Ames cautiously expands on line with limited-sku commerce site - Brief Article

DSN Retailing Today, Nov 20, 2000 by Mike Duff

Second shot at on-line sales promises more than first

ROCKY HILL, CONN. -- Ames launched its second-generation e-commerce site earlier this month, and even if it's currently a little light on merchandise, it is a sure indication that the retailer intends to expand its on-line efforts in key categories.

Much of what is presently on the site is gift-oriented merchandise for the holidays, but the company reports that the site will continue to evolve, with more skus being added.

Ames' approach to e-commerce has been deliberate. In the early stages of Internet retailing, Ames tested a commerce-compatible site that focused on music, but executives didn't like the results and decided to re-evaluate its strategy toward on-line retailing.

In April, Ames launched an e-commerce subsidiary headed by Rolando de Aguiar, who was named its president, in addition to his responsibilities as senior executive vp and cfo of Ames Department Stores. The current e-commerce site, AmesPlace.com, was launched on Nov. 2. with electronics, automotives, pet supplies, small appliances, stationery, toys, hardware and cosmetics/fragrances as the categories offered, and with a little more than 70 items total. Small appliances is the largest category with about 40 skus.

In coming months, a home component will be added to the site; perhaps in the near future, the company reported, apparel will be added.

De Aguiar said that Ames' e-commerce operations will focus for the short-term on goods that expand the company's presence in key categories--beyond what is available in the store. Ames has been going through a rough patch of late, but that shouldn't affect e-commerce, he insisted. "Our direct investment has been minimal. We have minimal skus right now, and 80% of our merchandise is handled on a consignment basis," he said.

As is the case with other discounters, Ames' exploration of Internet profit possibilities is still somewhat tentative. However, seniors and women ages 18 to 35 are among those groups who are getting on line in record numbers these days, and are being targeted by the retailer. Ames has made the operational commitment to get on line, and is likely to be among those that move cautiously as the market develops.