Online Showrooms' Appeal Increases Since 9/11
As the fashion industry remains in a recovery mode following the Sept. 11 terrorist attacks, the idea of conducting business online is becoming more appealing to some retailers, especially those reluctant to travel.
With that in mind, enter online showrooms. Companies including 7thOnline, QRS/Tradeweave and readytoview.com are among those appealing to the industry to hit the Net rather than travel for their market planning. As a result of the attacks, these companies’ concepts are getting second looks following a series of failures by other companies.
Even before Sept. 11, online showroom exchanges were picking up steam. As previously reported in California Apparel News, MAGIC International recently aligned with QRS Corp. and its Tradeweave technology for an online showroom venture that will give retailers year-round access to lines.
More recently, 7thOnline secured its latest round of financing. Readytoview.com, based in the California Mart, is a local launch targeting showrooms in the Cal Mart, New Mart and other apparel centers to put their lines on the Web for 24/7 access for their accounts.
7thOnline Makes a Challenge
While this end of the B2B market has taken its hits, the online showroom picture is being shaped by two major players: 7thOnline and QRS.
New York-based 7thOnline is the newcomer that is making a big play for the industry’s heavy hitters. The company, which aims to go head to head with QRS, recently enlisted retail veteran Louise Chazen to become its president. Chazen, a former Victoria’s Secret merchandising vice president, is backed by a board of directors that features a who’s who of retail, including chairman Chaim Edelstein, a former chief executive officer of A&S, along with Barneys CEO Howard Socol, Richard Marcus of Neiman Marcus and John Burden of Federated. The company also struck a partnership with GE Global Exchange Services to help integrate its operations.
7thOnline’s concept is similar to that of QRS/Tradeweave, although it’s more Web-oriented rather than EDI (electronic data interchange)-based.
The concept allows pre-approved retail buyers to log on and immediately access hundreds of SKUs from a variety of vendors for free. The site contains a number of tools, including an e-notebook that allows users to create assortment plans, budget and place and track orders. The e-showrooms offer buyers true color viewing of samples and swatches. There is a learning curve, which 7thOnline helps with through round-the-clock customer service.
Vendors pay a fee to host their showrooms. Benefits include more market exposure, the ability to target specific user groups and cost savings through the ability to create online catalogs and line sheets at the click of a mouse. Among the companies online with 7thOnline are Fashion Active Laboratory and Ocean Pacific. 7thOnline executives are hoping the GE deal and a recent deal with Saks and its Parisians retail unit will lure others.
“The way to succeed is through partnerships with the key players,” said Margaret Tjan, vice president of business development. “You can’t attack the market one by one expecting the buyers to come.”
The deal with GE is aimed directly at luring bigger players on board since GE is the retail technology platform used by Nordstrom, J.C. Penney, Target, Kmart, Marshall Fields and others. Working with Saks could also be a huge shot in the arm for the company, Tjan said.
The hope is for a snowball effect that will make the company viable. The plan is to be profitable in 2002. With 10,000 vendors in the marketplace, Tjan said there’s plenty of room to co-exist with QRS/Tradeweave. And with venture capital dried up, new launches will be few and far between, she said.
Additionally, vendors are reexamining ventures like 7thOnline and QRS/Tradeweave as they are finding they don’t always have the resources to do their own B2B ventures. Plus, they are looking at third parties to service the leagues of specialty accounts that slip through the cracks.
“We see this potentially cutting travel for buyers from five to 10 trips [to market] a year to two to five trips a year,” said Tjan. “It will be especially beneficial to those smaller retailers who don’t have the resources to do all that traveling and can help those smaller vendors looking for more exposure.”
As 7thOnline gears up for growth, Richmond, Calif.-based QRS is also making strategic moves. The company recently appointed Elizabeth Fetter as its new president and CEO replacing John Simon, who will remain as executive vice president of business development.
Fetter, who has 20 years of experience in various information services and telecommunications capacities, said she plans to focus on “strategy, operations and execution.” She helped her former employer, NorthPoint Communications, become the fastest-growing DSL-based broadband service provider. Among her duties will be strengthening the company’s alliance with MAGIC and magiconline.com.
