Channel Integration: How Circuit City and Sears Built the IT Infrastructure for Buy Online, Pick Up In Store

CIO — My father loves Lands’ End. His entire XL wardrobe consists almost entirely of jackets, sweaters, button-downs, khakis, jeans, polo shirts, shorts and shoes from the venerable Dodgeville, Wis.-based cataloger. He loves Lands’ End’s traditional fashions, customer service and unconditional guarantee?which he tests every few seasons when he returns his loafers, claiming the soles have worn thin.

My father hates Sears, the ancient giant of Hoffman Estates, Ill. He says its snowblowers, washing machines, dryers and dishwashers all break down. And its repairmen never show up on time.

When he learned last May that Sears was buying Lands’ End, my father was not happy. In fact, I haven’t seen him so crestfallen since the New England Patriots lost to the Chicago Bears in Super Bowl XX. He thinks his least favorite mass merchant is going to ruin his favorite apparel retailer. "Sears will milk them and milk them dry," he says.

Whether Dad is right or wrong, whether the acquisition ruins Lands’ End or opens up a new market for it, one thing is clear: Bricks need clicks, clicks need bricks, and Sears has hugely strengthened its Internet presence with its purchase of Lands’ End, both in terms of its highly regarded line of clothing and its equally highly regarded Web technology.

"In today’s retail market, you cannot be a credible national retailer without having a robust website," says Dennis Bowman, senior vice president and CIO of Circuit City based in Richmond, Va., adding that seamless multichannel retailing has become as much of a customer expectation as stores that are clean and well-stocked.

To that end, multichannel retailers will be working furiously during the next five years to integrate their e-commerce sites with their inventory and point-of-sale (POS) systems so that they can accept in-store returns of merchandise bought online and allow customers to buy on the Web and pick up in the store.

Some companies, such as Best Buy, Circuit City, Office Depot and Sears, already do so. Their bricks and clicks are completely integrated. These companies have been the fast movers because they already had an area in their stores for merchandise pickup (usually for big, bulky items like TVs and appliances), and because long before the Web they had systems and processes in place that facilitated the transfer of a sale from one store to another.

Other retailers are partially integrated. Ann Taylor, Bed Bath & Beyond, Eddie Bauer, Linens ’n Things, Macy’s, REI, Target, The Gap and others let customers return but not pick up online-ordered merchandise in stores. But there’s still a host of big-name retailers including J.Crew and Victoria’s Secret that can’t do even that.

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