When do you pull the plug?

Federated Department Stores Inc. late last year announced that it would reduce the number of items offered on its Macys.com site and that it would stop selling goods through its Bloomingdales.com site, leaving only the site's online bridal registry and electronic order forms for Bloomingdale's mail-order catalog.

Terry J. Lundgren, president and chief merchandising officer at the Cincinnati-based retail chain, discussed his firm's e-commerce direction with Computerworld at last month's National Retail Federation conference in New York. Excerpts from that interview follow:

Q: You were one of the first traditional retailers to publicly acknowledge that e-commerce may not be the most profitable endeavor.

Absolutely. We're not going to keep just funneling money into something if we don't think it's going to work. We're very clear. We're going to break even in a relatively short period of time on the Macys.com site, and we're very committed to doing that.

Q: If you don't, will you pull the plug on the site?

Yeah, sure. We wouldn't keep any business that was a losing proposition for any long period of time.

Q: Some retailers keep sites as brand and marketing vehicles and aren't insistent that their sites do well.

I believe it has to break even. ... We've already invested a lot more than most people, I think. ... We've invested a lot, and so I think we deserve a return on our investment.

Q: E-commerce represents such a small percentage of a retailer's overall sales. Will that cause you to make more changes?

I think it's important for a company like us to not give up completely on the e-commerce subject, because I think the customers are still shopping this way. Young people are shopping this way. Brides are shopping this way. ... Our kids are on the computers all day long.

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Copyright © 2002 IDG Communications, Inc.

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