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GSI Commerce Delivers Complete e-Commerce Solution to Linens 'n Things
Launches Multichannel Functionality, Integrated Gift Registry for Improved Sales and Operational Efficiency The Challenge As one of the leading, national retailers of home textiles, housewares and decorative home accessories, the mission of Linens 'n Things Inc. is "to exceed the expectations of our guest in every store, every day." The Clifton, N.J.-based chain, which had 2004 revenues of $2.7 billion, strives to reach that goal in over 400 stores in 45 states and four Canadian provinces, and since 2000 . . . on the Internet as well. However, as Linens 'n Things began to grow its online business, the company discovered it would need a better mousetrap if it wanted to keep pace with competitors and grow its e-commerce business to better supplement and complement its physical store footprint. At the time, the company was handling call center operations in-house and fulfilling online orders through several retail stores. Both operations were limited in scale and technical capabilities. As Linens n' Things searched for a more efficient and effective way to manage its online business, it considered several options. It could consolidate all Web operations in-house; but bringing the entire operation in-house would require additional staffing and a significant investment. It could outsource selected functions such as its fulfillment or call center operations; but outsourcing selected functions would add complexity and make managing the entire process more difficult. When Linens 'n Things examined the big picture, the company saw that its core competency was running its brick-and-mortar business. Yes, its e-commerce business was an important and growing part of the enterprise, but like most e-commerce businesses connected to multichannel retailers, was small compared to the chain's brick and mortar sales. Yet to grow its online business and to truly expand into multichannel retailing, an evaluation showed Linens 'n Things would be required to make a significant investment in e-commerce expertise, infrastructure and operations. The risks outweighed the rewards in the equation. What Linens 'n Things needed was an outside partner that was expert in all facets of e-commerce. They needed an e-commerce partner that could supply a comprehensive and scalable e-tailing platform and an economic model that made sense. The GSI Commerce Solution Several factors influenced Linens 'n Things' choice of GSI Commerce as its e-commerce solution provider. First, the GSI Commerce solution was comprehensive. The GSI Commerce platform offered a full range of services, including a Web commerce engine, site administration, site infrastructure and hosting, order management, business intelligence, a supporting infrastructure of fulfillment, drop shipping and customer service as well as a host of partner services, including channel integration, customer relationship management (CRM), online marketing, content and imaging, and creative and usability services. The impact was felt almost immediately as GSI Commerce migrated the retailer's e-commerce site to its platform, and integrated it with the GSI Commerce call center and fulfillment operations. Linens 'n Things' gained order management abilities with a backorder capability and improved order tracking. Prior to implementing a GSI Commerce solution, if a customer ordered an item online that wasn't available in any of the stores designated to handle fulfillment, the retailer was forced to cancel the order, which resulted in lost sales and a less-than-ideal customer experience. The solution was also adaptable. Linens 'n Things liked the look, feel and navigation of its site and wanted to maintain certain features. GSI Commerce accommodated Linens 'n Things request while providing the site with infrastructure improvements that would expand the Web store's capabilities. For example, GSI Commerce included a product page template, which made it simpler for Linens n' Things to change item colors, sizes and images quickly. The solution also enhanced Linens 'n Things' ability to cross-sell and up-sell customers. Before partnering with GSI Commerce, the site did promote "related" items, but the linked information had to be entered manually. GSI Commerce introduced a "those-who-bought, also-bought" feature, which pulled the information dynamically to the customer's screen based on sales data, allowing the chain to entice customers with a wider variety of choices. The most compelling piece of the GSI Commerce solution, and where Linens 'n Things saw the most value, was that GSI Commerce provided a comprehensive, one-stop shop for all Web store functions and operations. "With GSI Commerce, we have everything under one roof," says Kathy Kimple, vice president of guest services and Internet operations for Linens 'n Things. "A single point of contact helps us to be more efficient," says Kimple, "We liked GSI Commerce's business model, but we also liked their breadth of experience and the infrastructure they had built."
As an e-commerce partner of GSI Commerce, Linen 'n Things shares its e-commerce platform with approximately 50 other branded retailing organizations and manufacturers. A mutual benefit is derived from this unique arrangement. As GSI Commerce develops new technologies or value-added features and functions, the innovations are made available across the platform for other partners to implement in support of growing their online businesses. It was from this shared platform that Linens 'n Things received the foundation for its shop online/pickup in store function. And while shop online/pickup in store is more noted for its use by major electronics retailers, Linens 'n Things became the first home specialty retailer to offer the service. "Clearly, we're leveraging the expertise of their organization," says Kimple. "If they enhance check-out or search or suggestive selling, we receive the benefits because that typically runs across all their partners' sites, so we think that's helped our e-commerce business. Additionally, they operate a very clean and organized distribution facility and call center for us. These are two important guest touch points."
Linens 'n Things had two large challenges for GSI Commerce - the integration of a gift registry business into the e-commerce site, and the creation of a multichannel shopping experience that would allow customers to purchase items online and pick them up in store. Linens 'n Things felt both functions would give it a competitive advantage, allowing it to match or surpass its competitors' activities. In-Store Pickup Shop online/pick up in store is an important element of multichannel retailing, but few retailers are providing the service today for their customers. Linens 'n Things is the only retailer among its competitors offering the service. Shop online/pickup in store achieves a number of objectives for Linens 'n Things. For one, it generates incremental sales. Customers often buy additional items when they come into the store to pick up merchandise purchased online. For example, a customer may purchase a gift online, and during the pick-up trip, buy wrapping paper for the gift and an impulse item for themselves. For another, multichannel shopping reinforces Linens 'n Things' positioning as a shopping destination of choice, whether that choice be online store or at a physical retail location. The function effectively blurs the line between channels and promotes customer loyalty to the brand rather than the channel. "We think it's a competitive advantage for us," says Kimple. "GSI Commerce enabled the function in time for the 2004 holiday season, and it continues to pay dividends for our business."
Further extending the multichannel shopping experience, GSI Commerce also helped Linens 'n Things improve its in-store kiosk application, which allows customers to purchase from the Web site while in the store. This feature allows Linens 'n Things to offer customers expanded merchandise choices. For example, the retailer carries the popular KitchenAidŽ Stand Mixer in a limited number of colors at its retail store locations, but offers 20 colors of the appliance online. If an in-store customer requests a color not carried in a store, a store associate can direct the customer to the kiosk and assist that customer in ordering the desired item, which is then shipped to the customer directly from GSI Commerce's fulfillment center. It also allows Linens 'n Things to sell larger items without compromising valuable store stockroom space. The feature not only expands Linens 'n Things' shelf offerings, but it also provides a satisfying experience for customers not familiar with, or who may previously have been uncomfortable shopping online. Gift Registry Prior to partnering with GSI Commerce, Linens 'n Things' online gift registry operated separately from its Web store business. As a result, a customer could not purchase a gift from the online registry and also shop and purchase an item from the online store at the same time. GSI Commerce integrated the gift registry with the e-commerce site, which gave customers a wider variety of purchasing options. The new, integrated gift registry also more frequently updated the data between the retail stores and the Web site databases, which prevented gift buyers from duplicating purchases. "Gift registry is critically important to our company," says Kimple. "We do a healthy gift registry business in the stores, but to be competitive, it's important to have the registry integrated with your online store. This capability builds cross-over business for us, which has been hugely beneficial. It just makes sense that if you're on the site buying a wedding gift, you also should be able to shop for yourself and make a purchase."
The GSI Commerce solution was implemented for Linens 'n Things' over a five-month period from April to September of 2003. It was an aggressive timetable for a very complex site, but it was critical to have the new Web store operating for the fourth quarter, which is traditionally the high-volume shopping season for retailers. "We were under a relatively tight deadline, and GSI Commerce did an outstanding job in getting us from contract to launch in that five-month period," says Kimple.
The Results After one year of partnering with GSI Commerce, the e-commerce business of Linens 'n Things experienced a solid increase in sales from the previous year. In addition, the retailer gained a competitive edge in the online channel and boasted a much-improved shopping experience for both online and in-store customers. Further, in March 2005, Linens 'n Things expanded its online presence by launching a Web store for Canada, again using GSI Commerce's solution. "We feel the results have reflected well on the Linens 'n Things brand," adds Kimple. "GSI Commerce plays a large operational role in our e-commerce business, but they are transparent to our customers. They are always respectful and supportive in providing the flexibility we need to advance the continuity of our brand."
In summary, the new e-commerce partnership produced:
What's Next? Going forward, Linens 'n Things is focused on enhancing and expanding its multichannel retailing capabilities, adding richer content to its site, and expanding its gift personalization services. "To grow our business, we need to ensure that our guests' shopping experience is the best it possibly can be, which means we are always thinking about how we can make the entire experience more seamless, more efficient, more convenient, and yes, even speedier," says Kimple. "And that's what makes this partnership with GSI Commerce unique - they're just as interested as we are in doing the right things to grow our business. We both have skin in the game and that makes for compelling value in the world of online retailing."
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