Benetton Puts $15 Million Into First E-Commerce Site

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MILAN, Italy -- Benetton cast a cautious toe into the waters of the Internet in September with a $15 million investment in an e-commerce Web site, the first on which customers can buy products. Ten others are information-only sites.


The site, theex.it, allows buyers in the UK, Germany and Italy to purchase an array of Benetton and Sisley women's and men's wear, underwear and accessories; and products from Playlife, the Benetton sportswear brand and official Sydney 2000 Olympic clothing -- all with free delivery.


By the end of 2001, product choice will be expanded to include sports equipment from other Benetton group brands -- Nordica, Rollerblade, Killer Loop and Prince -- for Europe only. Regular Benetton brands will be available online in the US and Japan next year.


United Web, an 80-20 joint venture between Benetton and Andersen Consulting, will manage theex.it. It is also looking for other partner brands to support the site.


"The idea is to go beyond Benetton," said spokesman Frederico Sator, "and attract leading brands both from a capital and content point of view -- brands related to film, music, entertainment and information. We don't want brands that compete with us in apparel, however."


Sator said the company expects to spend more than the original $15 million, but added, "We want to be realistic. We're not thinking that much about selling. It's more a matter of gaining experience in a medium where you must have a presence.


"Maybe in five years everybody will buy on the Web, but we just don't know. So we're looking for practical experience. We'll invest in this new channel and test it. But we don't want to dream too much about how many people we will attract to our site.


"We believe that buying in Benetton shops will be the future for our sector of the business for a long time to come. We are being very prudent. I am a fan of Amazon and I've bought a lot of books from them. From the customer's point of view it is perfect.


"But from the shareholders' point of view and from the bottom line, I'm not convinced the Web will make money. Buying clothes on the Web must still be proved out. Style, color and size matter. Touch is important, so is the fit of a garment. These are all things we have to evaluate."


In the meantime, Benetton is engaging in a modest advertising and PR campaign to draw customers to theex.it. "We use banners and links on our own Web site and on Yahoo. We're also doing traditional print advertising, but not TV."


The company has used fashion shows in which the latest Benetton clothing is presented to push the site before an audience of invited fashion journalists. "In Paris we had 150 journalists attend our show and we told them about the Web site. That's interesting for fashion reporters."


Benetton expects a French site to open before the end of the year with Spain and other countries following soon after. Much will depend on logistics. The company has hired TNT, the Dutch-owned courier, to look after that.


TNT has been given a two-year contract and will distribute goods ordered online from a central warehouse in Maarssen, the Netherlands, where thousands of items will be stored. Up to 20 staff members will handle the orders.


Andersen Consulting is the technical provider, Sator said. "They helped us develop the site with Blue Martini, who gave us the soft platform we needed.


"Andersen knows a lot about e-commerce and how to build a business plan for it. We have one ready but won't make it public quite yet."
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