Collaboration Incentives

When Lands' End launched Landsend.com in 1995, executives weren'tconcerned about going public or buying Super Bowl ads. After all, theDodgeville, Wis., company had 38 years of mail order success under itsbelt, and a business model focused on strong customer service. Thesite had revenues of $218 million in fiscal 2001, or about 16 percentof Lands' End's total revenues of $1.35 billion. But the Web projectwas more of an experiment than a strategic initiative, says Bill Bass,senior vice president of e-commerce. "We didn't bet the farm on a bigdeal with Yahoo, like some companies did," Bass says. "The businessmodel is very important to us. The site's growth was purelyorganic - we got it running, learned as we went and watched what paidoff."

What paid off were noticeable improvements to customer service. Basssays his online team is small (though he declined to say how small).So when he decided to add more features, like personalization and aproduct search engine to the website, he looked for help. "It's hardfor us to both come up with new concepts for the site and do itourselves. We always need outside help," Bass says.

In October 1998, Lands' End partnered with My Virtual Model, aMontreal-based software company whose "virtual modeling" engine gaveLands' End visitors a chance to try on clothes without having to orderthem first. The equity and affiliate marketing partnership isindicative of the company's approach to its online strategy, Basssays. "We saw an opportunity to provide a new service to customers,"he says. "Partnerships are important to any business, but they have tobe based on solid business models." Bass's development team worked inconcert with My Virtual Model's developers to make sure the modelingtechnology was placed conveniently - but not prominently - on the Lands'End site. "At the end of the day, people come to our site to buy ourclothes, not play with our partner's technology," he says.

Creating and nurturing a close relationship with a partner like MyVirtual Model is imperative, Bass says, because such relationships aremore beneficial for customer service. As a result, the company'sonline partners often move in to Lands' End offices for months at atime to ensure good communication.