Lids Focuses on Web Stations for New Revenue Stream

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Hat retailer Lids Corp. plans by mid-September to introduce 125 transaction-enabled Web stations or e-Centers in a quarter of its retail locations.


Under the initiative, the retailer has partnered with DMX, a satellite technology company whose forte is enabling speedy Internet access.


"One of the biggest barriers to adding e-Centers to any retail store is the high-speed Internet access because you've got to run high-speed lines in your stores," said Nancy Babine-Kucinski, president and chief operating officer of Lids, Westwood, MA.


DMX is working to install satellite dishes on the roofs of malls nationwide, with Lids as one of its first clients in those locations. Lids has nearly 400 stores, mostly based in malls -- a key venue for its target market of 12- to 24-year-olds.


Babine-Kucinski said her company would have liked to have had more than 125 e-Centers in place. But it will have to move in tandem with DMX's progression across malls.


Other multichannel retailers experimenting with interactive kiosks or planning to implement them include Borders, Gap, Williams-Sonoma and Best Buy.


Market researcher Computer Economics Inc., Carlsbad, CA, estimated that by year-end there will be 298,000 interactive kiosks installed in stores nationwide and 584,000 installed worldwide. By 2004, the United States will have 785,000 such kiosks; an estimated 1.7 million will exist worldwide.


Lids' e-Center offers access to only its Web site, www.lids.com, and its online partners. This measure seeks to prevent misuse of the stations for random Web surfing by shop visitors not actually interested in Lids merchandise.


Consumers browsing the site on the Web station can shop by sports team hats or style from around 50,000 products. By contrast, Lids' stores stock an average of 5,000 products on their premises. The stores are approximately 600 square feet.


All e-Centers are tied in with the retailer's back-end systems. Once a consumer places an order, the system automatically checks the merchandise's availability. If available, the order is confirmed and sent to the warehouse for download into electronic devices that choose the hat.


Aware that teens cannot have credit cards or may not have access to them, the retailer produced a Lids card. The card serves as a prepaid debit card that can be recharged by paying cash at a Lids store's cash register. It is good both for online and offline Lids purchases.


Lids forecasts initial sales of an estimated 750,000 from combined sales at lids.com and the Web stations.


The Web stations are already installed in 12 Lids stores in Chicago, Los Angeles and small towns near Atlanta and Boston.


"We don't see any cannibalization effect," Babine-Kucinski said. "We train our employees on the Internet. We incentivize them and they get bonused on any orders placed on the store e-Centers."


As with other retailers installing kiosks and Web stations in stores, Lids realizes the Internet has shifted the balance in the consumer's favor. It is now critical to put a virtual warehouse on display for the even more discerning consumer.


"To that end we're putting e-Centers in the store because it gives our customers absolute control of our inventory," Babine-Kucinski said. "And, we believe, that's really the way of the future."
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