Retailers find out what works on Web
January 22, 2001,
NEW YORK -After what's been a trying-or dying-year for many e-commerce sites, retailers at this year's NRF convention got to hear how several e-tailers handled the past year at the Super Session titled, "Global Online Retailing: The Second Inning."
The speakers included Mark Goldstein, president and ceo of Kmart's Bluelight.com, Michael Goldstein, chairman of Toys "R" Us, David Bolotsky, ceo of Uncommongoods.com, and Anthony Noto, vp at Goldman Sachs & Co.
The bricks-and-clicks retailers, like Kmart and Toys "R" Us, learn what products work online by trial and error, and not everything in the stores is appropriate online. Kmart, which doesn't have or want all of the product available in the stores online, according to Bluelight's Goldstein, had half an acre of Christmas trees left over on the site. At $60 a tree, and $40 to ship it, it didn't make much sense online; but when the trees were placed in the stores they sold out immediately, he said. At the Toys "R" Us website, with its partner Amazon.com, Goldstein of Toys "R" Us agreed, citing a 99-cent Matchbox car doesn't make sense online. People look more for what's hot online than they do in the stores, and items can sell for higher margins, he said. For example, when his site made 5,000 Sony PlayStation 2's available to online buyers, costing $500 each, they sold out in 23 seconds.
Bolosky said, however, that he was "willing to take the risk" of selling cheaper items, like $5 chopsticks, on the site to win new customers.
Goldstein of Toys "R" Us said that he has a "pessimistic view on pure-play retailers," citing how it must be hard for them, for example, to move Christmas merchandise after the holidays without physical stores.
Bluelight's Goldstein added that there are opportunities for pure plays, but in specialized areas like the one Uncommongoods.com focuses on.
Kmart, which tried to launch a website twice before, plans to more fully integrate its stores and bluelight.com this year, he said. They have already begun with 3,600 kiosks installed in Kmart stores nationwide, connecting customers to bluelight.com.
Some e-commerce websites will continue to fall, predicted Noto. Of the 22 public e-commerce companies now operating, only eight will remain by mid 2001, he said, and some will grow at a slow rate.