King and his IT team set out to relaunch the website, a process that overhauled the e-commerce company on both the front and back ends. The new front-end look for Barnesandnoble.com appeared to follow Amazon.com’s lead with more reviews and fewer clicks between a customer’s order and purchase. King’s team also started to design a distribution and logistics system that would include two new distribution centers in Memphis, Tenn., and Reno, Nev., and cost upward of $75 million. Stephen Riggio points out that this would give the company better order fulfillment capabilities than any rival and five times the selection in books, music and videos of Amazon.com. Barnesandnoble.com now stocks 1 million titles in its distribution centers, up from 100,000 titles four years ago. "We had to build the largest and most expensive supply chain in the industry," Stephen Riggio says. "No one stocks as much or ships as fast as we do."

The online bookseller also fought back against Amazon.com by venturing into new and experimental areas of technology, including digital books (books that are downloaded electronically), wireless ordering and printing on demand (in which shoppers can order out-of-print books). With those innovative ventures, Barnesandnoble .com sought to set itself apart from its larger competitor. Not all have been successful. The company is pushing ahead with e-books and printing on demand, but the wireless project was dropped in April, after Internet-ready cell phones failed to catch on. "We believe completely in the eventual adoption of wireless once the appliance makes sense to humans," King says. "For now, we’re happy to have people just call us and not fool around." (See "Wireless in Manhattan," March 15, 2001.)

King says that Barnesandnoble.com’s ability to launch new projects quickly has allowed the company to bounce back from setbacks such as the wireless initiative. As an example of such speed, he cites an SAP implementation for financials, which he started in August 1999 and finished in January 2000. "When most people think of an SAP implementation, they’re thinking about 12 to 24 months," King says. "The ability to make things happen quickly across a number of initiatives is perhaps our biggest innovation." Large technology investments don’t guarantee online success, however. In order to build customer loyalty and boost conversion rates, which measure the number of visitors who actually make purchases, the dotcom badly needed to market itself through Barnes & Noble stores. For observers of Barnesandnoble.com, one of the most hopeful developments came after the abrupt departure in January 2000 of CEO Jonathan Bulkeley, who had been brought in after Bertelsmann made its investment. Stephen Riggio, who had stepped aside during Bulkeley’s tenure, retook the helm, signaling that the struggling dotcom would be finding new ways to integrate with its powerful parent company.