Restructuring - Bricks-and-mortar To Clicks-and-mortar

Many traditional brick-and-mortar enterprises have adopted—or are in the process of adopting—an e-business strategy that will transform them into a click-and-mortar entity. Whether simply creating a company World Wide Web site or developing a plan to provide products and services via the Internet, an enterprise entering the e-business world is faced with changing business models. Adapting to new technology, integrating the new e-business strategy into current operations, and handling new customer relationships, can all result in the restructuring of company operations. According to a May 2000 Software Magazine article, for established companies, "e-business is a new and very different challenge. It cuts to the core of their operations and threatens to disrupt their currently successful and carefully crafted business models."

Office Depot, General Mills Inc., and Victoria's Secret are examples of traditional enterprises that restructured operations as part of e-business initiatives. Office Depot's online business, developed in 1996, has recorded profits each year. Under the leadership of Monica Luechtefeld, the company has become the second largest e-tailer behind Amazon.com with online sales in 2000 reaching $850 million. The firm integrated its Web and store operations, allowing customers to purchase items online and either have them delivered or have them packaged and available for pickup at customer service centers in nearby stores. The Office Depot Web site also allows customers to check inventory at each of its stores. By restructuring both its inventory and distribution operations, adding additional warehouse space and trucks, the firm was able to offer its online customers over twice as many products on the Web than it could stock in its retail locations. The firm also restructured customer service operations at the retail level, which enabled store employees to handle increased business from online customers.

General Mills Inc. also restructured certain aspects of its traditional business as part of its Internet strategy. In the past, the firm conducted its market research by sending its researchers out into the field. In 2001, nearly 60 percent of the company's research was done online. The firm also revamped its purchasing and trucking operations by using Transora, a business-to-business electronic marketplace, to make many of its purchases. It shared trucking services through an online network in order to cut shipping costs. In a joint venture with a California-based research firm, General Mills also began selling market research services via the Web to consumer packaged-goods companies, securing such customers as Nestle and PepsiCo.

Victoria's Secret, a subsidiary of Intimate Brands, was restructured internally when a new division, VictoriasSecret.com, was created as an e-business segment of the firm. The company's marketing and distribution channels were also revamped as part of its push to gain an Internet presence. In 1999, Victoria's Secret offered the industry's first live streaming media fashion show, which logged over 500 million hits in ten weeks. The firm's customer tracking system was also updated to allow the company to record an individual's purchasing history. By integrating its catalog, Web site, and retail outlets, its Web operations secured profits in 2000.