Landsend.Com

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LANDSEND.COM

LandsEnd.com was launched in 1995 by catalog apparel firm Lands' End Inc. The site, which started out selling 100 items, grew to include all Lands' End catalog items and was visited by 38 million World Wide Web surfers in 2000. Profitable since its inception, LandsEnd.com was considered the number one online apparel site, having secured $218 million in sales in fiscal 2001.

A direct merchant of casual apparel, luggage, and traditional home furnishings, Lands' End was founded in 1963 by Gary C. Comer. By the mid-1990s, the company had gone public and expanded into the United Kingdom and Japan, selling its merchandise through catalogs as well as outlet stores. Known for his innovative approach to business—Lands' End had been the first to offer a toll-free 800 number in 1978—Comer continually looked for new technology to bolster his business.

Eyeing the Internet's potential as a lucrative sales channel, Lands' End launched its company Web site in 1995 as a means of complimenting its catalog and outlet store sales. In the first month of operation, the site recorded just $160 in online sales, offering approximately 100 different items from the Lands' End catalog. It soon proved to be a success, however, securing a profit in its first year of operation.

The demographics of typical Lands' End shoppers fit well with the company's e-business strategy and left management confident that the Web site would become as popular as the catalogs. According to the firm, a large portion of its customer base owned a personal computer and was twice as likely to have online access than the rest of the population. A typical Lands' End shopper was between the ages of 35 and 54, with an average household income of $60,000. Nearly 88 percent had earned a college degree, and two-thirds were employed in a professional or managerial position.

In 1998, sales from Web operations reached $18 million. Reflecting its commitment to its Web-based business, Lands' End began to advertise its site in print ads and on television. In April, Lands' End added technology to its site, allowing shoppers to mix and match apparel. Entitled Outfits Online, the tool enabled online customers to coordinate 4,750 different outfits. The company also introduced Your Personal Model, which allowed users to create a 3-D model of their body shape. The tool then suggested clothing that was appropriate for that body type. The firm also began utilizing technology that enabled shoppers to create personal accounts that would store billing and shipping information to make future online purchasing quicker and easier. By December 1998, over 1,000 shoppers had opened accounts.

LandsEnd.com also deployed internal technology that proved effective. While warmer weather in the U.S. during the fall season of 1998 left many apparel retailers overstocked with winter outerwear, technology used by the firm allowed it to manipulate its merchandise mix in a timely fashion on the Web site to reflect the changing weather. LandsEnd.com also added three additional servers to speed up order-processing time on its site during that year's holiday season. According to monitoring firm Keynote Systems, the LandsEnd.com site was one of the best operating sites during the 1998 holiday season.

The company's foray onto the Web continued to pay off as online sales grew to $61 million in fiscal 1999. However, while Internet operations appeared to be booming, other business efforts by Lands' End were falling short. High expenses and lackluster catalog sales began taking their toll on the firm's bottom line. As a result, the company announced that it would pare back its catalog mailings and begin to focus additional efforts on Internet sales. Wanting to secure a larger portion of total company sales from its Web business, Lands' End began to bolster its customer service offerings on its site.

By the end of 1999, LandsEnd.com was known throughout the industry for its innovative Web site. In November of that year, the firm launched Lands' End Live, which provided online shoppers with real-time personal assistance twenty-fours hours a day, seven days a week. LandsEnd.com shoppers were also introduced to Shop With a Friend, which enabled people in different locations to shop online together.

Lands' End continued its focus on e-business into the new millennium. Having been successful in selling to consumers, the firm began targeting business customers. In March 2000, LandsEnd.com began offering customized Web sites for businesses such as General Motor's Saturn division and RadioShack. The sites allowed employees to order corporate merchandise online. The Lands' End site also featured Logo SnapShot, a tool that enabled business customers to view different corporate logos on various types of merchandise. The firm focused on international efforts as well. With sites already available to shoppers in the U.K., Germany, and Japan, LandsEnd.com expanded its reach to Ireland, France, and Italy in the fall of 2000.

LandsEnd.com experienced continued success in fiscal 2000. Sales reached $138 million—10.5 percent of total Lands' End sales—and the site logged over 38 million visits. The firm's focus on customer service continued to garner industry attention as well. According to a September 2000 BusinessWeek Online article, Lands' End had "blazed the path towards blending people and technology in Web shopping." That year, Smart Business magazine ranked LandsEnd.com one of the most successful online retail sites for its customer service and Web-based technology.

While a slowing economy began to wreak havoc on many Internet-based firms in 2001, LandsEnd.com continued to secure positive sales results. That year, LandsEnd.com recorded $218 million in sales, roughly 16 percent of Lands' End total revenues. However, Lands' End continued to falter due to catalog related expenses. In an attempt to shift more of its catalog-related telephone sales to Web-based sales, the company began aggressively promoting LandsEnd.com to encourage online purchasing. To cut costs, the firm also mailed out smaller than usual catalogs to its online customers.

In early 2001, reports had surfaced that Comer—owner of 55 percent of the firm—was looking for a buyer for Lands' End. Its successful Internet business made it an attractive acquisition target; however, by mid-2001, those reports remained only speculation. While LandsEnd.com continued to prosper, management of the bricks and mortar firm remained focused on reducing costs and making Internet sales an even larger portion of total revenues.