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An Online Success for Lands' End

By BOB TEDESCHI

WHEN Lands' End started selling custom-made pants on its Web site last October, even analysts who follow the business closely had trouble predicting the outcome, since no major merchant had tried anything like it.

Now, after nearly a year of online tailoring, Lands' End has released results that exceed the expectations of even the most optimistic executives. Bill Bass, who led the Lands' End Custom effort and is senior vice president of e-commerce and international sales, said 40 percent of all chino and jeans sales on the company's Web site were now custom orders.

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"When we went into this, we estimated it would be 10 percent," Mr. Bass said. "But our prices are pretty competitive with off-the-rack stuff, and we made it easy for people."

Lands' End, which is owned by Sears, Roebuck, achieved such sales with no advertising, Mr. Bass said, other than some mentions in the Lands' End catalog, which is mailed throughout the year to tens of millions of households. "It's been a lot of word of mouth," he said.

With the custom-made pants service, shoppers go to the company's Web site, www.landsend.com, and type in measurements like weight and height, and characterize the proportions of thighs and hips, among other variables. A computer program analyzes that information, calculates the ideal dimensions of the pants, and sends that information to a manufacturing plant in Mexico.

A computerized cutting machine creates the fabric pattern, and the pants are sewn and shipped to customers two to four weeks later, depending on the volume of orders. The price is about $55, plus $6 for shipping.

Analysts whom Mr. Bass has briefed on the sales results so far say they are impressed. "It just blows me away," said Ken Cassar, an online retail analyst for Jupiter Research. Mr. Cassar said that such results helped validate the idea that the Internet is "uniquely capable of allowing mass customization."

"If you look at Dell Computer as an example, there are a lot of decisions a consumer has to make — hardware, monitor, printer and so forth," he said. "It's a lengthy process that doesn't work efficiently in bricks-and-mortar, and while it works over the phone, it's not as efficient as the Web."

Mr. Cassar said that the large share of pants sales coming from custom orders was good news for Lands' End. Even though the company earns the same percentage of gross profit on custom and off-the-rack sales, he said, the custom-made products carry a higher price and so yield more money.

The custom service also helps Lands' End to reduce the amount of unwanted merchandise in its warehouse at the end of the season, which reduces carrying costs and increases the average profit margin per item, because fewer clothes are sold at clearance prices.

In theory, custom-made clothes should also yield fewer returns. So far, though, custom pants have actually been returned at about the same rate as ready-made sizes. That may be partly because Lands' End sent e-mails to each of the tens of thousands of people who bought the custom pants, seeking their feedback on fit.

If respondents said the fit was only fair or worse, Lands' End asked customers to return the pants at the company's cost, refunded their money and offered a discount on the second pair they ordered. While that effort was consistent with the company's guarantee, Mr. Bass said it also helped Lands' End improve the software that creates the custom pants.

Now that the software is getting better at finding the right fit the first time, Mr. Bass said, return rates should go down.

What is more, he said, once a customer finds the right fit, "they'll typically buy every color in those jeans or chinos or whatever."

So why have none of the competitors of Lands' End rolled out similar efforts? The company that has helped Lands' End create this program, Archetype Solutions, said other well-known merchants would make such announcements later this year or early next year. (Of course, Archetype executives said last fall to expect such announcements by last spring, when Archetype's exclusive agreement with Lands' End expired.)

"There's a ton of work that has to be done for each customer before we can launch," said Jeff Luhnow, president of Archetype Solutions. "A lot goes into getting to know each customer's brand, and how best to customize with them."

At least one regional retailer plans to introduce a custom-clothing service with Archetype soon. Executives of Bob's Stores, a casual-clothing merchant in the Northeast, said last week that the company would offer custom-made jeans and chinos on its Web site beginning in early October. The company will also test a version of the program in some of its 35 stores.

David B. Farrell, chief executive of Bob's Stores, said his company started working with Archetype four months ago and had made a "significant investment in people and technology to bring this to fruition."

The Internet component of the program at Bob's Stores will be similar to that of Lands' End, while the in-store component will feature an Internet kiosk in both the men's and women's fitting rooms. Mr. Farrell said salespeople would help measure customers if they could not remember their basic clothing measurements, but otherwise he expected most orders to be self-service.

Selling at $47 including shipping, the jeans and chinos will be priced slightly higher than most of the pants in Bob's Stores. And while the same manufacturing plant that started Lands' End down the custom path will also make pants for Bob's, Mr. Farrell said his company would use different fabrics and colors for his customers.

Among others who will be closely watching Mr. Farrell's in-store initiative is Mr. Bass, of Lands' End, since his company's relationship with Sears makes it an obvious candidate to test a similar in-store program.

For the moment, though, Lands' End is occupied with expanding its custom service into shirts, as well as pants made of additional kinds of fabrics, later this year. For those programs, two Lands' End factories in Central America were updated with special cutting machines and other technology.

As other online retailers try to play catch up, Mr. Bass can take some satisfaction that the formerly ballyhooed — and subsequently much-debunked — theory of first-mover advantage may have actually paid off for at least one Internet property: LandsEnd.com.




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More than 40 percent of the chinos and jeans sold on the Lands' End Web site are custom made. The company initially predicted that the service would represent 10 percent of sales.


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