OFF-LINE TO ONLINE
Byline: Wendy Hessen
NEW YORK — Whether you have a well-established presence on the Internet — a rarity among accessories makers — or are a neophyte still in the planning stages, there are key elements to consider if you are to succeed.
Accessories are in a major growth cycle, and more and more firms are researching e-commerce and analyzing how to mesh their businesses with online operations. There are challenges in jumping into this still new retail channel, but most companies see particularly strong opportunities for accessories.
“We believe accessories will be highly successful on the Internet, right behind books and CDs,” said Laurie Cohn, a principal at G2G Productions, a Cambridge, Mass., Internet consulting firm.
G2G has developed sites for clients as diverse as leather goods maker Dooney & Bourke to the piano manufacturer Steinway & Sons. She said accessories probably would be an area of concentration for the firm in the future because of the category’s compatibility with Internet commerce.
“There are none of the usual impediments seen with clothing, such as fit or sizing, and the return rate is lower, which decreases customer-service challenges. Plus, there are some real perks. The measurements of each handbag or item are more consistent and you can zoom in on products or show them three-dimensionally. And you can play with color more than in a catalog.”
Julie Kurtzman, an Internet consultant, agreed.
“Accessories have a much better chance of major sell-throughs on the Internet than other products,” she said. “Besides the fit issues, the gift aspect of accessories just lend themselves to the net. It’s so easy to get a detailed description of something and just order it.”
Kurtzman was formerly a vice president at Guess, where she was responsible for the development and initiation of the megabrand’s site, which was launched in 1996. She has worked with such clients as Swank and Deutch Advertising.
Swank, which has been developing a site for several months, expects to be up and running in six to eight weeks, according to its chief executive officer, John Tulin. As a public company, Tulin said, Swank felt it was particularly important to get into the Internet game.
“Let’s face it, if we’re going to reach Generation Y — the largest consumer group that we’re all trying to get to — that’s the place to be,” said Tulin. “Plus, our shareholders need to see the extent of what we do. We’re going to dabble in e-commerce with both Swank merchandise and some of our licensed products.”
In addition to its own branded line, Swank produces the licensed Kenneth Cole, Guess, Anne Klein and DKNY collections of costume jewelry.
Another costume jewelry firm, Victoria & Co., has opted to work with established multiproduct sites rather than open its own.
With the help of a consultant, after several months of research, the firm narrowed its field of compatible sites to three: styleclick.com, discountdomain.com and cybershop.com.
“Styleclick has an atmosphere that is most similar to what we have traditionally defined as a pleasant shopping experience,” said Patricia Stensrud, vice chairman and ceo. “They have taken the most comprehensive merchandising approach to e-commerce. They seem to know the nuances that lead to sales better than many others, plus, through their multiple portals and links with other shopping sites, they provide a variety of ways to get to their site. They are aggressive and very technically astute.”
Debbie Garrow, Victoria’s vice president of marketing, said discountdomain.com is a site with a high hit rate and high conversion to sales among young consumers, age 15 to 25. She said cybershop.com, with more of a ready-to-wear focus, could be appropriate for some of Victoria’s brands.
“We’re looking at different sites for our range of proprietary brands,” said Garrow. “For the most part, we are restricted from marketing our licensed brands, but we own Napier, Silverscape and Richelieu.”
Besides its own brands, Victoria produces the licensed Nine West, Givenchy and Worthington lines and is the licensee for the yet to be launched Tommy Hilfiger line.
“We’re in the midst of the process with all three sites and will have product up by the end of September,” said Garrow. “We will take a quick read of what works and make some determinations of how to go forward, but admittedly, we don’t have a clue as to what the volume will be.”
Garrow said the assortment would vary by site; styleclick will offer the most products, roughly 40 styles from several of Victoria’s brands,
Stensrud said the firm would keep a keen eye on demand to avoid supply problems.
“It’s important to do some testing, get a sense of the rhythm and cadence, and then figure out a rational structure,” she said. “I don’t think anyone really knows how this will play out. We’re just trying to pick our spots.”
Though companies pay considerable attention to the initial cost, which consultants consistently say they underestimate, they often neglect to factor in the costs of marketing and promotional support and of frequently updating and maintaining the site.
The costs of establishing a site vary wildly, depending on its purpose, features and links. According to Forrester Research, a firm that studies the effects of technology on businesses and consumers, developing a site can cost from $300,000 to more than $3 million.
G2G’s Cohn said, “While we’ve found that most companies are surprised at the speed of return on their investment, initially, many are hesitant to make the investment because they don’t understand what it takes to do it right and generate sales and build brand equity. Some see a return within the first year; others take two years. This is a key opportunity to take control of a brand’s presentation. Having someone do it cheaply can actually do a brand harm.”
Swank’s Tulin agreed, saying, “I don’t think you can do anything without spending six figures. After all, you are making a corporate presentation. It needs to be something you can be proud of.
“Sure, two high school kids can build a site in a day and a half, but consider the company of others in the medium. When you look at sites like those of Levi’s or Guess, you realize you’ve got to be comparable. Otherwise, it’s like having a bad billboard among many great ones.”
“One of the biggest mistakes most companies make is that they don’t include a budget for marketing and promotion,” said Kurtzman. “They wouldn’t do that with a store, but many forget. They should include the address everywhere, from ads to stationery to hangtags to packaging. It’s a long-term commitment, similar to opening a store.”
Sites need to be frequently refreshed, to capitalize on seasonal merchandise offerings, holidays and special events. The success and breadth of a site is also dependent on a company’s existing back-end systems — the ability to monitor inventory, the number of stockkeeping units, fulfillment and customer service capabilities, all of which get factored into the price of development.
Fossil, which has been on the Internet for almost four years, is evolving beyond the basics, according to John Talbot, vice president of marketing.
“What was initially about education and brand-building is now also about driving traffic to department stores and our own brick-and-mortar distribution, and developing business links with our retail partners,” said Talbot.
The goal, Talbot said, was to speed the process from creation to actual delivery, which, it is hoped, would mean thinner and more productive inventory levels, and a more correct assortment for Fossil’s accounts.
“Our dream is to utilize the Internet mechanism to help us get faster,” Talbot said, adding that the company hoped to offer a digital replacement to physically written orders, and allow accounts to check their account status and monitor repairs and back orders, so Fossil’s network of sales reps can spend more time evaluating what consumers want and less time writing orders.