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Seamless operations at Landsend.com - Statistical Data Included

DSN Retailing Today - May 8, 2000

When the Internet initially came into prominence, it was perceived by many in the marketplace as the retail equivalent of the wild, wild west--with wide open spaces and virtually unlimited opportunity. The move to electronic commerce is still a remarkable opportunity, but the virtual gold rush has become crowded with dot.com miners all staking out a claim. Inevitably, some of the interpid entrepreneurs will be left with empty pockets.

Yet some e-tailing pioneers have already hit pay dirt. Companies with infrastructures and strategies that are Web compatible--catalogers in particular--have been able to successfully transport their businesses to the online universe.

Enter Lands' End.

Since the Dodgeville, Wis.-based company began promoting its wares via the Internet in 1995, offering a collection of 100 items on a site dubbed landsend.com, the sportswear's Web assortment has grown 10-fold. Today, the site spotlights 1,000 skus from Lands' End's mainstream men's and women's catalogs, as well as its specialty books that cover children's apparel, women's business attire, men's business attire and home products.

Total landsend.com sales reached $138 million during fiscal 2000, up from $61 million rung up in fiscal 1999, with profitability well established. While the average catalog purchase is slightly higher than its on-line counterpart ($100 to $105 versus $95 to $100), the site outstrips the catalog operation profitability-wise and hosts a whopping 15 million visits annually, says Bill Bass, senior vice president of e-commerce.

That consumers are not compelled to register nor provide a wealth of personal information before shopping helps to fuel the site's success, Bass asserts. But Lands' End's approach to e-tailing, at least some facets of which bricks-and-mortar discounters would be wise to emulate, appears to be what keeps it ahead of the pack.

Notably, the direct merchant avoids distinguishing between its e-tail and catalog customer segments; all products available on the site are the same as the catalogs', and catalog merchandise can be ordered on line.

"We believe a single, focused, integrated brand is the way to go. Straying from the base has been other companies' downfall," Bass says. "We're not looking for Web customers with purple hair, we want to serve our existing clientele" of 35- to 54-year-olds with a median household income of $60,000. Eighty-eight percent of Lands' End patrons have college degrees; the majority is twice as likely as the rest of the U.S. population to own a computer. Landsend.com shoppers buy a fairly even mix of casual bottoms and tops and tailored work apparel, with women's clothing garnering slightly more business than men's.

Print and TV ads for the catalogs are used to inform audiences that the site exists. Individuals viewing the homepage can sign up to receive a weekly e-mail newsletter that features special deals and reminds them to peruse the "Overstocks" section of the site, where new offers for apparel at up to 70 percent off the original price are posted twice weekly.

Service standards from the catalog have been brought on line. In addition to the "guarantee period," which allows any item to be returned at any time for any reason, and automatic notification of important gift-giving occasions, these encompass a "Lands' End Live" link to the company's calling center at corporate headquarters. More than 200 representatives answer consumers' questions about products and facilitate the on-line ordering process. Communication occurs via live text chat or, for individuals with a second line or direct Internet connection, by telephone. A related feature, "Shop With A Friend," affords consumers the ability to shop while a Lands' End rep offers assistance on-screen or over the phone.

"Your Personal Model," a Web site enhancement that is becoming increasingly popular, lets women build and store three-dimensional models of themselves so that they may see how various outfits will look on their bodies.

Persons requiring additional assistance or answers to inquiries may enlist a link to e-mail headquarters; answers are almost always forthcoming within 33 minutes, Bass says. "We do this because at one point, we polled our customers and found out that if they could get an immediate response to e-mailed messages"--141,000 are received each year--"they would shop on line more often. And they have."

Lands' End applies the same attention to fulfillment that it does to customer service, a realm that has proven problematic for many bricks-and-mortar retailers and manufacturers making the electronic jump. Because it is at the core a catalog operation, Lands' End has in place the technology to satisfy demand for rapid delivery. Catalog and Internet orders are shipped from a dedicated UPS site in Dodgeville, affording all customers equal service no matter how purchases are initiated. Picking-and-packing functions are handled by matching barcoded labels on warehouse shelves to those appearing on picking-and-packing lists. This decreases the potential for human error and allows goods to be shipped Out on the day after orders are received.

Lands' End is also differentiating itself by offering on-line ordering capability to customers of its 9-year-old Corporate Sales division. A link from landsend.com enables employees to order any one of 250 styles of logo apparel and accessories depicted in the Corporate Sales catalog. Logo SnapShot (TM), an interactive tool developed in-house, lets buyers see how corporate logos look on different items and in different colors.

Additionally, Lands' End will also help corporate clients set up their own private intranet or Internet sites from which individual or bulk orders of logo merchandise may be generated. Unlike items available on landsend.com, these pieces are already customized to corporations' specific color and style requirements. "We call these Online Custom Stores, and they are primarily for Fortune 1000 companies that want an added measure of control where logoed merchandise orders are concerned," says Anna Schryver, manager of communications for the Corporate Sales division. The first Online Custom Store was launched for Carolina Power & Light in 1998. Today's store list includes "a multitude" of clients; among them are electronics retailer Radio Shack and car manufacturer Saturn. Saturn's Online Store alone serves 8,000 corporate employees and 400 dealerships nationwide.

To ensure that delivery to corporate clients proceeds as smoothly as consumer-order fulfillment, Lands' End has built a separate Corporate Sales warehouse in Dodgeville. A second dedicated facility is now being constructed in nearby Stevens Point, Wis., to handle overflow.

How quickly other retailers catch up to Lands' End on electronic retailing remains to be seen. But Internet success will remain the motherload in most store strategies.

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