During its 22 years as a profitable retail and mail-order business, Camera World honed its expertise in fulfillment, customer service, and supplier relations. Now it's putting that experience to work on the Web as Cameraworld.com.
Editor's introduction:
Sometimes it seems as if the Web has turned the world upside down. In the hype-ridden landscape called "dot-com," it's easy to assume that only the young, the new, the original idea conceived by two kids in their basement will survive. Out with the old.
How untrue that is. The two companies profiled here, Plural in " The Metamorphosis" and Camera World in "When Something Clicks," are hardly start-ups. Their leaders have been running steady, profitable companies for years. They're taking those years of experience managing entrepreneurial brick-and-mortar companies and using every ounce of their knowledge to transform their businesses into winners in the online world. CEO Roy Wetterstrom, never a guy to fear change, is rebirthing his 11-year-old company to take great advantage of the new economy. And Camera World has built on its 22 years of experience fulfilling customers' expectations to transform itself into an E-commerce business.
BRAVE NEW COMPANIES
Over 22 years Camera World Co. honed its expertise in fulfillment, customer service, and supplier relationships. Today, as Cameraworld.com, it can teach Internet start-ups a thing or two about what matters most
It's a sodden, gray pre-Christmas workday in Portland, Oreg., but the jeans-sporting photographers who handle incoming calls at Camera World Co. (a.k.a. Cameraworld.com) are oblivious to the weather. Sitting in their white cubicles, they dispel the clouds with their cheerful "Thanks for calling Cameraworld- dot-com!" They repeat order information and occasionally murmur soothing guidance to Ansel Adams wanna-bes on the other end of the line, who need to know things like the difference between the Hasselblad 203FE Medium Format Chrome single-lens reflex camera and the 202FA model.
In the 20,000-square-foot warehouse behind the front office, 15 workers scurry down long concrete aisles, clutching sales orders fresh off the network printer. To the casual observer, these warehouse folk seem to have X-ray eyes. Quickly scanning the metal racks loaded with thousands of indistinguishable-looking boxes of equipment, they have an uncanny ability to tell a box holding a $10,000 lens from a virtually identical package bearing a $1,000 one. When they locate the box they're after, they place it in a plastic tub; a bar-code check at the packing station ensures that the order is complete. There, a young man nodding to rock music on a boom box pours Styrofoam peanuts into labeled cardboard shipping boxes and then seals the goods with a deft pull and twist of tape.
Camera World's order-fulfillment and delivery systems have stood the company in good stead. During the 1999 holiday season many of the company's stalwart 300,000 customers came back and spent an average of $600 a pop. And thanks largely to the explosion of interest in digital cameras, sales soared last year, growing from $80 million in 1998 to more than $115 million.
Last December the company's Web site handled an average of 25,000 unique users a day, and Web sales rose by 245% over the previous year's figure for the month. (At the same time mail-order business shot up 67%, and sales at the company's downtown Portland store were up 22%.) Some 90% of Web and mail-order shipments left the warehouse within 24 hours. Return rates for Web sales hovered around 4%, paralleling the rate of returns from the store and the mail-order business. "We maintained heavy inventories to ship on time, and it all worked pretty well," says Camera World's new CEO, Terry Strom. "But one thing's for sure: the Internet is raising the standard of performance for any retailer."
No kidding. This past Christmas season, during which shoppers spent an estimated $6 billion online, saw many a Web site disappointing customers. According to a November 1999 report by the New York City Internet research firm Jupiter Communications, 46% of business-to-consumer Web sites took five or more days to respond to a query, never responded, or failed to post an E-mail address on the site for customers' inquiries.
"If we didn't make our goals," says Walt Mulvey, "we couldn't make payroll."
"An awful lot of Web sites don't realize that customer service should be a priority," says Jupiter analyst Cormac Foster. "They focus on customer acquisition but don't spend time on the unsexy stuff, like customer-support infrastructure. Infrastructure doesn't get you headlines, but if you don't have a staff of people to take care of business behind the firewall, you won't get much." Case in point: Toys "R" Us, whose online subsidiary ToysRUs.com (announced with great fanfare in June 1998) found itself suffocating under the rush of online holiday traffic and was unable to fulfill orders on time. The company's back-end infrastructure was built to send truckloads of products to hundreds of stores -- not to ship single orders to millions of consumers.
Don't call Camera World a "click-and-mortar" or an old-fashioned retailer with a Johnny-come-lately Web site. Call it, rather, a dot-com with lots of back-end "not-com" experience. Camera World has long known that the boring stuff -- attention to the fine details of customer service, simple and solid fulfillment processes, and trusted supplier relationships -- is what really matters. Unless you master those three areas well before you put up a Web site, no amount of bells and whistles or transactional and design prowess online will make the Web component of your business successful.
To understand how Cameraworld.com operates, view the company through a wide-angle lens. Founded in 1977 by a Korean-born businessman, Jack Shin, Camera World began as a 4,000-square-foot mom-and-pop shop for shutterbugs in a musty downtown area of Oregon's sprawling, river-straddling city. Shin had come to Portland by way of New Jersey, where for about two years he'd owned a camera store that catered to well-heeled amateur photographers with National Geographic daydreams.
From the moment he began his business until the day he said good-bye to Camera World in 1997, Shin refused to sell the cheap "gray market" goods that many dealers were hawking at the time -- a practice that stood him in excellent stead with his suppliers. ( Gray market refers to goods that are not meant to be sold in the United States and generally are not covered by warranties.) Building on the relationships he'd established in New Jersey, Shin developed close contacts with executives from Fuji, Canon, Nikon, and the other rulers of the photo world. Ultimately, he constructed an intimate universe comprising 15 primary suppliers.
