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Q: How do you view the chaos in e-tailing right now? A: We think that it takes three things to succeed in online retailing. One, you need to have a distribution system that can get the product to people because at the end of the day, [using] the actual Web site is the easiest part of the transaction. The next thing you need is a brand. When consumers go online, if they have thousands and thousands of choices, they are going to go to people who have an established brand. The [third] thing you need is a proprietary product. You can control the quality of the product and make sure, particularly in clothes, that there's a consistent fit -- with one size 12 fitting exactly as the next one. Most of the Internet startups in the last several years didn't have any of those three qualities. They didn't have a distribution system in place. They were trying to aggregate a number of brands.... They spent a lot of their own time and money doing advertising. If you do that, you can drive a lot of people to your site. But if you haven't taken money to build a good back end and a customer orders something for Christmas and the item doesn't come in time, no matter how much you've spent marketing, the money's wasted and you've got irritated customers. Q: How has e-tailing positively affected your business? What have you adopted from e-tailing that has helped the bottom line? A: We launched our first site back in 1995. Two years ago, we built the personal model so customers could go online and try on clothes. What we've learned, as initially a catalog company, is that there are some things that you can do better online than with a catalog -- like try on clothes. The model lets people try on clothes and mix the colors. We can offer customers the right size, based on measurements within an eighth of an inch. The customer can spin the model 360 degrees to see what clothing looks like from all sides. In April, we incorporated swimsuits onto our Web site. There are two other nice facets to e-tailing. One is the quantity of what we can do. In the catalog, we're constrained by the number of pages. We have about 90,000 different products. On the Web site, our customers have access to all of our inventory without having to look for a catalog that came two or three weeks ago. In December we weren't carrying swimsuits in the catalog, but we had them up online. We were selling 300 swimsuits a week. What's also good is when you go up online you become international. Last year, we had customers from 160 countries buy from the Web site. Q: What have you deliberately stayed away from in e-tailing? A: Some of the e-tailers coming online have to outsource their customer service or packing and shipping. We haven't done any of that. In fact, we've gone the other way. There are a lot of people who thought that if customers were doing self-service on the Web instead of calling on the phone, they could reduce their customer-service staffs and costs. We felt that was wrong. If you go in and shop in a lot of Web sites, you end up being in the equivalent of voice-mail hell. There's no way to talk to a real person. That's why we instituted Lands' End Live. On the site, a customer is one click away from talking to a real live person. It has been extremely popular. We try to do the best job we can with our customers online. We don't do anything to incentivize our customers to shop online. Prices and shipping are the same. We aim to have a great experience shopping online and in the catalogs and let the customers decide which they'd prefer to use.... Of customers coming to us on the Web, over 20% have never shopped at Lands' End before. Are they coming from other less-experienced e-tailers? They've got to be coming from somewhere. Q: Have any of the problems in e-tailing affected your plans for raising money, either positively or negatively? A: For us, it's a little bit different. Anything that we needed to launch or expand the Web site we've gotten internally. We're expanding our e-commerce presence. Last fall, in November, we launched Japanese, German, and [British] sites. In January we hired Sam Taylor, the former head of Disney's catalog and e-commerce operations in Europe. This summer we're going to be launching sites for several more European countries. The other thing we've done is expand our business-to-business sales. We sell a lot of logoed clothing to corporations, such as Saturn cars. We built a Web site for Saturn where customers can buy Saturn logoed clothes. We've been in this market for 10 years. It's 10% of Lands' End's business. Q: Looking into your crystal ball, what are you forecasting for the future? A: There are too many companies with business models that don't work. Those companies are going to go away.... You're going to see fewer people competing online. I do think the Net is going to be more of an extension of traditional businesses competing. The age of startups is over by and large. I think what you're going to see now is really established brands are going to be more and more important online. |
