best Buy Co. Inc.
"The big win is leveraging the strength of one channel across another. So how do we get our store-only customers to buy across both channels?" said Sam Taylor, senior vice president, Best Buy. One key is the right organizational structure. Taylor said Best Buy recently changed its system to allocate credit for web sales across stores. "That will drive the store associates to use the store kiosks more aggressively," he said.
In Best Buy`s efforts to bring the advantages of stores to the web, Taylor noted that the company`s 90,000 trained associates represent a powerful knowledge and experience base. Best Buy translates that online with an approach that provides solutions and not just products. Instead of just a list of product features, for example, there`s a shop by lifestyle guide to digital cameras. An online shopping assistant helps shoppers prioritize among feature options on complex products. There are now a dozen online shopping assistants, and they`ve lifted conversion rates by 15% to 75% for products on which they are offered, Taylor said.
In efforts to use the web in support of stores, Best Buy promotes in-store only events online and has boosted messaging about in-store pick up for online orders. It`s worked to cut to 30 minutes the acknowledgement time that an item is available, which has doubled the use of in-store pick up among web customers, Taylor said.
Taylor added that internal changes at Best Buy are also helping to support integrated multi-channel sales and marketing. Best Buy`s e-commerce unit used to report to IT, he said. "Now, e-commerce reports to the head of retail."
The range of possibilities
Web-based Kiosks: More Options, More Inventory, More Sales
Noah Maffitt, director, e-commerce, Office Depot Inc.
Office Depot is taking the web into its stores in a big way, installing eight web-enabled kiosks in each of its 900 stores. The program is a build on an earlier kiosk deployment in which the average five kiosks in each store each had a dedicated function. The new multi-function kiosks allow in-store shoppers to order products for home or office delivery from OfficeDepot.com, check loyalty points or see what they`ve purchased previously, and in what Noah Maffitt, director, e-commerce, says has been one of the kiosk`s most successful applications so far-order custom-configured computers.
Maffitt said a second, much different application also has found success: the Ink Depot, which helps shoppers find the right printer cartridge. Though focused on different types of products, the two kiosk applications share a common approach: they walk users through a process that solves a problem. "Having a specific, task-oriented process has proven to be much more effective," Maffitt said.