November 23, 1998
Portal site for teens sheds some light
onto possible future of Internet commerce
Today's teenagers are growing up wired. That's why, as they grow up, they'll drive the digital economy, buy more products and services, and begin building tomorrow's electronic-commerce solutions.
For a glimpse of that future economy, you need look no further than Alloy Online, a New York-based teen clothing retailer at www.alloyonline.com.
It's an instructive site, because it exhibits some characteristics that will come to dominate Web sites in the next few years. Chief among these are its community features, such as chat rooms.
Alloy Online started as a print catalog in January 1996, and posted a Web catalog with basic commerce features by August. But, according to Alloy CEO Matt Diamond, the print catalog accounted for 98 percent of revenues for the first year or so.
In January 1998, Alloy started adding teen-specific content to its Web site. This content now includes magazine-style articles, trivia contests and other giveaways, horoscopes, a free e-mail service, and chat rooms. There's even a "teen search engine" that lets kids search for teen-specific content. In essence, Diamond told me, they've become a "teen portal."
Since January of this year, Alloy has experienced a tenfold increase in site traffic, and Web commerce sales have increased to three or four times their previous rates -- or more than 10 percent of the company's several million dollars in annual revenues.
One of the reasons that this content strategy has worked so well is that teenagers are, as a group, more Net-savvy than other demographics.
"These kids are growing up online, so it's a viable commerce option for them in a way [that] it isn't for you and me," Diamond says.
Community features such as Java-based chat rooms are especially appealing to this audience. Although many companies have found that chat rooms and message boards increase the amount of time their customers spend at the site, Alloy's customers are especially fond of these features. One reason may simply be the perennial teenage need to connect.
"They like being heard," Diamond says.
Hired help
Alloy Online foreshadows the future of e-commerce in another way: The site is almost completely outsourced. Alloy used the services of Virginia-based OneSoft (www.onesoft.com) to host, design, and launch the new site last January.
This arrangement allows Alloy to concentrate on the marketing and merchandising of its goods, on producing content for its new portal, and on high-level management of the site.
OneSoft's commerce system automatically pipes Web product orders into Alloy's proprietary order-processing system -- the same one used for telephone orders from the print catalog. Phone and Web orders alike are then routed to the company's fulfillment center in Tennessee.
OneSoft's commerce system is readily scalable, according to Jim MacIntyre, OneSoft chairman and CEO, because it's based on Compaq's Distributed Internet Server Architecture, which allows OneSoft to add additional servers as needed. Currently Alloy's site is hosted by three Windows NT servers, and is capable of handling peak loads of as much as 1,500 concurrent users.
Other system elements include Microsoft's Internet Information Server and Transaction Server, running a combination of modular applications developed by OneSoft.
Alloy's decision to outsource its Web development and site hosting prefigures a move that will likely be made by many other e-commerce companies. Unless a company considers site development and hosting to be among its "core competencies" (to use the language of management consultants), it makes sense to let someone else handle these chores.
It's a further boon to Alloy that OneSoft can easily add the community features -- such as a celebrity chat module -- that Alloy's market likes.
Are you planning to outsource your Web site? How important are community features to the market your site serves? Write to me at dylan@infoworld.com.
Dylan Tweney (dylan@infoworld.com)
has been covering the Internet since 1993. He
edits InfoWorld's intranet and Internet-commerce
product reviews.
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Every column since August, 1997
