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Power to the Little People

E-business gives customers new leverage over corporate giants.

Danskin knew its site was, as Eric Nadler, vice president of sales operations and E-commerce, says, “aesthetically unpleasing,” but it didn’t want to spend a fortune to go state-of-the-art. “We had a very limited budget, and it was very important that what we invested in had immediate ROI,” he says. The third-party analysis provided Danskin with the ROI case to upgrade product presentation — it added photos, made clearer navigation a priority, and introduced a “stretch-fit” function so customers could better evaluate products. The company’s online business is up 250 percent compared with two years ago.

JoAnn.com took advantage of multi-variate testing to study whether the traditional in-store approach of placing impulse buys near checkout lines had an online equivalent. Turns out it did, but not in the way one might expect. “We tried all kinds of permutations,” says chief operating officer Linsly Donnelly. “If we noticed that the cart was full of quilting items, we’d add something in that category at a reduced price, with a click that led to additional information on that product.” That went largely nowhere. What did work was offering a generic item that any “crafter” might use, such as scissors, “but only if the buyer was given a simple photo and a ‘click to buy,’ as opposed to a click for product information.”

Building Blocks

Cross-selling is nice, and so is fixing products so that your customers like them better, but why stop there? Lego, which remains many parents’ answered prayer in this day of Nintendo and Gameboy addiction, is happily using the online world to offer products it could not offer any other way. The company doesn’t simply meet customer requests, it responds to customer designs. Using the “Lego Factory” option at lego.com, customers can download the Lego Digital Designer, special software that lets them design unique products and then order the blocks needed to make them.

“While we have 100 product designers on staff, we like to think we have 100,000 virtual designers out there,” says Michael McNally, senior brand relations manager at Lego Systems Inc., the Enfield, Connecticut-based arm of the North American branch of the Danish company. “This encourages people who love the brand to love it even more.” Within two weeks of announcing the feature, more than 50,000 North American site visitors had downloaded the software.

Web-based customer design is big in footwear (Vans, Nike, Timberland, and others), apparel, home decor, electronics, and even machine parts. Its inevitable spread will reinforce the perception among customers that they are in the driver’s seat. If companies’ Web efforts aren’t designed to reinforce that view — and capitalize on it — then they may rue the next decade of E-commerce.

Russ Banham is a contributing editor of CFO.

This is the third and final installment in our series on the first decade of E-business. The first two installments ran in the summer and fall 2005 issues of CFO IT.

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