December 12, 2007, 12:00 AM

Discovery unearths benefits from its new emphasis on e-commerce

If Discovery Communications needed any further validation of its decision to close 103 stores, it can look to holiday web sales that doubled on the Monday after Thanksgiving.

If Discovery Communications Inc. needed any further validation to confirm that its decision to close down 103 stores earlier this year was a good move, it can certainly look to $2 million in online sales on the Monday after Thanksgiving.

For the year, e-commerce sales are up about 36%. But more important, holiday sales for Discovery Commerce, the Internet arm of Discovery Communications and No. 186 in the Internet Retailer Top 500 Guide, have more than doubled over the previous year. On the Monday after Thanksgiving, recorded sales of slightly more than $2 million, compared with web sales of $1 million in the prior year. Web sales are higher because Discovery is able to devote more resources to online marketing, including paid and natural search, and sell higher-margin and branded merchandise. Without having to coordinate merchandising initiatives with a slower offline channel, Discovery also is able to react more quickly to changing holiday buyer behavior, the company says.

“The decision to close most of the stores with the exception of the seven airport stores we run in conjunction with the Hudson Group allows us to concentrate on higher growth e-commerce and licensing opportunities,” says Discovery Commerce president and general manager Patrick Gates. “We are able to react more quickly and nimbly online now that we don’t have to support a large bricks-and-mortar channel.”

Discovery, best known for its more than 100 television networks including Discovery Channel and Animal Planet, announced in May it would close its 103 mall-based and standalone stores and lay off 1,000 employees, 25% of its work force. The final mall and stand-alone stores were closed in August.

Since the decision to close the stores, Discovery has been reorganizing certain elements of its e-commerce strategy and making refinements to its web store. For the holidays, Discovery added a one-page check-out process. The company also streamlined its online inventory by eliminating product lines it carried across all channels such as certain consumer electronics and health and fitness merchandise.

“We can now react with product and marketing more quickly to the popular Discovery brands and shows that generate the best returns through our direct-to-consumer channels,” says Gates. “With the stores we often had to add several weeks to the planning and supply chain process to make sure all the channels had the support and products needed prior to a new promotion.”

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