L.L. Bean and Lands' End: Internet sales impact on apparel markets

Bean and Land's End: The Impact Of Internet Sales

In 1911, when Leon Leonwood Bean grew tired of wet, leaky boots, he experimented with various remedies and came up with the Maine Hunting Shoe, a boot with rubber soles and feet and leather uppers. To sell his new product, he opened a mail-order store, L.L. Bean, in 1912, targeting recreational hunters in Maine identified via a mailing list supplied by Maine's hunting license bureau. Little did Mr. Bean realize or dream that some 90 years later, his famous boots would be selling in Japan via something called the Internet. In 1995, the descendents of Mr. Bean established a web presence for the traditional retail mail order company. Similarly, Lands' End, another traditional catalogue apparel company launched its business on the web in 1995. It is the thesis of this paper that L.L. Bean and Lands' End internet sales have impacted their apparel market. An effort will be made to demonstrate this by examining the sales record, corporate image and customer relationships of both companies since commencing with a web presence.

Sales Record

Little information is available as to L.L. Bean's Internet sales record. Information would suggest that the company's web sales have helped to boost the overall earnings of L.L. Bean (e.g., Petit, 2003); however, no specific information was found to document exact online sales figures. In reviewing the financial record of the company as provided by Hoover's Online (2003), annual sales have increased since 1999 and are as follows:

L.L. Bean Financial Overview

Annual Sales ($ mil.)

1,100.0 (est.)

It is important to note, however, that there is no means of determining whether increases can be attributed to online sales.

As reported by Berbee (1999), Lands' End, released annual Internet sales figures for the first time in 1999. company history, reported sales of $61 million in FY99, up from $18 million the prior year. Similarly, as reported by Odell (2002), in 2001, the company's Internet sales made up about 25% of its U.S. business ($327 million), and 21% of its global sales. In information provided by Berbee, the company credited its threefold sales growth to the successful extension of its direct merchant model to the Web while increasing its capability to attract new customers and better serve existing customers by providing several options for consumers to interact with the company. As well, according to information provide by Berbee, the company's decision to launch its website was based on the consideration that the majority of Lands' End customers owned a personal computer and were twice as likely to live in an online household than the average person. As well, it was indicated that the number of Lands' End customers who have access to the Internet had increased dramatically in the eighteen months prior to the time sales records were released.

Customer Relationships

In order to determine the degree to which L.L. Bean and Lands' End have been successful in further evolving and establishing their traditional catalog and retail store customer base to the online shopping world, one measure have success may be evidence of customer satisfaction in addition to customer purchases. According to Hill (2002), when attempting to determine the degree to which customers are satisfied with an online shopping experience, the best measure of customer satisfaction is the likelihood that a customer will return to the site to shop again. While some have suggested that customer relationships are best understood by examining a group of attributes, including use of email and other channels to connect with the company, the real indicator of customer satisfaction is the degree to which they will make online purchases from the company on a repeat basis. One of the technologies that has been identified as enhancing online customer relationships, as reported by Hill, is personalization. Personalization is believed to increase loyalty, the time people spend on sites, the probability of their spending, and positive word-of-mouth conveyance regarding their shopping experiences. As explained by Hill, other experts have also indicated that when customers are satisfied with their online experiences with a company, it simply means that they believe the company, as the vendor, are doing everything they can to provide them with the service or good or support they need in a particular situation.

When considering L.L. Bean's online success, information provided by Bizrate.com (2003) that was obtained from over 500 customers that had made online purchases from the company suggests that the company has been successful thus far in evolving their customer base. The results of customer reviews are provided in Table 1.

Table 1: L.L. Bean's Customer Ratings

Detailed Store Ratings

9.5 out of 10

Would shop here again

Likelihood to buy again from this store

9.3 out of 10

Overall rating

Overall experience with this purchase

Pre-Ordering Satisfaction

8.9 out of 10

Ease of finding what you are looking for How easily were you able to find the product your were looking for

9.0 out of 10

Selection of products

Types of products available

9.1 out of 10

Clarity of product information

How clear and understandable was the product information

8.0 out of 10

Prices relative to other online merchants

Prices relative to other web sites

8.9 out of 10

Overall look and design of site

Overall look and design of the site

8.2 out of 10

Shipping charges

8.6 out of 10

Variety of shipping options

Desired shipping options were available

9.3 out of 10

Charges stated clearly before order submission

Total purchase amount (including shipping/handling charges) displayed before order submission

Post-Fulfillment Satisfaction

8.7 out of 10

Availability of product you wanted

Product was in stock at time of expected delivery

9.1 out of 10

Order tracking

Ability to track orders until delivered

9.4 out of 10

On-time delivery

Product arrived when expected

9.3 out of 10

Product met expectations

Correct product was delivered and it worked as described/depicted

9.4 out of 10

Customer support

Any post-purchase activity such as: questions, complaints, replacements, and returns

Chart from BizRate.Com

http://bizrate.com/ratings_guide/merchant_detail__cat_id--1,mid--12,rf -- wgg.html.

Similar results were obtained from BizRate.com (2003) for Lands' End customer satisfaction ratings. Over 1000 customer ratings were used in determining the following results found in Table 2.

Table 2: Lands' End Customer Ratings

Detailed Store Ratings

9.3 out of 10

Would shop here again

Likelihood to buy again from this store

9.1 out of 10

Overall rating

Overall experience with this purchase

Pre-Ordering Satisfaction

8.9 out of 10

Ease of finding what you are looking for How easily were you able to find the product your were looking for

8.9 out of 10

Selection of products

Types of products available

9.0 out of 10

Clarity of product information

How clear and understandable was the product information

8.3 out of 10

Prices relative to other online merchants

Prices relative to other web sites

8.9 out of 10

Overall look and design of site

Overall look and design of the site

7.6 out of 10

Shipping charges

8.4 out of 10

Variety of shipping options

Desired shipping options were available

9.2 out of 10

Charges stated clearly before order submission

Total purchase amount (including shipping/handling charges) displayed before order submission

Post-Fulfillment Satisfaction

8.9 out of 10

Availability of product you wanted

Product was in stock at time of expected delivery

9.1 out of 10

Order tracking

Ability to track orders until delivered

9.3 out of 10

On-time delivery

Product arrived when expected

9.2 out of 10

Product met expectations

Correct product was delivered and it worked as described/depicted

9.3 out of 10

Customer support

Any post-purchase activity such as: questions, complaints, replacements, and returns

Chart from BizRate.com http://bizrate.lycos.com/ratings_guide/merchant_detail__mid--29,cat_id -- .html.

Conclusion

The thesis of this paper was that L.L. Bean and Lands' End internet sales have impacted their apparel market. While no information was available regarding the online sales records of L.L. Bean, one can say with some certainty that Lands' End has experienced growth in their apparel market as a consequence of their web presence. As well, information available indicated that both companies have been successful in maintaining their corporate image via the Internet and have strong positive customer satisfaction ratings. Consequently, it would appear that Lands' End has been more successful in the apparel market with the establishment of an Internet presence. It would also appear that L.L. Bean has also been successful; however, lack of sales record information leaves unanswered questions regarding the true impact of their online presence.