FEDERATED EXPANDS ITS AOL DEAL

Byline: Evan Clark

NEW YORK — Bloomingdale’s has jumped into tested water and signed on as an e-commerce partner of America Online, while its Federated Department Stores sibling Macy’s, in the same deal, has expanded its two-year-old relationship with the Internet giant.
Carol Sanger, Federated’s vice president of corporate communications and external affairs, said Thursday she expects the elements of the new deal — which are slated to be implemented by Nov. 1 — to increase the combined hits at the company’s Web sites by 20 million this holiday season.
Both stores will now be featured several times during the coming season on AOL’s welcome screen for its shopping destinations, which rotate to exhibit the logos of the site’s featured e-tailers on a daily basis. Bloomingdale’s and Macy’s will also take an equal shares of a wider placement of its logos across the apparel, housewares, jewelry and cosmetics categories of the Shop@AOL, Shop@Netscape and Shop@CompuServe destinations.
Sanger told WWD that the “heightened visibility” resulting from the deal is an important strategic component for driving business at both sites.
Federated was the first major department store player in the U.S. to establish a significant presence on the Web with the launch of Macys.com in 1996 and its expansion in 1998, but it has struggled to integrate that business effectively with its Macy’s by Mail and Macy’s store operations. Still, Macys.com has been the more successful of the two Federated sites, occupying the place of 14th most visited Web site of an apparel merchant this August, as it pulled in 780,000 unique visitors, according to Web ratings agency Media Metrix. By comparison, Bloomingdales.com did not make the agency’s list of heaviest trafficked sites of apparel merchants in August, which means it lured fewer than 200,000 different customers that month. By comparison, 2.9 million people visited JCPenney.com in August, 1.3 million hit Gap.com, and 1.3 million checked out OldNavy.com, according to Media Metrix.
With AOL’s Internet portal setup, Sanger noted, “They’re in the position of being a mall developer.”
Pointing out the symbiotic relationship of the deal, she added, “You can’t have a mall if you don’t have anchors” — something at which Macy’s and Bloomingdale’s have certainly excelled at in the land of bricks and mortar.
Patrick Gates, vice president of e-commerce at AOL, told WWD that while both Federated sites will have significant placements across all of the relevant “properties,” cannibalization won’t be a problem.
“We’re playing off of the different merchandising positions,” said Gates. Both divisions have good price points and brands, he noted, adding that he sees Macy’s strength in housewares and home items while Bloomingdale’s, which he called Federated’s “marquee brand,” lends itself more to fashion items.
Gates said the deal brings “a tremendous breadth of assortment to the AOL consumer.”
The multi-million dollar agreement would further complement Federated’s long history as a retailer with AOL’s e-commerce experience, while short in years — going on five — ancient in Internet time. “We’re ectatic as we focus more on off-line/online integration,” said Gates.

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