David Jones buys back into e-commerce market: TheSpot had already made all the mistakes

David Jones, one of Australia's leading department stores, has its e-commerce strategy back on the agenda with the acquisition of TheSpot.com.au and a strategic business relationship with its technology partner.

Peter Moore, CEO Cortex eBusiness, developer of TheSpot's technology platform, said it would continue to develop TheSpot's platform and work with the retailer to put the "David Jones look and feel on the front" of the former TheSpot Web site.

TheSpot was bought for an undisclosed sum by David Jones after its backers, including Fairfax online subsidiary F2, withdrew funding leaving it in a vulnerable position.

The Web site which included such ‘departments' as BeautySpot, ToySpot and HealthSpot, together with the technology infrastructure, business processes, call centre, fulfilment capability and key personnel, appealed to David Jones as it was a "clear strategic fit with the retailer's e-commerce plans", said David Jones chief executive Peter Wilkinson.

Moore said because David Jones had decided to do its e-commerce venture in-house, the retailer saw TheSpot as a site that was designed exactly as it had wanted.

"It was already done, and [TheSpot] had already made all the mistakes," Moore said.

"It has bought a business that was up and running, completely ready to go, so its new site is months away. That was the big benefit it received, it has managed to leverage something that was existing and running and had most of the kinks already out of it."

Wilkinson said: "By absorbing this infrastructure into our business, David Jones will be in a position to offer merchandise online through davidjones.com.au after the Olympics."

The revamped Web site with e-commerce capabilities will launch with cosmetics and hampers, followed by Christmas gifts, including some store catalogue offerings and related lines.

Moore said he saw it as a benefit that David Jones has "had a bash [at an e-commerce venture before] and that it appreciates how complex and important it is to get things right".

Wilkinson agreed, saying its e-commerce strategy is an integral part of the way David Jones will do business in the future, not just an add-on.

"After considerable analysis and research, we have developed a multichannelled e-commerce strategy aimed at capitalising on the powerful David Jones brand and exploiting the latest technologies to deliver the best service and products to our customers," Wilkinson said.

"While we don't expect the e-commerce business to achieve profitability in the first two years of operation, the funding of this investment will not detract from our capacity to achieve our profit growth targets for the overall business."

Market estimates for online sales amount to around 5 per cent of overall sales by 2005. Wilkinson said he expects David Jones' online sales to mirror that growth trend.

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