Sears established inventory rules. "If a product is below two items in a store, we don’t make that available online for immediate pickup," explains Honan. He says that the company had to tweak its inventory thresholds a few times to prevent stores from selling out of an item it indicated was in stock online between the time the customer placed the Web order and the store associate picked it off the shelf.

Within four months of launch, Sears saw a payoff. Customers who shop in stores, online and through the catalog spend three times the amount of money that single-channel customers spend. Today, 30 percent to 40 percent of online sales are picked up in stores, and?surprise!?21 percent of customers who arrange for in-store pickup end up making additional purchases when they get there.

Eddie Bauer Penny-Wise, Pound-Foolish?

Long before it developed a website, Eddie Bauer was accepting catalog returns in its stores. When the Redmond, Wash.-based retailer launched EddieBauer.com in 1996, it was natural to extend that return policy to the Web, says Vice President of E-Commerce McKenzie. "The more we can do to make it easy for customers to do business with us, the better off we’ll be. Maybe they’ll exchange an item when they return it. It’s one of the many ways that tying your channels together and making life easier for customers pays off," she says.

While letting customers return catalog and Web purchases to stores certainly makes life easier for consumers, giving them the option to pick up those orders in stores, which Eddie Bauer doesn’t do, makes them even happier. David Kardesh, CIO of The Spiegel Group in Downers Grove, Ill., which owns Eddie Bauer, says the company has considered the idea of letting Eddie Bauer customers pick up Web orders in its stores but has no immediate plans to do so. "Cost is the issue," he says.

The complexity of such an undertaking is another issue. Kardesh admits that setting up systems and processes for accepting in-store returns of Web and catalog orders is a relatively simple matter and does not require real-time inventory management. Setting up an infrastructure and procedures for letting customers pick up orders in stores, which does require real-time inventory management, is much more difficult.

Ultimately, the reluctance of Eddie Bauer and many other retailers to offer in-store pickup only serves to accentuate the competitive advantage retailers such as Sears and Circuit City are gaining. It will be interesting to see how Sears’s acquisition of Lands’ End affects Eddie Bauer and other apparel retailers whose fashions are similar to Lands’ End’s. Will my father’s Lands’ End wardrobe gradually give way to Eddie Bauer branded apparel due to his animus toward Sears? Or will he remain a loyal Lands’ End customer because Sears’s acquisition provides him with greater flexibility, convenience and even more opportunities to interact with his favorite retailer? Knowing my father, he’ll choose the latter.