Lands Ends Online Retailing Strategies - Essay Example

Land’s End’s Online Retailing Strategies Executive Summary: Land’s End is a prominent online retailer providing apparels and allied products throughonline. Land’s End attained market share and high growth rate in online retailing through adequate online marketing strategies. The online retailing is subjected to certain limitations when compared to traditional modes of retailing process. When compared to traditional retailing, online retailing is less costly. The geographical distances cannot be considerable in online shopping. The customers for online retailers are not centred to a specific location. They are vast and wide in nature. It will be interesting to study the strategies in online retailing that helped firms to attain market share and profit growth. In this case study the marketing strategy of Land’s End is kept under discussion. Along with excellent customer service, adequate website designs and technology are used by Land’s End to make its customers more experiencing while doing online shopping. Review of online retailing: Land’s End.com is a major online retailing group. It became a success story in the online retailing through strategic online marketing management. In the initial stage of marketing they adopted catalogue retailing as the retailing strategy. Land’s End has a number of sales channels such as folksy flagship, specialty catalogs and websites. It sells accessories, home goods, luggage and corporate gifts, to its primarily middle aged customers. Online retailing is very crucial strategy for business firms in order to sustain their market share and business growth. By identifying the opportunities of e-commerce, they adopt online retailing for marketing their apparel products. Land’s End is expanding its web presence worldwide but catalogue continue to be its primary means of marketing. (Bauer, Penney and Bean 2008). Land’s End’s major operations are related to departments such as gifts and clothing apparels for all kinds of people. The success strategy of Land’s End in retail trade is customer focused online retailing. The market research on this subject shows that Land’s End is on the top in meeting the needs of customers. Web retailers on E-commerce giant Amazon is placed second on the list. (Land’s End Tops List of customer Focused Online Retailers. 2003). Marketing Strategy of Land’s End: The factors behind the success of Land’s End in online retailing are adoption of innovative web technology and standardized customer service. ‘Land’s End Live’ is a new innovative strategy developed by Land’s End to provide maximum customer assistance by way of online chat or a call back by phone while they conduct online shopping. Land’s End attains the technological capability to provide online customers the facility of choosing apparels suited to their measurements. In the retailing website, fabric patterns and colours can be displayed more clearly through images and graphics. For providing personalized experience to online customers, sales associates are directly linked to the website. By identifying the preferences of customers, sales associates can help the customers by providing good recommendations. This innovative tool helps the firm to identify the tastes and preferences of customers for designing new products. Shoppers can select the most fitted apparels from the posted outfits on the website. Improved customer service helps them to retain the customers with maximum satisfaction. In the call centre operating as a part of the online retailing, representatives of Land’s End are well trained to answer enquiries form customers. Specialty shoppers are provided for accessing to samples of all Land’s End products. The shoppers can compare similar range of products because description about each accessory on product is provided in the website. Even sound and submerge features of child boots can be identified through the website. These unique strategies of online retailing of Land’s End make it a prominent firm in the online retailing market. (Grant 2004). In traditional retailing, the customers get assistance from well qualified sales personnel to make the correct choice in selection, and they can check the product features by touch and see the items. In online retailing, products are virtually displayed by using pictures and graphics. In place of services of sales assistants in traditional retailing, text based product descriptions are arranged for assisting the online customers. Verbal description is not possible in online retailing. So the customers are required to have adequate knowledge for understanding the text description. Traditional retailing is costlier than online retailing because of the necessity of lease space, rent property, and pay for related expenses. Online retailing is free from such costs and only website related costs are involved. It is much lower than the building costs in traditional retailing. Online retailers are not limited by geographical boundaries like in traditional retailing. They can carry operation at local, national and international levels at the same time. This provides opportunity for attaining a large group of customers for the products. Online retailing wants to focus on a large customer group. Thus customer segmentation and target group selection is a crucial task for them. Constantly changing technology is another major challenge in online retailing. Firms are required to provide attractive techniques in web designing in order to attract new visitors and sustain the existing customers. Intensive competition in online retail industry forces firms to continuously modify their marketing technology to keep up with the competitors. (Differences Between Online Retail and Traditional Retail Business. 2008). Market segmentation in online retailing: The market segmentation adopted by traditional retailers is considerable in online retail marketing also. In online marketing, firms have to focus on a vast number of customers of different groups. Thus, to attract and sustain the new customers, attractive sales techniques have to be added in the website. Thus customer segmentation is required for designing the websites and to make it attractive for different types of customers. For attracting new visitors, adequate customer segmentation strategy has to be followed. “It has always been a challenge for retailers to determine who their best customers are. They want to know who spends frequently and who spends more per order than the average consumer.” (McHale, Hespos and Porres 2002). Land’s End adopted adequate customer segmentation strategy to attract different customer groups. Market positioning: Market positioning is very important in online retail marketing. In the conditions of continuously changing technology, firms have to modify their marketing techniques by adopting innovative technologies. “Lands’ End adopted fitting technology by Image Twin, a firm that does three-dimensional body scanning. The technology allows consumers to build a virtual model based on their exact physical characteristics.” (Land’s End Online: Body Imaging and Beyond. 2009). By using the Image Twin technology, Land’s End collected the body image of customers and scanned it for creating data points. A 3D image of the body is formed from this data points and it is recorded for use on the website. In the website, the image is accessible to the shopper. Land’s End is the first to use the scanning for online shopping. This helps to avoid the problems in online shopping such as finding the right fit and filling the consumers’ need to try on before buying. Relationship management: With the opportunities provided by internet, Land’s End developed a new way of reaching their customers. The strategy adopted by Land’s End in online retailing is considered as an ultimate model for transacting business via internet. They attain the capability to transact the orders within two business days after leaving the warehouses. (Grant 2008). Localization strategy has to be followed while developing the website designs. A localized website will help to enhance the sales of products and services and improving brand fame. Land’s End’s website contents are carefully structured to fit with the tastes of different types of consumers. In addition to localizing the websites, Land’s End changed their centre practices to adhere to local conversational formalities. (Differences Between Online Retail and Traditional Retail Business. 2008). Customer satisfaction strategies: Land’s End developed advanced web technology possessing striking features which helps them to attract customers by generating interest in online shopping and to make shopping easier. Lands End.com is the only retailer using body images on websites for selling clothing products. This strategy of Land’s End became a new trend in online retailing. The website contains virtual models named as My Personal Model for helping women customers to pick suitable body type products. This helps to provide enhanced customer service to the online customers. (Land’s End Online: Body Imaging and Beyond. 2009). Relationship marketing: “With innovative online shopping features like Lands End Live, allowing shoppers to chat live with a representative while browsing, and Shop With A Friend, a feature connecting shoppers anywhere in the world to” go shopping together “online,” Land’s End ensures creating better customer relations in the online retailing process. (Investing in Japan Attractive Sectors. 2009). Marketing communications: In online retailing, communication is a major challenge. A strategy for attracting all types of customers on a global basis is required to be adopted by online retailers. In this model, face to face interactions with customers are not possible. Thus communication process becomes harder in online retailing. In order to ensure localized communication with the customers, Land’s End introduced the services of online sales assistants and with them consumers can interact with the company in their local language. “While established brand names do attract traffic, it is a positive shopping experience that brings the customer back. Consumers are finding that their shopping experience on-line is more convenient, there is greater ease of making price comparisons and gaining information about products and services. With Internet retailing there is a good selection of products and services.” (Advantages, Disadvantages of PurePlay Internet Retail). Future of Online retailing: Online retailing has a bright future with regard to market growth and customer loyalty. The online shopping trend among customers is increasing day by day. By identifying this trend most of the prominent traditional retailers are now switching over to online retailing. It is estimated that “by 2010, 71% of online users will use the Internet to shop compared to 65% in 2005, however, online retailers will find it difficult to find new non-buyers to convert. Online retailers will rely heavily on existing online shoppers to spend more than compared with previous years.” (Jupiter Research Forecasts Online Retail Spending Will Reach $144 Billion in 2010 a Cagr of 12% from 2005. 2008). The online retailing environment has matured and thus the customers are expecting more features from the online retailers. E-retailing or online retailing is highly concentrating on providing maximum customer service. Convenience in shopping is the main attractive feature of online shopping. Customers are able to shop from their personal computers or mobile phones without any demographic and time restrictions. It saves time and effort requirements for shopping process. The growing population of internet subscribers on a global basis provides significant growing opportunity for online retailers. Online payment facilities are more convenient with advanced technologies. (Investing in Japan Attractive Sectors. 2009). Online retailing is not possible in all kinds of products. There is only limited range of product suitable for online retailing. “Analysts said fashion footwear is considerably more difficult to sell online than in stores because, for consumers, the fit must be perfect. For retailers, meanwhile, each shoe style includes a multitude of sizes, thus adding complexity to the warehouse operation.” (Big Retailers Like Wal Mart and Sears are Selling Clot Online. 2004). Online retailers want to develop proper online retailing strategy to establish and maintain the trust and credibility with their targeted customers. Continuous improvement in technology is the basis of online retailing. In order to attract and sustain the customers, innovative strategy has to be developed by the retailers. The competitors in the online retailing are occupying their own unique features and it provides them competitive advantages. Along with technological innovation, customer service improvement is also required to sustain the customers for a long term. Multiple features are necessary to compete with similar online retailing firms. The basic concept of sales strategies such as customer satisfaction is also relevant in the case of online retailing. Customer loyalty can be achieved through providing maximum customer satisfaction with proper customer service. Bibliography Advantages, Disadvantages of PurePlay Internet Retail. [online]. Margot B Writers Forum. Last accessed 17 January 2009 at: http://margotbwritersforum.com/articles/MargotBArticles/pureplayinternetretail.html BAUER, Eddie., PENNEY, J C., and BEAN, L L. (2008). Land’s End. [online]. Answers.com. Last accessed 17 January 2009 at: http://www.answers.com/topic/lands-end-inc Big Retailers Like Wal Mart and Sears are Selling Clot Online. (2004). [online]. The Financial Express. Last accessed 17 January 2009 at: http://www.financialexpress.com/news/big-retailers-like-walmart-and-sears-are-selling-clothes-online/113106/3 Differences Between Online Retail and Traditional Retail Business. (2008). [online]. Ecommerce Optimization: Tips and Tricks to Help Merchants Sell More Online. Last accessed 17 January 2009 at: http://www.ecommerceoptimization.com/articles/differences-between-online-retail-traditional-retail-businesses/ GRANT, Lorrie. (2004). Hundreds of Extra Workers Help Handle Holiday Rush. [online]. USA Today: Money. Last accessed 17 January 2009 at: http://www.usatoday.com/money/industries/retail/2004-12-02-lands-end-holiday-rush_x.htm GRANT, Lorie. (2004). Land’s End is an Ultimate Online Model. [online]. USA Today. Last accessed 17 January 2009 at: http://www.usatoday.com/money/industries/retail/2004-12-02-lands-end-online-model_x.htm Investing in Japan Attractive Sectors. (2009). [online]. Jetro: Japan External Trade Organization. Last accessed 17 January 2009 at: http://www.jetro.go.jp/en/invest/attract/retail/convenience.html Jupiter Research Forecasts Online Retail Spending Will Reach $144 Billion in 2010 a Cagr of 12% from 2005. (2008). [online]. Jupiter Research. 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