The role of the Internet in selling apparel products to consumers was one of the most noteworthy seminars offered at the recent Bobbin World 2001 trade show. The program, sponsored by the Information Systems Committee of the AAFA, provided an insightful and informative look at the lessons learned by Speedo, Maidenform and Oshkosh B’Gosh in the past two years. Seminar participants got a good look at the facts and fundamentals behind successful B2C (business to consumer) websites.

Seminar Moderator, Shlomo Bitter, vice president of Business Development, Computer Generated Solutions Inc. (CGS), summed up recent Internet developments in his opening remarks by stating, "The questions are the same but the answers have changed."

Despite the negative publicity from last year’s dramatic dot-com downturn, companies are using the Internet in an ever-increasing range of applications including product development, EDI, color management, training and sourcing. "The Internet is taking hold and encompassing every aspect of the business," Bitter said.

The Speedo Experience
In 1998, Speedo put up a modest site with no integration and limited inventory visibility. In April 2000, the company began working to launch a much improved, second generation website. The new site had to be online before the Sydney Olympics, which gave them an immovable deadline of September 12th, 2000.

April and May were spent on website design. Development went from May through August. Testing took place June through August. The September deadline was met with little time to spare. "It wasn’t the programming that ran them down to the wire; it was the aesthetic part of the site," Bitter commented on behalf of the company.

The new site had improved functionally, better credit card management and gave Speedo dramatically improved fulfillment rates. Sales from the site doubled.

Bitter concluded his remarks by paraphrasing one of GE Chairman, Jack Welch’s famous quotations, "What we are really doing here is managing change. We are managing change every day. Change before you have to. You have to anticipate it. Most importantly, control your own destiny as much as you can or someone else will."

Maidenform Leverages Club M
One of the key features of the Maidenform website is Club M. Visitors are invited to register their email addresses for sales and promotions. This gives Maidenform a wealth of email addresses, which the company has found to be the best method of generating increased sales across the site.

"E-mailing visitors that have registered at your website is one of the most effective forms of advertising," said Charles Codling, vice president - chief information officer, Maidenform Inc. "We see a dramatic rise in visits and conversion rate (sales per visit) after these mailings."

Implementation of the Maidenform website took five months. Initially the site drew 300 to 500 visitors per day. Currently it gets 480 to 750 visits. Sales across the site grew from $1,835 per day to $2,890 per day for the last six months. The conversion rate increased from 2.76 percent initially to 6.19 percent.

"The success of the site is a result of promoting the site," Codling said. "As we advertise back to visitors, there is a dramatic rise in visits that lasts at least a week. The conversion rate jumps from six percent to as high as 12-14 percent."

Maidenform’s ASP (Application Service Provider) bore the cost of development in return for a percentage of sales over the site. Maidenform felt that this was a good arrangement since the company views Internet sales as "found money" and offers the ASP a stake in the site’s success.

Other Maidenform.com features include a guide with suggestions as to which intimate apparel works best under various outfits and a guide to taking correct measurements for a better fit.

Oshkosh B’Gosh: Lights Out, Lights On
Jon Dell’Antonia, vice president - Management Information Systems/CIO, Oshkosh B’Gosh Inc., had the most dramatic story to tell. Last July his company’s web development partner, Pandesic, notified him that they would be going out of business January 31st, 2001. This gave Oshkosh B’Gosh six months to move to another service provider.

"We didn’t want to take it in house," Dell’Antonia said. "We quickly decided (given the six-month time frame) that wasn’t a viable option for us."

In August, Oshkosh B’Gosh sent out a request for proposals. In six weeks, the company had received 30 responses. Now came the hard part, picking a new ASP given that many industry observers estimate that up to 85 percent of them will not be in business in two years. Oshkosh B’Gosh chose to go with a company that had strong financial statements.

"We picked a company that was publicly traded," Dell’Antonia said. "You could get at their financial information. We found that they had a substantial amount of cash. That doesn’t necessarily guarantee their longevity but it was the best thing we had to go on."

Despite a furious effort to get online before January 31st, the first attempt to go live was made on February 7th. On February 16th Oshkosh B’Gosh decided to take it down.

"It was not an easy decision for us to make," Dell’Antonia said. "The response time was slow. We had inventory problems. We were getting over 70 complaints a day from customers. It was all fouled up."

It was mid-April before Oshkosh B’Gosh felt that the site was ready to go back up. They had a soft launch on April 17th and sent emails announcing they were back on the web on April 25th. The site has been up since that time.

"We were all under the gun to try to make that January 31st date," Dell’Antonia said. "In retrospect, we should have paid more attention to making sure it was right than to hitting the date. Once you’re out on the Internet, you don’t want to not be there."

In the first two weeks, 2,500 orders were processed over the site. Average dollars per order were up 50 percent. Units per order were up. The conversion rate was three times better than before and the shopping cart abandonment rate dropped 55 percent.

Dell’Antonia attributes these improved numbers to better functionally of the site especially to easier password selection. The company’s old ASP partner had had very stringent password requirements. The password had to be 10 characters long. Passwords couldn’t have consecutive identical alphabetic characters. All passwords had to include at least one number. The result was that customers couldn’t remember their passwords when they returned to the site. It was a constant source of complaints.

"What did we learn?" Dell’Antonia said. "Pick your partner very carefully. Take the time to research the company’s other customers and talk to them. That is the one thing that we should have spent more time doing. You need to have an exit strategy."

Surprises And Conclusions
Both Maidenform and Oshkosh B’Gosh discovered some surprises in their Internet efforts. Both found that returns are low and range from a few percent to a fraction of one percent. Maidenform learned that full figured women have a definite preference for shopping on the Internet. Oshkosh B’Gosh realized that it’s kids shoes were much more popular over the web than in the company’s retail outlets.

It is important for companies to bring their real world business experience to the web, according to Bitter. This is the secret to staying out of the 99 percent club, which is a humorous reference to the many dot-com companies that had their stock prices drop by 99 percent or more last year.

"These three companies (Speedo, Maidenform and Oshkosh B’Gosh) have something in common: very strong brands and very strong systems in place," Bitter said. "As you can see there is no assurance of success. A lot of planning has to be done."