Sears Canada is planning an extensive Web initiative to woo bargain-hunters to its growing online family.
The department store chain is developing a multi-faceted ‘outlet-style’ Web site – one that combines the traditional offline clearance model and the lucrative online auction model – and the first of its kind in Canada.
‘To keep people coming to a site, we have to continually make it a better shopping experience – we need to improve levels of service and find creative and entertaining ways to maximize the flexibility of the Internet,’ says Gary Smith, vice-president of online merchandise at Sears Canada.
‘We know from industry information that there are a lot of consumers out there who like to spend time in the auction sites and the outlet-type sites because it’s an added form of entertainment while you’re shopping,’ he adds.
While the project is still in its infancy, Smith says he’s hoping Sears’ customers will have a choice between three purchasing models: a static, reduced-price offering; a progressive mark-down offering (also known as the Dutch auction model); and finally, the popular ‘bid’ model.
Nearly the entire Sears Canada catalogue inventory has been available for online purchase since late 1997. Smith says Sears’ growing Web family is designed to appeal to the company’s current customer base – which includes seven million of Canada’s 11 million households – by providing something for everyone.
‘I believe that different customers are going to be attracted to the outlet site based on the variety of options that they have to shop,’ he says. ‘Many consumers may not be comfortable with the idea of bidding.’
Marketing plans have not yet been specified for the outlet site, but Smith says they will probably mirror the strategy now being used for the main site – promoting it in all company correspondence and advertising.
Miles Faulkner, senior vice-president of e-commerce at Toronto-based Ernst & Young, says the outlet mall concept has amazing potential on the Web – auctions are hot right now and consumers definitely understand the outlet model. There’s also plenty of opportunity for cross-promotions between the Sears sites, he says.
However, he warns the company will have to be prepared to advertise aggressively if it’s to drive traffic to the new site.
‘They definitely understand the traditional catalogue model, but they haven’t really deviated from that,’ says Faulkner. ‘So, if they’re going to start spending money on new technologies, new business processes and models, they’ll have to up the ante by putting more money into marketing to make sure they get enough traffic to justify the investment.’
