Two-for-One Deal

Preparing for the busy holiday selling season is a huge challenge for retailers every year. It involves anticipating what customers will want, picking the right merchandise to serve their needs and ensuring all hands are on deck to deliver the goods. Add the need to update your on-line shopping channel to reflect this holiday season's offerings, and you've got a formidable task on your hands.

Now imagine you have two Web sites, with completely separate identities and merchandise assortments, which need updating in a major way before the shopping season starts.

That's the challenge facing Bill Turner, executive vice-president of merchandising and logistics at Sears Canada Inc.

Not only did the 10,000-item Sears Christmas Wish Book catalogue need to be added to the Sears e-commerce site (http://www.sears.ca), but the new-look Web site for its Eatons division (http://www.eatons.com) is set to relaunch this month in conjunction with the reopening of seven Eatons department stores in major urban centres across the country.

As Turner explains, Sears has decided to keep the Eatons brand separate from the parent company's mass-market retail identity. As part of a marketing plan to promote Eatons as an upscale, contemporary shopping experience, the eatons.com site will offer a select number of brand-name and designer-label products when it relaunches.

Eatons.com will also feature interactive content to create a "special" experience for Web customers, Turner says.

"There's going to be sound, there's going to be video. Merchandise is going to move. If there are four colours available for a sweater on a page, you'll be able to click on a colour and the entire sweater will change to that colour," Turner says.

Another idea being considered would be to allow visitors to eatons.com to manipulate in real time the controls of camcorders offered for sale on the site. "You'd actually go into the zoom position on the camcorder, click on it, and then you could zoom in and zoom out -- actually watch it, live action," Turner suggests.

While sears.ca and eatons.com will present very different faces to consumers, the two Web sites will share one thing in common -- both are able to leverage the extensive logistics infrastructure that has supported the Sears catalogue business for decades. According to Turner, Sears's distribution centres in Regina and Belleville, Ont., have the capacity to handle a perpetual inventory of 250,000 SKUs.

"If I were to add another product category with 4,000 or 5,000 SKUs, I probably wouldn't have to put many more resources in place, as far as systems support and people support. It would be a long time before I would have to add a lot of cost there," Turner says.

Roughly 80 per cent of the products available for purchase through sears.ca are merchandise items featured in Sears's seasonal catalogues. On-line orders placed through the Web site are routed through the same order-entry system used by call centre operators to fulfil orders placed via Sears's 1-800 number. The addition of real-time order confirmation capability to sears.ca in May 1999 has enabled Web shoppers to receive immediate confirmation of product availability and delivery date.

"On-line real-time order confirmation is absolutely critical to delivering effective customer service," says John Smith, senior vice-president and CIO of Sears Canada. "We can't give you the instant gratification of going to a store and walking out with your purchase when you're shopping on-line. But we can give you the instant gratification of knowing the product is available and knowing exactly what day it's going to be delivered to you."

Although most in-stock items can be shipped the next day, a staggering 98 per cent of Sears Web customers choose to pick up their orders themselves at one of the company's 2,000-plus agent locations, according to Turner. He explains most customers work all day and find it more convenient to pick up their purchase at a Sears agent in the evening, while saving the cost of the shipping charge at the same time. In addition, returns can be taken back to the agent or a store location for a quick refund.

In the case of the new eatons.com site, customers will also have the option of paying for home delivery or picking up their order for free at a Sears agent. Depending on how well received the latter option is among Eatons customers, Sears may expand its agent network and give it a new identity, possibly inviting other retailers to co-locate their order pick-up spots at one of its locations.

Turner says the idea would be to eventually create a generic name -- such as "On-line Canada" or "Catalogue Canada" -- for these pick-up locations. "And we'll hang shingles under it -- you can pick up your Sears merchandise here, or Eatons merchandise, or Roots merchandise," Turner says, adding that these strategies are still under development.

According to Smith, the revenue forecast for sears.ca's 2000 fiscal year was CAN$170 million, up substantially from the site's 1999 Web sales of CAN$22 million.

However, Turner says that projection has been rolled back a bit. "We originally said CAN$170 million. I think it will be somewhat less than that," he says. "It will be significantly more than CAN$100 million, but I can't give you an exact number."

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