New York Times e-COMMERCE REPORT
 
       
11-05-2001    

Page 2

"There's the potential for fairly significant savings, when you talk about not having to carry inventory," Mr. Bass said. "If you have too much stuff on hand, you have to get rid of it as overstocks. Not enough, and you disappoint the customers. This changes the economics of the business."

Analysts said the economics of customer satisfaction might also change. "This should be able to reduce return rates, which would be very attractive," said Chris Merritt, an analyst with Kurt Salmon Associates, a retail consulting firm based in Atlanta. Mr. Bass, of Lands' End, would not estimate the company's return rates, but Mr. Merritt said about 20 percent of the chinos bought online were returned.

In terms of custom-manufacturing apparel, Mr. Merritt said the closest cousin to the Lands' End effort was Levi Strauss & Company's Original Spin feature for its jeans. In that system, introduced in 1995, customers go to a Levi's store, where a clerk measures them and uses a computer to help configure a pair of pants that are custom-made and delivered to the customer's home.

According to Kendra Gourvitz, a Levi Strauss spokeswoman in San Francisco, the Original Spin feature will not be moved online. For one thing, the company does not sell products on its Web site, instead providing product information and referring customers to sites that do sell Levi's goods. But more to the point, the Original Spin system relies on face-to-face assistance, Ms. Gourvitz said, so "it wouldn't work online."

Coincidentally, a former Levi's executive, Robert Holloway, is the person responsible for the Lands' End customization program. Mr. Holloway, who led Levi's brand marketing unit, had the idea for an online customization process shortly after leaving Levi Strauss in 1999, he said. That idea became Archetype Solutions Inc., the company which he now leads.

It was Mr. Holloway who brought the idea for customized manufacturing to Mr. Bass, of Lands' End, last year. Mr. Holloway said he worked with Lands' End to set up the manufacturing process in Mexico, and licensed his software to Lands' End in exchange for an undisclosed fee for each custom-garment produced. Lands' End also took a small equity stake in Archetype.

Mr. Holloway said there were "other major household brands" discussing possibile use of his company's system. But such deals must wait until early April, when a six- month exclusivity agreement with Lands' End is up.

Until then, the only other major retailer with a large-scale online customization system is Nike (news/quote), which has offered customers the option of configuring their own shoes since November 1999. According to Mark Allen, general manager of the custom- shoe program, customers who pay the $10 to $15 premium can choose from about 20 different shoe models — typically for basketball and soccer — to customize with colors and a name ID.

Beginning next year, Nike plans to offer customized cushioning for certain running shoes as well. "We'd originally targeted just the 14-to-24 year olds with this," Mr. Allen said. By expanding the program to include running shoes, he said, the company is banking that customization has much broader appeal.

Mr. Bass, of Lands' End, already plans to expand the customization system next year to include jeans. And while he must prepare himself for the possibility that consumers could greet this new feature with a chorus of yawns, Mr. Bass said that he was setting up contingency plans in case customers arrived in droves.

The Mexico manufacturing plants that are making standard chinos, for example, will be switched over to customized versions if demand warrants. Mr. Bass said he could also offer slower delivery times for the product. One factor putting a brake on order flow will be the Web-only ordering system for the custom chinos. The orders will not be taken by phone — which is the medium used by more than 80 percent of Lands' End customers.

"We could do it," Mr. Bass said. But it could get complicated — particularly if a male customer service representative asked a woman to characterize the proportions of her "seat," to use Lands' End parlance, or disclose her bra size and brand. "It's just a lot easier to start this on the Internet."

 
         
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