Just before Halloween, KB Toys kicked off the fourth quarter in an appropriately
spooky way: It raised eToys from the dead. After KB bought most of the bankrupt
dot com’s assets for $15 million last spring, the 1,300-store chain relaunched
the site in October.
By offering such popular eToys features as a gift registry and sophisticated
search engine, KB hopes to attract previous eToys customers who liked the Web
site but didn’t know it went bust. What’s more, it got a state-of-the-art
warehouse and the right to send promotional e-mail to three million former eToys
customers. At the same time, KB is keeping its own Web site so it can hang on to
its original customers. Now, KB expects to double its online sales this year, to
$80 million. "EToys was a first-class operation," says KB’s CEO
Michael Glazer. "We expect a lot of its customers to show up again."
This Christmas, traditional retailers are taking the lead online, but not all
by themselves. They’re riding on the backs of dot coms–dead and alive.
Blending in assets they bought for peanuts from failed e-tailers is only part of
it. Many others are forming alliances with surviving dot coms that would have
been unthinkable a year ago. After losing $29 million a year online, Borders
Group linked up with rival Amazon.com to handle Borders’ online sales through
a co-branded site–which turned profitable almost instantly after it was
launched in August. Other retailers such as Kmart have outsourced much of their
online inventory and customer service operations to Web fulfillment companies.
To read the full article, click here.