It’s a Small e-World After All

Dec 01, 2000 10:30 PM  By

A redesigned site welcomes consumers to the wonderful world of DisneyStore.com

It’s mid-September, and dot-com retailers are disappearing faster than you can say “abandoned shopping cart.” But multichannel marketer The Disney Store is relaunching its Website in anticipation of a stellar holiday shopping season.

The redesigned Disney Store, which debuted Sept. 18, aims to provide instant gratification. Visually, the changes from its previous iteration are subtle: improved photo resolution, warmer colors, a slightly different layout, and better merchandising on the home page. Underneath the cosmetic changes, however, is a new foundation: improved technology that shoppers won’t see but that will make the site more appealing to Disney’s demographic target.

This will be DisneyStore.com’s fourth Christmas online, and based on experience, it anticipates a “big season,” says Alan Johnson, senior vice president of e-commerce. He declines to quantify his expectations, but he notes that online sales during Thanksgiving weekend 1999 quadrupled sales of the same weekend in 1998.

Moreover, the site’s average transaction rate last holiday season was 5,000 orders a day, with a peak rate of 25,000 orders on a single day, according to New York-based InterWorld Corp., the company’s server software vendor. On Dec. 4, 1999, the site hosted 700,000 unique users and served more than 10 million page requests.

And in fact, the click-and-mortar marketers such as Disney Store have good reason to feel confident this holiday season. Market research firms have predicted that, despite the dot-com demise, busy shoppers will hit the Web in record numbers between Thanksgiving and New Year’s. Forrester Research projects that 16.6 million U.S. households will browse virtual store shelves during the last five weeks of the year and that online holiday spending will reach $10 billion – double last year’s total.

Pure-plays such as Amazon.com can expect to reap a sizeable share of the total, but 84% percent of the 4,500 respondents to a survey by research firm Greenfield Online said they would visit click-and-mortar sites.

“This is a world of instant gratification,” Disney Store’s Johnson says. “Many shoppers have no time to thumb through a catalog or walk into a store.”

And when it comes to identifying the particulars of its shoppers and prospects, Disney knows of what it speaks. You might think it would be nearly impossible to pinpoint the Disney demographic – after all, the company has worldwide name recognition, and everyone has a favorite Disney character. But the company’s research proves that it’s a small e-world after all.

The parent trap
The typical DisneyStore.com shopper – or “guest,” in Disney parlance – is a 26- to 45-year-old woman in a household with children younger than age six, an annual income of at least $50,000, at least one white-collar breadwinner, a dog or a cat in the residence, and a station wagon or a specialty vehicle in the driveway, Johnson notes.

That dovetails with a key segment of the Internet user population, according to recent research by Media Metrix and Jupiter Communications. Their findings, published in August in the report “It’s a Woman’s World Wide Web,” indicate that women 25-44 years old make up 21.3% of the Internet population. And this significant slice of Internet users has very specific online goals.

“Women’s approach to the Internet tends to be focused on practicality,” the report stated. “They don’t waste much time on a variety of different sites but return to those which save them time or money. Women…increasingly use the Internet to make everyday life easier.”

That’s especially true of the DisneyStore.com shopper, if the company’s research is accurate. Consider that 80% of the site’s users live within 20 miles of one of Disney’s 500 stores; 40% have at some time made a purchase from one of those stores; about 30% of those who have purchased from the Disney catalog have also bought something from the Website. This channel overlap illustrates that the DisneyStore.com devotee is looking to buy gifts on her own time, preferably sitting in front of her PC after the kids have gone to bed or early in the morning before they’ve gotten up, without having to pick up a phone or get in the car.

As if it had an advance copy of the report, Disney revamped its site to address those priorities of practicality, ease of use, and convenience:

* Pages load about 50% faster than they did before, Johnson says, and the site is scaled to accommodate up to 10,000 orders a day, notes Charley Rich, InterWorld’s director of strategy and planning.

* Navigation keys were moved from the left side of the screen to the top, making them easier to find.

* Shoppers can browse the merchandise by favorite character, by catalog item number, or by category, such as clothing, toys, and videos and games. Special buttons prompt holiday-specific shopping: Gifts for Her, Gifts for Kids, Gifts for Him, Trim a Tree.

* The merchandise mix is skewed toward families with young kids, Johnson notes, and of the adult apparel, 70% is for women.

* Money-saving specials are loud and clear on the home page. Above the main merchandise display is an offer of free shipping on all orders of more than $50; another easy-to-spot promo offers coupon codes for 10% off the next holiday purchase to users who spend at least $35 during the current session. And sale products have their own page.

* Shoppers can store various shipping addresses and send different items within a single order to different locations.

* Out-of-stock items are clearly noted – though Johnson says, “It’s very rare that guests place an order and the item isn’t available.” He adds that 93% of orders are shipped within 48 hours and that the company’s incorrect shipping rate is less than 4/10ths of a percent.

* An online chat feature offers shoppers the chance to ask a live customer service representative questions in real time without having to pick up the phone.

The online chat feature, provided by Ask Jeeves Business Solutions and available when users go to their shopping carts, is one of the highlights of the redesign, Johnson says. “You can’t forget that in a store, if customers have a question, there’s a person available to answer,” he explains. “We can’t break that habit online – we have to provide the same sort of interaction, and the only way is through online chat.”

Online chat can both save DisneyStore.com money and generate revenue. The cost of answering customer inquiries via online chat is $7.80 per incident vs. $33.00 per incident by phone, according to a December 1999 Forrester Research report, “Tier Zero Customer Support.”

More important, Johnson predicts that providing a live CSR online at the point of sale will significantly reduce abandoned shopping carts: “It looks as if there’s going to be a very positive financial result in terms of driving the order because customers are less likely to abandon the order if they can get an immediate answer to their question.” (See “The Nightmare Before Christmas,” page s11.) Without giving specifics, he says that in the first 10 days after launching the chat feature, DisneyStore.com saw an increase in the number of completed transactions. “And the number of chats is increasing every day,” Johnson adds.

When you wish upon a star



DisneyStore.com is a flagship commerce component of the North Hollywood, CA-based Disney Internet Group (DIG), formerly known as Go Networks. DIG encompasses the Go.com portal, ESPN.com, ABCNews.com, and Disney.com, among other content and commerce sites, as well as Disney’s print catalog operations. But DIG has yet to turn a profit.

For its fiscal third quarter, ended June 30 (the most recent quarter for which results were available at press time), DIG had a net loss of $52.6 million. But Internet commerce revenue was up 95% from the previous third quarter, to $17.9 million. And for the first nine months of the fiscal year, e-commerce revenue was $56.3 million, up 111% from the comparable period of the previous year.

Sales at DisneyStore.com led the e-commerce revenue growth, according to the company’s earnings release, which adds, “Commerce revenue growth reflected an 89% increase over the prior-year quarter in the average number of orders per month, as well as an increase in average order size across [DIG's] commerce sites.”

Direct marketing (in other words, catalog) revenue, on the other hand, decreased 40% for the third quarter, to $16.9 million, and 20% for the first nine months, to $93.6 million, “resulting from planned reductions in catalog circulation, fewer product offerings, and lower catalog response rates due to changes in the company’s merchandising strategy and customer migration to [DIG's] online business,” the company stated.

With the house file for its 10-year-old print catalog down to 8 million and with only 750 items in the book compared with 2,000-plus available online, DIG is clearly counting on e-commerce for future succcess. So superb customer service and increased convenience at DisneyStore.com will be ever more important.

“It doesn’t matter how people touch our company – they expect quality and innovation,” Johnson says. “It’s no different at the site….At the end of day, when we add up all the revenue from the stores, the catalog, and the site, we have to end up with an incremental revenue increase, or the business model doesn’t work. If revenue doesn’t increase, our incremental costs are just overhead.”


Every fall I say, “This year I’m getting my Christmas shopping done early,” and every December I’m rushing around Manhattan or paying the hefty overnight-shipping fees to get all my gifts at the last minute. This year, I’m determined to change my ways.

So in September, when I saw that DisneyStore.com was offering free shipping on orders of more than $50, I thought I’d give the site a shot. My three-year-old niece, Annabel, adores Winnie-the-Pooh, so I started browsing through the site’s multitude of Pooh items and found the perfect gift: the Pooh Puppet Theater with four plush hand puppets – Pooh, Piglet, Tigger, and Eeyore. Click: Add to shopping cart. I’m such a good aunt!

I also selected some Pooh socks and one of my favorite old Kurt Russell movies, The Computer Wore Tennis Shoes. Hmm, maybe I’ll also get Annabel The Parent Trap. But will she be too confused by the double-trouble scenario? She’s bright, after all, but she is only three.

I review my order. The puppet theater is a drop-ship item that won’t go out for five to six weeks. My other items, which will ship within 48 hours, add up to less than $50. Will I still get free shipping?

Suddenly this early-shopping thing is turning into as big a chore as hopping on the subway. Are the movies age-appropriate? Will I have to pay for shipping? Should I just forget about it, abandon my cart, and make a mental note to try this again later when I have time to pick up the phone and call?

That’s when I see the key to the Magic Kingdom: “Click for Live Help.” Mercy! I obey. I am connected to an efficient and patient CSR named Nicole, who asks, “How may I help you today?”

I type in my question about the free shipping, and I learn that all my shipping will be free. `Great news,’ I reply. “Can I help you with something else?” Nicole types. I figure, why not? I tell her about precocious young Annabel and ask if the Kurt Russell and Hayley Mills flicks are age-appropriate.

“I am unsure,” Nicole replies. She recommends I check them out at my local video store. I explain that my niece lives in another city, so I can’t do a test run. Maybe she could suggest a way I could determine the appropriate age range for the videos?

Nicole comes through, and I’m in for a surprise: She refers me to Amazon.com!

I wonder if Nicole will be taken to task for referring me to a site that may have the same videos for less. But I thank her heartily, return to my shopping cart, open a new window in my browser, and surf over to Amazon. Sure enough, I can browse kids’ videos by age range. There in the three- to six-year-olds category is The Parent Trap, so I reckon both movies will thrill Annabel.

(And even though The Parent Trap is a couple of dollars less at Amazon.com, The Computer Wore Tennis Shoes is a few dollars more.)

I return to my DisneyStore.com shopping cart. How could I not buy now that Nicole had answered all my questions – and in about five minutes? “Submit Order,” and I’m done. It’s Sept. 27, and I’ve got one family member checked off my list. Only 20 more to go.


Several times a week, Jay Holtz makes the commute from his InterWorld office in Irvine, CA, to the Disney Internet Group (DIG) offices in North Hollywood to confer with the site architects and developers for DisneyStore.com. He spends so much time there, in fact, that sometimes it’s hard to distinguish that he’s actually the West Coast regional director for professional services for InterWorld, and not a DIG employee.

“I’m very integrated there in terms of knowing who’s who and how things work,” Holtz says. “I have my own office and e-mail and voice mail. It’s not your typical outside-consultant relationship. It requires quite a bit of commitment because it really is a partnership.”

InterWorld Corp., based in New York, is a provider of sell-side server software for business-to-consumer and business-to-business Websites. Its Commerce Suite lies at the heart of DisneyStore.com’s scalability and performance, merchandising and promos, customer service support, online order tracking, customer address books and wish lists, and integration with Disney’s back-end order-processing systems.

In turn, what Disney knows about merchandising has been key to InterWorld’s product development; many of the features the company devised for DisneyStore.com have been built into the latest release of the Commerce Suite.

“We spent a lot of time working with Disney to capture its domain expertise in merchandising, to try to understand how a software package for e-commerce could best operate and provide as much functionality out of the box as possible,” says Charley Rich, InterWorld’s director of strategy and planning. “They shared their best practices with us, we customized our package for them, and we rolled those into the new version of our product.”

The partnership began in summer 1999, when Disney began prepping for last year’s holiday shopping season. DisneyStore.com rolled through December without a single site crash, took orders with guaranteed Christmas delivery up through Dec. 22, and contributed to a tripling of the collective online revenue generated byDIG’s commerce sites.

Among the Disney best practices that were incorporated into the InterWorld software after the holidays were over, Rich says, were tier discounts, online coupons that can be used on the Web or in a store, buy-X-get-Y promotions, and e-mail reminders notifying customers when they are eligible for discounts. These features are now available in the Commerce Suite’s Merchandising Module, “so a company can pair it with its user interface and launch a promo immediately,” Rich says. Even better, the company doesn’t have to reinvent the wheel each time it wants to post a promo.

Personalized, content-rich e-mails are another feature developed jointly by Disney and InterWorld. Alan Johnson, senior vice president of e-commerce for DisneyStore.com, says that this fall the company had a high conversion rate – which he declines to quantify – from an animated, talking promo e-mailed to the site’s registered users offering discounts on Halloween merchandise. “It did much better on click-throughs than a general e-mail,” Johnson says.

“We knew that working with Disney would benefit everyone,” Rich says. “E-commerce businesses should be focusing on their customer and understanding the demographics, not on building site functionality.”

Holtz is the conduit between InterWorld’s product developers in New York and the DisneyStore.com team in North Hollywood. Disney calls on him to help prioritize requests, perform cost/benefit analysis for new features such as personalization, and provide technical guidance.

“I have a pretty tight relationship with them,” Holtz says. “It’s great to be working with a client that’s leading trends instead of following them.”

Leslie Goff is a New York-based freelance writer whose work has appeared in The New York Times and Computerworld, among other publications.