(3 of 3)
Multichannels, of course, have the maddening advantage of starting out with trustworthy names. And in some cases, the dotcom version of the name is becoming more trustworthy than the original. Take J.C. Penney, whose mall stores have been struggling and whose stock has dropped 16% this year. The retailer says it's the victim of a bad fashion year. For JCPenney.com on the other hand, Christmas has come early--the site doubled 1999's $102 million revenue before the holiday season even began (and expects to add $100 million more by the time it's over). It's now the most visited clothing and home-furnishing site on the Web.
How did it get there? Partly through new technology. "Just4Me" virtual models were a hit, allowing shoppers to re-create themselves and try on clothes without any tedious changing-room encounters. But it's also about clever use of the parent company's infrastructure, like call centers that can process 1,000 orders a minute. "Don't forget," says JCPenney.com CEO Paul Pappajohn, "we've been in the direct-to-consumer business for 37 years with our catalogs."
These wily but tiny multichannel dotcoms are starting to look like the tail wagging the corporate dog. Bluelight.com and JCPenney.com have fewer than 300 employees between them, barely enough to run a single store. The big-box guys have created energetic, effective start-up clones that just happen to have multibillion-dollar corporations grafted onto their side. That's going to be an unassailable advantage in Rounds 2, 3 and 4. The other kind of start-up isn't done fighting yet. But don't be surprised if many of them start the next holiday season as just another blue-light special.
--With reporting by Cathy Booth Thomas/Dallas