Buying a computer or airline ticket online is mainly a matter of convenience and price. But a pair of pants?
The typical retailer's response is to murmur a few discouraging words about "touch and feel" -- a redundancy referring to the inability of customers to judge fully the product online. And online clothing sales have done nothing to combat such gloom. While online sales are expected to account for more than one-quarter of the personal computers sold this year and about 13 percent of airline tickets, less than 2 percent of all apparel sales are expected to be completed online, according to Jupiter Media Metrix, an Internet research company. More vexing for e-merchants, perhaps, is that 30 percent of all apparel bought online will be returned, requiring a restocking or liquidation process that can ruin profit margins, according to retailers.
Custom made
But the retailer Lands' End has high hopes for a new service it rolled out last week, enabling customers to buy US$54 chinos that are made just for them. The service represents what could be the biggest customization effort to date for an online apparel retailer and, analysts said, the possible start of a trend within the category.
Users of the feature, which the company calls Lands' End Custom, are asked to type in a handful of measurements -- such as jacket size, weight and height for men, and height, weight and bra size for women -- and also answer general questions about the proportions of their hips and thighs, among other things.
A software system determines a customer's weight distribution from this information and the trouser measurements conforming to it, then sends size specifications over the Internet to a factory in Mexico. The factory is equipped with computerized machines that cut the fabric for each order. Customers receive the pants directly from the factory between two and three weeks later.
According to Bill Bass, senior vice president of e-commerce and international sales for Lands' End, the new system has been in the works since December. "There were a lot of things to be worked out here -- not the least of which was, would the sizing algorithms work?" he said.
Millions of variations
For every women's size 12, Bass said, there are "several million variations" in the cut of the pants. With so many ways to go wrong, then, "we did tests in April and May with about 1,500 of our current chino customers, and a vast majority of them said they would definitely recommend it to a friend."
Beyond the threshold issue of whether the system would work loomed the bigger problem of whether the custom tailoring could be done for a price that would attract customers and leave the company with a comfortable profit margin.
To ensure delivery within three weeks, Lands' End had to strike deals with new manufacturers in Mexico, rather than using its existing chino plants in Asia, Bass said. Aside from the cost of opening two new plants, "It's simply more expensive to manufacture units of one than a thousand," he said. "Fortunately, with the technology we have in the process, those costs have come down."
Bass would not say how much it cost to produce each customized pair of pants, nor would he compare their profit margin to that of the company's non-custom chinos, which sell for US$35 to US$39.
But the profit margin per unit is only part of the equation.
"There's the potential for fairly significant savings, when you talk about not having to carry inventory," Bass said. "If you have too much stuff on hand, you have to get rid of it as overstocks. Not enough, and you disappoint the customers. This changes the economics of the business."
Analysts said the economics of customer satisfaction might also change.
"This should be able to reduce return rates, which would be very attractive," said Chris Merritt, an analyst with Kurt Salmon Associates, a retail consulting firm based in Atlanta. Bass, of Lands' End, would not estimate the company's return rates, but Merritt said about 20 percent of the chinos bought online were returned.
Original spin
In terms of custom-manufacturing apparel, Merritt said the closest cousin to the Lands' End effort was Levi Strauss & Co.'s Original Spin feature for its jeans. In that system, introduced in 1995, customers go to a Levi's store, where a clerk measures them and uses a computer to help configure a pair of pants that are custom made and delivered to the customer's home.
According to Kendra Gourvitz, a Levi Strauss spokeswoman in San Francisco, the Original Spin feature will not be moved online. For one thing, the company does not sell products on its Web site, instead providing product information and referring customers to sites that do sell Levi's products. But more to the point, the Original Spin system relies on face-to-face assistance, Gourvitz said, so "it wouldn't work online."
Coincidentally, a former Levi's executive, Robert Holloway, is the person responsible for the Lands' End customization program. Holloway, who led Levi's brand marketing unit, had the idea for an online customization process shortly after leaving Levi Strauss in 1999, he said. That idea became Archetype Solutions Inc., the company which he now leads.
It was Holloway who brought the idea for customized manufacturing to Bass, of Lands' End, last year. Holloway said he worked with Lands' End to set up the manufacturing process in Mexico and licensed his software to Lands' End in exchange for an undisclosed fee for each custom garment produced. Lands' End also took a small equity stake in Archetype.
Holloway said there were "other major household brands" discussing possible use of his company's system. But such deals must wait until early April, when a six-month exclusivity agreement with Lands' End is up.
Custom shoes
Until then, the only other major retailer with a large-scale online customization system is Nike, which has offered customers the option of configuring their own shoes since November 1999. According to Mark Allen, general manager of the custom shoe program, customers who pay the US$10 to US$15 premium can choose from about 20 different shoe models -- typically for basketball and soccer -- to customize with colors and a name ID.
Beginning next year, Nike plans to offer customized cushioning for certain running shoes as well. "We'd originally targeted just the 14-to-24-year-olds with this," Allen said. By expanding the program to include running shoes, he said, the company is banking that customization has much broader appeal.
Bass, of Lands' End, already plans to expand the customization system next year to include jeans. And while he must prepare himself for the possibility that consumers could greet this new feature with a chorus of yawns, Bass said that he was setting up contingency plans in case customers arrived in droves.
The Mexico manufacturing plants that are making standard chinos, for example, will be switched over to customized versions if demand warrants. Bass said he could also offer slower delivery times for the product. One factor putting a brake on order flow will be the Web-only ordering system for the custom chinos. The orders will not be taken by phone -- which is the medium used by more than 80 percent of Lands' End customers.
"We could do it," Bass said. But it could get complicated -- particularly if a male customer service representative asked a woman to characterize the proportions of her "seat," to use Lands' End parlance, or disclose her bra size and brand. "It's just a lot easier to start this on the Internet."
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