Seattle expert discusses retailing ‘Anytime, Anywhere’

At the height of the dot-com boom, some Web heads
brashly predicted that e-commerce would soon
replace traditional stores as the preferred forum for
shopping.

By Jake Batsell
Seattle Times business reporter

For some shoppers, that may be the case. But in his
new book "Anytime, Anywhere," (Perseus Publishing,
$27), Seattle retail expert and author Robert Spector
argues that brick-and-mortar stores are as important as
ever, and the Internet joins the mail-order catalog,
store front and telephone as another channel that
retailers must master to satisfy customers.

"Turns out, it’s all one business," Spector writes in his
introduction. "The customer will choose the channel.
The challenge for companies is to deliver a consistent
multichannel customer-service experience."

In the book, Spector profiles 13 companies that, in his
view, excel at providing multichannel customer
service, including Northwest retailers Recreational
Equipment Inc. and Nordstrom.

Q: The premise of your book is that today’s
shoppers demand and expect the same level of attentive customer service across all
channels: physical stores, Web sites, catalogs, telephone orders. Do most retailers favor one
channel over the other these days?

A: It really depends on the company and its level of sophistication. A lot of retailers were afraid to
invest in a Web site as another commercial tool, because they were afraid they were going to take
business away from one of their other channels. But I quote in the book from David Dyer, the chief
executive of Lands’ End, who said, "Cannibalization is good."

Companies are finding that yes, there probably is a little bit of taking business from one channel to
another, but they’re finding that a lot of that has increased business, because you’re being exposed
to that many more people. I just read that J. Crew has announced that their Internet sales have
outpaced their catalog sales. Some of the Internet customers had been catalog customers, but a
lot of it was really increased business. REI is seeing increased sales on REI.com as well.

I say in the book that it’s all one business and the Web site is only a channel, it’s not the business.
In my book Amazon.com: Get Big Fast, I made one fearless prediction — that Amazon would have
some physical form. I didn’t know what form that was going to take. It turns out that their physical
appearance would be partnerships with Toys R Us, Borders, Circuit City and Target. Amazon also
sends out catalogs and advertises in the newspaper. So they had to be more than one channel to
take care of customers, to be in front of the customers. You can be on Yahoo! or AOL, but that’s
only for people on the Net.

Once you’ve established the critical mass, it’s less expensive to process and order on the Internet
than it is by telephone or by catalog. So the longer you’re in it, the more customers you have, the
lower your costs are. And you can find ways to create an interesting Web site and make it a
compelling channel to do business. One of the advantages, I think, for brick-and-mortar companies
is that they already have the infrastructure established. And the catalog companies already had
the distribution centers. They didn’t have to add that. In several cases they had their own
proprietary branch. Lands’ End, Frederick’s of Hollywood — they had an existing customer base,
they had deeper pockets than a pure Internet (company). They come in with all these advantages.
The challenge is, how do you make it all seamless.

Q: Where did the "Anytime, Anywhere" title come from?

A: Wells Fargo, even before the Internet, referred to "anytime, anywhere" banking. I think the
phrase conveys what seamless multichannel service is all about, and other companies that I
interviewed in the book referenced the same thing.

In my research, I saw that they were the pre-eminent Internet bank among brick-and-mortar banking
companies. They’ve been on the Web since 1995 and they really saw the Internet as an essential
part of the future of the bank — from day one, they incorporated the Internet into the entire bank.

Wells Fargo is 150 years old. A lot of the companies that I feature in the book have been around
for a very long time. Nordstrom is 101 years old. But they are flexible enough and far-sighted
enough to know that to stick around, you’ve got to keep on changing, tweaking your approach to
business. And Wells Fargo was multichannel 150 years ago with the stagecoach, and you could
wire funds from across the country or overseas. They were multichannel before the term was
coined.

Q: How does the multichannel, "Anytime, Anywhere" approach apply to the mom-and-pop
retailer?

A: It’s true that a lot of the companies featured (in the book) are very large, but one of my favorites,
The Geek Squad, has 50 employees. And Powell’s Books (based in Portland) is still a small
operation. I think that for the smaller companies, all the things that come with "Anytime,
Anywhere" apply, no matter what size your business is. You can have a Web site. It doesn’t have to
be the fanciest Web site in the world; it could be very basic and I’d rather people have a basic Web
site than spend a lot of money on features they don’t really need. So, assuming that you invest an
affordable amount of money in having a Web site and you have an inviting store and you’ve got
somebody who can answer the telephone in a friendly voice and you have communication among
all your employees, that’s multichannel customer service, and you don’t have to be FedEx or Wells
Fargo to do that.

On a personal level, I am my entire company. I have a Web site and I speak to people on the
phone. I make sure that I give the people who hire me, whether it’s to speak or write an article,
customer service by staying in contact with them, by calling them to say I’m working on a story.
They have to worry about the other guy who they haven’t heard from who also has a story on
deadline. So all of this is very basic. My father and mother had a mom-and-pop store. Not my next
book, but the book after my next book is going to be on mom-and-pop stores. It’s going to be part
memoir, part looking at people doing it today. So all I can say is, everything I talk about in this
book is basic. And then as you get larger, you have more money and you have a more far-reaching
operation, then it gets a little more complicated and little more costly. But the principles are really
the same.

Q: How have brick-and-mortar stores managed to retain their appeal during the era of the
Internet?

A: The people who predicted that the Internet would be the death knell of brick-and-mortar
retailers are the same people who predicted the paperless office and the 30-hour work week.
People like to go out to stores and touch the merchandise and try it on. Even Jeff Bezos, at the
height of the Amazon hysteria, said that Amazon will never replace bookstores. He likes to go to
bookstores and hear the creak of the binding and flip the pages.

The Internet has lowered the cost of communication and increased the flow of information. So
those are the strengths, and there are things that the Internet does better than anything else. But
take REI, who I think does multichannel business better than anyone. Lots of people go to the REI
Web site to check out the technical information on a particular product. So if there are 30 different
kinds of tents with the varying thermal characteristics or features, it’s easier to go to the Web site to
study it, look at it beforehand and then go to the REI store and actually see what it feels like to be
in that tent. That tactile experience that can’t be replaced by the Internet. So, REI has seen how
their customers use that information.

At Powell’s, they were surprised that their customers in Portland were using the Web site. One of
the features that Powell’s added is, let’s say you were looking for "Anytime, Anywhere" … there will
be this little box on screen saying there’s 20 copies at the 12th and Burnside store, 20 copies at the
other stores, etc. So they’ve done that as a service to their customers. So if you want to buy that
book, you know that the store closest to you has a few copies left. You could call up on the phone
and do that, but it would take longer. When information is that easy to get over the Internet, then
that’s the best channel from which to get it.

For example, going to Federal Express to track a package. You can call up Federal Express and do
the same thing. But, at the same time, you can just go to the site and type in the number and
they’ll tell you where it’s been all along the way because everything is bar coded. And, ordering
books, you may as well do it online. You don’t have to smell it, or taste it, or try it on. That’s why
Bezos has got to sell books, because everybody knows what a book is. There are no product
specifications.

Q: What was your filtering process for choosing the companies?

I did a lot of research and looked at companies that I thought were doing well and had good
reputations. I picked FedEx because it was both a business-to-business and business-to-consumer
company. They were dealing in a very easily definable business. Moving a package from here to
there, and how do they use all the channels to facilitate that. Tesco (the British supermarket chain)
is one of the more interesting companies that I have in the book. Unlike Webvan, they didn’t spend
a quarter of billion dollars to put together a warehouse. They do all of the picking of the orders in
the existing stores.

Frederick’s of Hollywood … a lot of people giggle when I talk about that, but here was a brand
that’s been around since the end of World War II. The company’s gone through a re-organization.
They are re-invigorating this brand and they have this advice columnist online called "Ask
Amanda," and there really is an Amanda, she’s an employee. So they’re creating a sense of
community which is one of the things I like people to do. The San Francisco Giants were faced
with a unique challenge. They were about to open a new stadium, and how do you sell season
tickets to a stadium that hasn’t been built yet? So, they used the Web to create a virtual ballpark
and you could go to the Internet to see what your view of the field would be.

I was looking for an eclectic group of companies in a variety of different industries who were doing
multi-channeling in a creative way.

Q: You single out Enron as a business-to-business company that successfully used the
multichannel approach. Any regrets now about including Enron in the book?

A: The downfall of Enron is more of an accounting issue than a customer-service issue. I think that
what Enron was doing was in terms of the premise of this book is very creative. They were creating
markets (on the Internet). I featured two subdivisions, Enron Energy Services, which had many
Fortune 500 companies as clients, and Clickpaper.com, which is commodity pulp-paper newsprint.
If I had to do it all over again, Enron would be gone because they are a distraction to the reader.
But, on the other hand, Bill Bass, the vice president of e-commerce at Lands’ End, said those
segments on Enron were some of the most compelling in the book. Enron is only a very small part
of the book. I feature 12 other companies besides them.

Q: How do the best online retailers resolve the dilemma of giving personalized attention to
customers who may be wary of giving out their personal information?

A: Part of it is by being very judicious in using the information on the customer. And you don’t
constantly barrage them with e-mail. You’re careful on recommendations that you make. And you
have a privacy policy that’s spelled out and prominently featured on your Web site. Everybody —
retailers online, offline — have an enormous amount of information on all of us. So the genie is
out of the bottle as far as that’s concerned. Knowing that, it’s up to the individual company to be
judicious.

Q: What about the challenge of returns for online orders?

A: As Dan Nordstrom (president of Nordstrom.com) said, if somebody bought something from
Nordstrom and they don’t like it and it’s hanging in their closet, it’s a constant reminder. It’s a
negative reminder. So you may as well take it back. The advantages multichannel companies
have is, you could either mail your return back or you could drop it off at one of their
brick-and-mortar shops and exchange it. When Barnes & Noble started their Web site, they started a
separate company. So if a customer bought a book at barnesandnoble.com and wanted to return it
at a Barnes & Noble store they couldn’t do it, Barnes & Noble was not set up for it. Now in the eyes
of the customer, if there’s Barnes & Noble here, there’s Barnes & Noble there, that’s good enough
for me. To get all these systems to talk to each other is not easy. But that’s part of the admission
into the game. You have to be able to do that. You’ve got to take care of the customer anytime,
anywhere.

Q: Do Northwest companies place more emphasis on customer service?

I think Seattle is the customer-service capital of the United States. It didn’t just start with Nordstrom.
I looked at Frederick & Nelson’s corporate history. They really had an enormous impact on this city
as it grew up.

The best customer-service story I ever heard, bar none, came from Frederick & Nelson. I
interviewed William Street, who had been the CEO of Frederick & Nelson from 1937 to 1962. He
was in his late 80s when I interviewed him. Next to D.E. Frederick, he was the most important guy
in the history of that company.

He told me this story, which happened sometime after World War II: A customer of Frederick &
Nelson had gone to visit her relatives in Ireland. It was a once-in-a-lifetime trip for her. She took
pictures of her relatives and came back and went to Frederick & Nelson to have the film processed.
Back then they did that. They didn’t process it themselves, they sent it out to be processed. Well,
the film was lost. So, this woman, Mrs. O’Shaughnessy, calls up Mr. Street crying, tells him what
happened, and he said, tell me where your relatives were living and their address in Ireland, which
she did. He hired a photographer based in London working for Women’s Wear Daily, sent him to
Ireland to take pictures of her cousins. Now that’s customer service.

I did the last published interview with Eddie Bauer himself in 1983. He died about a year later. I
asked him what his proudest achievement was, and he said it was his unconditional money-back
guarantee. So Nordstrom carried on that tradition. It was a reflection. There was customer service
in Seattle before Nordstrom, but Nordstrom was the one that exported it to the rest of the country;
that Seattle ethic and service.

You see it in Costco. When I interviewed (Costco chairman) Jeff Brotman, we talked about
customer service. Their customer service is that we’ve edited the selection for you, and we’ve given
you the absolute best price. They’ve got the Costco hot dog, which is so popular. People are
friendly and they have what you need. That’s their customer service.

When I interviewed (Starbucks chairman) Howard Schultz, we were on the subject of mom-and-pop
stores, and he remembered growing up in Brooklyn and going to the butcher with his mother and
(the butcher) would say, "Mrs. Schultz, we’ve got this leg of lamb here." What Howard Schultz has
done with Starbucks is take that concept and replicate it 5,000 times. There’s Starbucks all over the
country, and it’s a consistent experience. The people are friendly, they know the product. You
could name several other companies.

For some reason — I don’t know why, I’m not from here — there is an importance placed on
customer service and being nice. Nordstrom is just part of the tradition. I wish I had an answer for
that thesis, but there it is.

Jake Batsell can be reached at 206-464-2718 or [email protected].

Copyright © 2002 The Seattle Times Company