Gearing up for Christmas, both Nordstrom (JWN) and Walt Disney are launching major e-commerce efforts that the press greeted with a mixture of straight-faced reporting and amusement.
The Wall Street Journal trumpeted news that upscale retailer Nordstrom was moving ahead in its effort to become the nation's leader in "fashion related e-commerce." Nordstrom has sidled up to star-maker VC firm Benchmark Capital, which is investing $15 million in the effort, with another $1 million coming from Madrona Investment Group. Nordstrom will kick in $10 million in cash, plus its existing Net operations and catalog efforts. Looking to pry open more sales channels, Nordstrom launched its own Web site 10 months ago, but it lags behind rivals such as Macy's.
Nordstrom's claim that it will eventually offer 20 million pairs of shoes online apparently raised no eyebrows at the Journal. Why shoes? Nordstrom's backyard paper, the Seattle Post-Intelligencer, reported that the 100-store chain built its national reputation on shoes, and now offers 150,000 pairs in its larger stores, according to reporters Bill Virgin and John Cook. Although selling shoes online seems a tough fit, given the inconsistent sizing, Nordstrom believes its experience and reputation with customers, including its return policies, will give it an advantage. The Los Angeles Times' Abigail Goldman reported that shoes are the biggest sellers on Nordstrom's current Web site, accounting for 30 percent of the chain's online sales. Nordstrom, for one, is proud of its shoe fetish. "If we were to go out there and scream: 'We are Nordstrom's Online,' we'd be just like everyone online," Bob Schwartz, VP and general manager of Nordstrom.com told Wired News' Joanna Glasner. "We want to go out there and scream: 'Nordstrom.com: Building the world's biggest shoe store.'"
While Reuters filed a colorless report, ZDNet's Michael Fitzgerald and Margaret Kane got into the spirit of things, slipping in the obligatory Imelda joke by the second graf. Fitzgerald and Kane went beyond the Nordstrom story to pull in a trend towards bigger-ticket items migrating to the online world. Maybe they brought this up just so they could drop the names Boo.com and Foofoo.com.
Benchmark has bankrolled Net stars such as eBay (EBAY) and Red Hat, but so far has tread carefully into retail. Earlier this month it ended plans to take a minority position in Toysrus.com over a tussle over how its ownership stake would be handled, according to the Journal's James Miller.
While Benchmark was pulling out of toys, Walt Disney was jumping in. It plans to announce an investment in Toysmart.com thought to be $45 million according to the Journal's Bruce Orwall and Joseph Pereira, and pegged at a 60 percent stake by the New York Times' Bob Tedeschi. Disney will leave control of the site to Toysmart, including decisions on which toys to sell on the educational-play-only site, the Times' scribe reported.
Nordstrom to Start Web Unit With Cash From Two Venture-Capital Concerns http://interactive.wsj.com/articles/SB935534642492166555.htm [Registration required.]
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