Integrating online shopping with brick-and-mortar stores

From...

July 18, 2000
Web posted at: 8:56 a.m. EDT (1256 GMT)

by Meridith Levinson

(IDG) -- When melanie Alshab introduced herself as "the CIO of a very large landlord" to other attendees at Internet conferences back in 1997, they brushed her off like pills on a Patagonia vest. No one from the dotcom world wanted to talk to the former Simon Property Group executive because she was from the world of brick and mortar--shopping mall brick and mortar. With online shopping taking off, who needed her company's physical retail spaces anymore, anyway? Similarly, when Alshab networked at real estate conferences, her colleagues there dismissed her Internet boosterism as hot air about a passing fad. Based on what she heard at these events and from consumers, Alshab and her peers at the Indianapolis-based real estate developer couldn't imagine either channel ultimately winning out. "We believed that the physical channels would be around for the long haul as much as the Internet would be," says Alshab.

She also knew that consumers didn't understand why they couldn't return something to a store if they bought it off the website. "For consumers, the need [to integrate the channels] was already there," she says. If retailers were going to respond to this need Simon had to provide much more support than the infrastructures that companies like The Gap already provided their stores: sophisticated computer networks packed with integrated customer relationship management, distribution, logistics and inventory systems.

MORE COMPUTING INTELLIGENCE

IDG.net home page

CIO home page

Bricks, clicks can learn from each other

Mortar may give e-commerce edge

Brick-and-mortar stores want respect

Reviews & in-depth info at IDG.net

E-BusinessWorld

TechInformer

Questions about computers? Let IDG.net's editors help you

Darwin Magazine is here!

Search IDG.net in 12 languages

News Radio

Fusion audio primers

Computerworld Minute

Mixing Bricks and Clicks

After searching in vain for a company that could provide all of these services, the developer decided in 1998 that it would offer them itself through a new subsidiary called Clixnmortar that incubates, develops and launches innovative services that combine physical and online retailing. Simon CEO David Simon named Alshab company president while she juggled her responsibilities as CIO (at press time, Alshab had left Clixnmortar for consulting).

Currently, Clixnmortar offers three services. The first, MerchantWired, installs secure data networks, voice over IP and redundant WANs in retail stores. If Victoria's Secret wants to draw crowds with in-store cybercasts of fashion shows, or if a music store wants to let its customers burn their own CDs by downloading music from Web-enabled kiosks, Tenant Connect.net provides the requisite Internet connection. "These applications require some sort of IP-based infrastructure that needs to be redundant, highly reliable and burst to various levels of bandwidth," explains Alshab. MerchantWired was beta tested in seven malls in 1999 and officially launched in May 2000.

The other two services, Fast Frog for teens and Your Sherpa -- named for Tibetans who live in the Himalayas and provide support to mountain climbers -- for affluent, time-starved adults, facilitate the online and realworld shopping and buying experiences. (The services are being piloted in three malls in the Atlanta area.)

Both services essentially work the same way. Shoppers first register with Fast Frog or Your Sherpa at a designated location in a Simon mall, like the valet parking area. There, they are given a personal webpage that they access with a user name and password through either the Fast Frog or Your Sherpa websites. They also pick up a handheld computer to scan merchandise that catches their eyes in stores. After scanning something, they are prompted to answer a question on the LCD, asking if they want to buy the product now or if they want to think about it. When they're done shopping and they return the device to the specified location in the mall, it gets synched up to their personal webpage, which lists everything that they scanned. Here they decide how they want to fulfill their orders--if they want to buy it at the mall or from the retailer's website. If they opt for the Web, they determine how and where they want it shipped and if they need it gift wrapped. Meanwhile, retailers pay Clixnmortar a participation fee and a cut of each transaction.

Alshab sees several ways that these services can pay off. First, the company is developing expertise in setting up the logistics and infrastructure to help stores conduct sales across different channels. Second, it's developing partnerships with technology companies.

Know Your Demand

But that's just the beginning, according to Alshab. "Around Fast Frog and Your Sherpa, there are opportunities that we haven't leveraged yet," she says. One is to let retailers advertise on the PDA, so if customers walk by a Starbucks in the mall they'll receive a message alerting them that they can pick up a latte without having to linger.

Another opportunity surrounds the aggregated information on the products that capture the fleeting fancies of fickle teens. Alshab says that most teens don't buy much when they go shopping, and what they do buy usually sits on a waiting list for a few weeks before money changes hands. So if Abercrombie and Fitch has stocked both denim and suede jackets on its racks and is about to produce another million of each, and if, according to Fast Frog numbers, kids are snubbing the suede, Abercrombie might decide to increase the production of the denim to 2 million and deep-six the suede.

But what if the number of kids subscribing to Fast Frog isn't enough to represent an accurate sampling of buyers? Will Abercrombie be safe adjusting their production cycles?

Shannon Haslund, Clixnmortar's vice president of operations, doesn't think it's an issue. She views the information the company provides to retailers as a value-added service on top of the functionality retailers get through Fast Frog or Your Sherpa. "Retailers are already spending money studying trends between stores and trying to aggregate this information," she says

Go shopping on the subway
June 23, 2000
Not all e-commerce sites are losing money
May 15, 2000
Web shopping for the very impatient
April 13, 2000
Schoolpop: The death of bake sales?
March 10, 2000
How the e-shopping experience could be better
February 14, 2000

Integrated enterprise: More than the sum of its parts
CIO
Service beats price on the Web, study finds
ComputerWorld
Online shops mimic the mall
PC World
Bricks, clicks can learn from each other
IDG.net
Building for integration
InfoWorld
Brick-and-mortars take the e-commerce plunge
InfoWorld
Mortar may give e-commerce edge
ComputerWorld
Brick-and-mortar stores want respect
Industry Standard

Simon Property Group
Clixnmortar
Your Sherpa
Fast Frog

Note: Pages will open in a new browser window

External sites are not endorsed by CNN Interactive.