FEDERATED TO BROADEN ‘NET PLANS

Byline: Valerie Seckler

NEW YORK — There are big plans afoot at Federated Direct to fully exploit its cyberspace territory.
The nation’s biggest department-store company — a pioneer on the Internet with its launch of macys.com in early 1996 — is substantially expanding its online offer of fashion and beauty goods under designer and national brands this summer. It’s part of Federated Direct’s evolving plan to present the best of its stores on the Internet, in an atmosphere that virtually re-creates the environment in which a customer would encounter a big beauty brand or fashion label when she’s shopping a Macy’s or Bloomingdale’s brick-and-mortar location.
Dawn Robertson, president of Federated Direct, told WWD that the online side of the division, which also encompasses Macy’s By Mail and Bloomingdale’s By Mail, has plans to:
Extend the Lancome e-boutique, launched at macys.com in December, to bloomingdales.com this summer.
Open a Calvin Klein e-boutique at bloomingdales.com this summer, with different apparel than carried in the designer’s e-shop at macys.com.
Add a substantial number of fashion labels and beauty brands to both macys.com and bloomingdales.com, with some carried in e-boutiques, and others displayed by category.
Launch a hot@bloomingdales mini-site at bloomingdales.com, highlighting leading fashion trends of the moment, which also can be found at the stores.
Roll out the first Internet-enabled kiosks at Macy’s stores, this fall, to merchandise an assortment larger than the one offered on the selling floor, in “some key categories.”
Introduce the second generation of ‘Net-enabled kiosks at Bloomingdale’s, whose features are now being updated, based on feedback from shoppers who used the setups in a pilot. The “eOSKS,” launched in November 1999 at 12 Bloomingdale’s stores in New York, Chicago and Los Angeles, were used mostly to access content like store directories and trends.
The pieces add up to a broader strategic vision outlined by Robertson in an interview Tuesday. “We are moving now to improve the branding experience online and to better re-create the brand’s image and merchandise experience at the store on the Macy’s and Bloomingdale’s Web sites,” Robertson said. “We will do that, this year, especially by merchandising more goods online in an updated environment.” For example, Macys.com was relaunched just last month with a softer, more sophisticated look that highlights national brands, private labels and boutiques at the Web site. Macys.com carries approximately 50,000 stockkeeping units.
Federated Direct is estimating sales from its Internet businesses — macys.com, bloomingdales.com and Fingerhut — will be between $200 million and $250 million this year, marking growth of 28 to 60 percent, versus Internet sales of $156 million transacted during 2000.
Robertson, 45, declined to name the new brands slated for the online sites, or specify how large the mix will grow at macys.com or bloomingdales.com, but she did say they were sticking to their tactic of limiting overlap in labels and items. “We launched Tommy at macys.com, but we won’t be doing that at bloomingdales.com,” Robertson said. “We’ll do Calvin at both, but the merchandise will vary.”
Concept shops currently mounted at macys.com include Liz Claiborne, Polo Ralph Lauren, Kenneth Cole, DKNY, Jones New York, Calvin Klein, Tommy Hilfiger and Lancome.
“We are fairly well along in discussions with beauty brands to put a boutique on our [Web] site, as you would put a boutique in your store,” said Kent Anderson, chairman and chief executive officer of macys.com, in a separate interview from his office in San Francisco. “It’s a little more complex to do a mediated boutique, like the one with Lancome,” Anderson observed. A mediated boutique is essentially created by a brand and then mediated, or adopted, for an e-commerce site by a third party. But it makes the image-conscious brands more comfortable. In fact, it was image management that prompted Lancome to withdraw from macys.com in November 1999, because it was unhappy with its presentation.
In Lancome’s case, it was Paris-based iMediation — one of Bernard Arnault’s numerous investments through his Internet development arm Europatweb — that resolved Lancome’s concerns. At the current version of Lancome’s e-boutique, for instance, there is no apparent button to click on to return to the macys.com landing pad, noted Greg Taylor, iMediation’s senior vice president of field operations, who is based in the company’s New York office. Instead, the user needs to click on the macys.com logo to get back to the Web site’s front door.
“Macy’s and Nordstrom weren’t wild about Lancome going direct to the customer with e-commerce,” Taylor recounted. “Now, the focus at the Lancome company [Web] site is more promotional and marketing driven. L’Oreal invests tens of millions [of dollars] per quarter to create merchandise content, and our application tells the macys.com server how to display and price items on the site.”
Currently, the Lancome boutique is the only mediated model at macys.com. “The technology is built to specification in Lancome’s case and is complex,” Anderson noted. “Could a less sophisticated [brand] pull off an intermediated Web site? Estee Lauder would be comparable in its ability to do so; the power of the brand is great and their ability to execute is very good,” he continued. “Others are better equipped to exchange work and assets. With Polo, for instance, they choose the items for the site, and we photograph it.”
The two-month-old Lancome boutique at macys.com carries about 800 items and, according to Anderson, “it is probably the largest branded beauty assortment carried by an e-tailer. We are very pleased with the Lancome business, which continues to grow,” he reported. “We got some good offline response [this month] to a Lancome-macys.com joint e-mail marketing campaign,” Anderson added referring to a monthly program that got off the ground in March.
“I’ve had to work hard to get our group of branded boutiques to allow macys.com to do business with them, to convince them we could represent their brands well and execute online,” the Web site’s ceo acknowledged. When asked to pinpoint his top priority, Anderson, 46, said it’s not to add more brands, but rather to focus on “the blocking and tackling of everyday business,” like finding the right fashion-basics mix and leveraging the Web site’s database.
“We’re still at the tip of the iceberg,” Anderson said. “We’re learning how to harness technology to build real-world outfits — that’s the tricky stuff, especially in the world of retail, which is a moving target. Clicks-and-bricks is the answer,” he contended. “It’s here to stay. If companies don’t do it, it’s a huge mistake.”