Page 74 - DMGT554_RETAIL_BUYING

Unit 5: Buying for Off-site Retail Operations

Notes
Example: Bluefly.com is a Web site that features designer merchandise at greatly reduced
prices. It features a vast assortment of the latest fashions at rock-bottom prices. Amazon.com, an
enormous retailer of books and CDs, features just about everything in those product lines at
lower than traditional store prices, and is realizing significant sales of fashion merchandise.
Expedia.com is a Web site that enables the shopper to purchase seats on planes typically at a cost
less than they would pay using a travel agent.
While many of these sites are used as the only means for companies to sell their products,
traditional retailers of every size and classification have joined the Internet method of reaching
potential customers.

Example: The Gap, sells its basic products such as khaki pants, on its Web site. Shoppers
can easily make the purchase and have the merchandise sent directly to their homes. The site is
an interactive one in which customer questions may be addressed and immediate responses
given.
Most department stores, chain organizations, and catalog operations that have successfully
entered the Internet to reach broader markets include J. Crew, Eddie Bauer, Levi’s Store, L.L.
Bean, JCPenney, Big and Tall, Brooks Brothers, Disney Store, Jos. A. Bank, Spiegel, and Macy’s.
As with catalogs and home buying networks, the potential consumer market is extremely large,
and competition is significant. People all over the world with Internet access can be presented
with merchandise that they will often be unable to find in stores in their trading areas. Even if
the merchandise is available locally, the prices on the Internet are often better. A case in point
follows.
A report in USA Today tells about a shopper wanting to purchase Portmeirion dinnerware. It was
available in many stores throughout the United States, but the selling price was $150 per place
setting, a price that was too high for the shopper. By searching the Web, beginning with the
word discount, a number of different sites came onto the screen. Ultimately portmeirion.net
appeared, where the dishes were offered at a 50 percent discount! The order was placed with a
guaranteed date of delivery and an assurance that any damaged pieces would be replaced. Both
the retailer and the customer were happy.
As is the case in traditional in-store retailing, merchants are always looking for ways in which
to distinguish their operations from the competition. It might be through advertising, special
events, personalized service, private-label merchandise, or a host of other initiatives. Retailers
who use the Web are also using gimmicks or other means to bring themselves to the attention
of potential customers.

To differentiate themselves from other Web sites, Lands’ End has developed a “personal model”
feature on its Web site that lets women “try on” tailored clothes without ever leaving the
computer. A 3-D silhouette is created after the customer answers a few questions about hair
color, height, and body proportions. Then, in a sort of electronic dressing room, the customer
can outfit the model to see how certain fashions would look.
These two instances show how both the shopper and the Internet retailer can make the most of
buying and selling on the Web.

Given the unlimited customer base that reaches the far corners of the globe, more and more
buyers will be needed to purchase the merchandise to be sold through e-tailing. With relatively
small markets being served by traditional buyer purchases for stores’ inventories, the assortment
of goods is generally restricted. On the other hand, with the limitless trading areas served by
Internet users, buyers are able to purchase much broader assortments in terms of products and

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