Some Stick to Brick and Mortar
By George Anderson
Despite the incredible growth of online sales, many well-known retail names have only limited e-commerce operations or none at all.
Some such as T.J. Maxx are no longer selling online because the company’s venture into that business delivered poor results. The Limited has never even tried selling its products online. Others, such as the Swedish furniture retailer IKEA, sell a limited selection of products online leaving many of the chain’s shoppers wanting for more.
Many believe that retailers not taking full advantage of the online channel are hurting their own business while, perhaps unintentionally, sending shoppers to competitors.
Larry Freed, chief executive of ForeSee Results, offered a blunt assessment to The Wall Street Journal. “Many retailers have dropped the ball,” he said. “A strong online presence is no longer a luxury for retailers. It’s a requirement.”
Steve Davis, senior vice president of partner services for GSI Commerce said that soft online sales are not conclusive evidence that e-tail initiatives are not working. Online stores, he maintains, have become the “most-important marketing channel” for many.
Research conducted by comScore Networks lends some support to what Messrs. Freed and Davis are saying. The research firm found that during last year’s fall shopping season, 25 percent of people who went online to research products wound up making a purchase at their computer. Sixty-three percent found what they wanted online and then went to a bricks and mortar location to make the actual purchase.
Some retailers, however, remain cautious about jumping online with both feet forward.
Limited Brands only recently began selling items from its Bath & Body Works chain online. Other of the company’s banners, including The Limited and Express, have information sites but do not allow consumers to make purchases.
“Our thought is that we really want to come through with a thoughtful strategy and not just rush onto the Web to say we’re there,” said Anthony Hebron, a Limited Brands spokesperson.
Mr. Hebron’s assertion does hold some weight considering the success the company has had online with another of its banners, Victoria’s Secret. The lingerie retailer generated $4.4 billion or about 28 percent of its total revenues last year through consumer direct channels including online and catalog sales. The retailer’s annual online fashion show has become one of the most widely viewed events on the internet.
Still, there are notable holdouts. Luxury retailers such as Prada and Cartier, as The Wall Street Journal report points out, use their web sites to promote product but not sell it.
Sucharita Mulpuru, an analyst with Forrester Research, believes many in the luxury retail segment are misguided in their approach to e-commerce. “There’s still a lot of 1998 mentality — a lot of leeriness around the Internet and what it will do to the brand,” she said.
Tiffany & Co., which does sell items online, doesn’t believe that all luxury items are best sold that way. Beth Canavan, executive vice president at Tiffany, said there are reasons the retailer doesn’t sell engagement rings over the internet.
“There’s a lot to know about a Tiffany diamond ring,” she said. “A purchase that meaningful deserves a more personal exchange.”
Moderator’s Comment: Are some retailers better off sticking to brick and mortar sales alone or does today’s business environment require an e-commerce
component, as well? – George Anderson – Moderator