boo.com - Ridicule is nothing to be scared of.

gone in a matter of months from being a big tease - generating tons of

publicity with the promise of street-cred sports gear with style over the

internet - to being the industry’s biggest joke when it finally arrived.

And it can really have few complaints about this.

Quite apart from going live a stonking five months late (on 3 November

last year), it launched with loads of bugs and was - and still is for some

net users - painfully slow and creaky. When it launched, Mac users

couldn’t even access the site. What made this performance even more

galling was the fact that boo.com’s publicity machine had been peddling

the line that the delay was caused by them wanting the site to be perfect

at launch.

And if this wasn’t enough, its image has just been dealt further blows by

launching a 40 per cent off end-of-season sale it said it would never

have, and axing 20 staff from the site’s lifestyle magazine Boom. Suffice

to say, the company has a few bridges to build with pundits and punters

alike. Unless you’re one of its employees, sticking up for boo.com has

become a bit of a social taboo.

Nonetheless, the level of ridicule the company has received can sometimes

seem a bit out of proportion. After all, the slagging off the company

receives takes up a lot of column inches - which is curious, if the

company really is so wholly unimpressive. Sure, much of it is a backlash

against the pre-launch hype, but there must be an element of envy at

managing to raise several tens of millions of pounds in venture capital.

And, just possibly, a sneaking admiration for what boo.com has tried to

do.

For boo.com has tried to achieve what no other dotcom or bricks-and-mortar

retailer has dared to attempt - bringing the emotional experience of

shopping onto the internet. Up until now, this fledgling industry seems to

have taken for granted that online shopping is a hit-and-run, in-and-out

experience.

People don’t shop online to cultivate tastes or be inspired. Impulse

purchases remain the dominion of the high street, whereas online shoppers

generally know what they want, and they go and get the cheapest deal they

can find.

E-tailers that service these desires are what boo.com’s chief development

officer Luke Alvarez calls ”mass-market, functional brands” such as Amazon

and eBay. ”They are essentially mass-market, in that they target everybody

who might buy something on the internet,” he says.

By contrast, boo.com has deliberately set out to challenge conventional

web wisdom and do something very different. Selling clothes online using

flat, two-dimensional displays was never going to be a killer marketing

proposition, so boo.com is entirely a 3-D virtual experience. Most of the

site’s technical glitches are down to its very rich use of technology -

iPix, Shockwave and the like. Pop-up windows enable shoppers to spin any

of the garments 3600 and zoom in (although not simultaneously), and dress

a mannequin in the clothes to see what the whole outfit looks like.

Each product has been photographed from 25 different angles in what has

been the world’s largest ever 3-D digital imaging project.

Clearly, this might not appeal to everyone. ”Our target audience is not a

demographic. It’s a psycho-graphic, it’s an attitude,” says Alvarez.

”That attitude reflects someone who is interested in style and sports, is

relatively cosmopolitan, cares about the products and how they look, and

is probably urban or wannabe urban in outlook. But there is clearly a core

demographic which happens to correspond to this, and that is 18

to 35-year-olds of both sexes.” It is aimed at townies and country folk

alike, since the web, as Alvarez says, ”cuts down the dispersion times of

how fast fashion spreads from urban to rural settings”.

The company’s offline adverts, the work of agency BMP DDB, certainly put

the emphasis on wannabe. To mark the site’s eventual launch, TV ads shot

by Roman Coppola, using a handheld camera, featured a bunch of

unattractive nerds wearing boo.com merchandise. The ads showed them

running around a city plaza, descending into a subway and playing

basketball badly. There was also a press and poster campaign showing a

jogger being sick in a litter bin.

”The ads were meant to be funny and subversive of the way sportswear and

fashion is normally promoted, which is in a supremely athletic, beautiful

way,” explains Alvarez. ”If people went away from the ads with just the

awareness and the emotional sense, but not even a clear idea of what

exactly boo.com was, then that’s fine.” Awareness-raising offline

campaigns made up 90 per cent of the company’s ad budget last year.

Alvarez says that this will even out this year as it does more and more

online call-to-action marketing through banners and affiliate

programmes.

Attitude and emotion aside, boo.com is a global pioneer by launching in 18

countries simultaneously, with seven different language versions of the

site, including US English. The famous online shopping assistant Miss Boo

is tailored to each country, the British version being rather saucy. When

visitors click onto one jacket, she quips: ”I like my fleece like my men,

easy to remove when desired.”

’Boo.com’, incidentally, means nothing in 50 countries, so it was deemed

appropriate for the job. But selling to numerous countries has presented

headaches due to local trading laws and cultural differences - in

Portugal, for example, VAT receipts have to be sequentially numbered. With

one big European distribution centre in Cologne in Germany processing all

European orders, (the other warehouse being in Louisville, Kentucky), this

complicated matters.

In addition, Swedish and German customers require an invoice after

shipment of goods, since very few own credit cards. Curiously, the Germans

have so far been the biggest users of boo.com’s free returns policy. ”The

returns rate in Germany has been three times that of other countries,

because they do things like buy four pairs of shoes in increasing sizes

and send back those that don’t fit,” explains Alvarez. ”The Germans are

very good catalogue shoppers and are very used to the returns process,

whereas here it’s a pretty niche activity.”

All the sites are centrally managed from a single cluster of machines in

London’s Canary Wharf, with a fibre optic cable running through the

Atlantic to serve the US. Bandwidth-hungry, static assets - such as

graphics that don’t often change - are held on servers more local to the

user.

”We have one central database that is more expensive and more complex to

develop than a single database in each country would be. But I only have

to build it once and then I have something which has multi-country logic

built into it from the ground up. I can get into a new country in six

weeks,” enthuses Alvarez. He says that the eventual set-up costs of

building separate databases for each country would be much higher.

Alvarez puts the now legendary delay of boo.com’s launch down to two main

things: underestimating the complexity of launching in multiple countries

and failing to integrate the various teams early on. Regarding the former,

it took the company a month just to collate customs and duty in all the

countries it wanted to trade in. And as an example of boo.com’s lack of

integration, its 3-D imaging facility in Los Angeles shot 25 images of a

woman’s shoe, which was then post-produced, assembled and programmed into

the database. It was only then that it realised the images were scarlet,

whereas the actual shoe was burgundy. ”If I were an ordinary retailer, I’d

just put it on the shelves because what you see is what you get. But I

can’t sell that online, because I’m presenting customers with the wrong

image,” says Alvarez.

To combat such mishaps, a team was set up that ”held the entire business

in their heads and made sure every little bit was synchronised”, headed by

Alvarez. Having joined the company himself in January, he reveals that a

detailed action plan began in July, at which point the company knew it

wouldn’t be ready until at least October. ”It was around then that we

started to become more disciplined and militaristic,” he says.

John Baker, managing director at agency Organic, which designed the front

end, has his own version of events. ”Teams have to develop at a balanced

pace. People passed out on the job. That’s no way to run a company,” he

says. ”Boo.com was in the uncomfortable position of co-ordinating six

teams - logistics, customer service, front-end applications, design,

media, and back-end e-commerce systems. This is something every start-up

fails to focus on. Everyone focuses on the front end. There were also a

lot of technology choices I didn’t agree with.”

Ironically, the only thing to be ready in time for the original launch

date, the lifestyle magazine Boom, is now being redeveloped to link

straight to the main site. As a result, the company has laid off around 20

people who provided editorial for the magazine. ”We have built a cultural,

highbrow magazine good for building brand awareness, but now we want

something more integrated into the shop itself. We want a magazine where

you can click on an item and buy it,” says Alvarez.

Although Boom was set up in time by agency Digit, it stayed idle until the

main site went live in November. ”We worked our arses off to get that

magazine finished in time, only for it to just sit there,” says Nick

Cristea, design director at Digit. ”Boo should have at least launched the

magazine when it was ready to generate interest. I was always surprised it

never had a more direct tie-in to the site in the first place. When you

had an article on trainers, there were absolutely no links to buy

any.”

There were several murmurings prior to launch that boo.com was too classy,

too chic, to ever have a sale. But three months after launch, that is

exactly what has happened, with 40 per cent off everything on the site

from 27 January to 10 February. Whether a reaction to poor sales or not,

Alvarez is adamant that boo.com has not compromised its image. ”We are not

a discount retailer, we are a premium retailer. But premium retailers have

sales; Harvey Nichols has a sale at the moment. It’s all part of the

natural retail cycle. Marking down at the end of the season is not the

same as being a discount retailer.” The company was offering customers 15

per cent off their first purchase during December, provided they became a

registered user of the site.

Next month also sees the launch of its spring/summer season range,

offering a much broader selection from existing brands as well as

introducing 23 new brands on to the site. These will include Maharishi,

Quicksilver, Moschino, Mandarina Duck and Paul Smith. Boo.com can’t afford

to be too late delivering on this, or it really will look silly. Alvarez

claims that the company had ”a bumper Christmas” in virtually all the

countries it serves, but he doesn’t give any figures. Indeed, getting any

figures about boo.com out of Luke Alvarez - and, one suspects, any senior

boo.com personnel - is a bit like getting their site to work on a 28k

modem: virtually impossible. ”We will no doubt become a public company

eventually and then we will, of course, be obliged to release our

figures,” he comments.

However, the company did break the habit of its short lifetime at the

latest First Tuesday event for new-media professionals by releasing a

single day’s figures. It said that on 31 January, the site attracted

36,381 visitors generating 1,078 orders worth $83,000. Alvarez says that

boo.com’s valuation is currently in the hundreds of millions of

dollars.

Free from the labour and store costs of high-street retailers, the company

claims to be achieving margins of 50-60 per cent, making the economics of

clothing retailing much more compelling than in the book market, which is

around a third of that. The inventory turnaround is much slower, however,

which means it spends more keeping goods in warehouses for longer.

The warehouses are owned by UPS in Louisville and Deutsche Post in

Cologne, serviced by a combination of their picking staff and boo.com

supervisors. Goods are collated at one of these warehouses, put in a

boo.com box, wrapped in boo.com paper and delivered within five days

anywhere in the world. But this isn’t just another of the company’s empty

promises. It is getting its fulfilment right. A survey by retail group

Credit Suisse First Boston ranked boo.com the top pure e-tail site for

fulfilment of orders and on-time delivery, outperforming major sites like

Amazon.com, eToys and Bluefly.com. Boo.com has a legitimate reason to hold

its head up high at last.

Three months into its real life, what lies round the corner for boo.com? A

low bandwidth version of the site should be available next month without

Flash or any 3-D images, but if past non-events are anything to go by,

don’t bet on it happening that soon. Sites servicing Australia, Japan and

South Korea are scheduled to be launched in the second half of the year,

and Alvarez is keen to get Adidas and Nike selling their products through

boo.com. ”They do exclusives for many other retailers, so it wouldn’t be

inconsistent with our image to have them on board,” he says.

For all the company’s flaws - and which internet start-up doesn’t have a

few of those - the people behind boo.com have at least had the imagination

and the guts to attempt to smash down the two-dimension barriers of online

retailing. Its future will depend on several factors: the uptake of

broadband internet which promises high-speed, media-rich access; evidence

that people are genuinely willing to buy clothes without physical

interaction with the product; and a much more sure touch with its

self-promotion, to name a few.

”I’d like to have a brand that is as well known as The Gap. We’re getting

there and we’re much more global than them,” says Alvarez. Whether it

becomes consigned to a footnote in e-commerce history or a benchmark for

the next set of dotcoms to refer to, boo.com has given this industry

something to marvel at, and also what it really likes: something to whinge

about.

boo.com myth

Boo.com had already raised $120 million in venture capital by its initial

launch date of May 1999.

boo.com reality

It had raised nearer $25 million then. But having just completed its

fourth round of funding, the total investment currently stands at around

$190 million.

boo.com myth

Boo.com had a call centre full of people sitting idle before launch

boo.com reality

It had a call centre with skeleton staff from May, which it trained up in

returns handling, product expertise, call centre processes and back-end

processes. It recruited most of the staff for its four call centres around

six weeks prior to launch.

Boo.com’s turbulent rise to fame

Boo.com was the brainchild of Swedish childhood friends Ernst Malmsten

(chief executive) and Kajsa Leander (chief marketing officer), both in

their twenties. The two were not internet novices - they set up online

bookstore Bokus.com before selling it in 1997. Prior to that, Malmsten had

been a poetry critic for a Swedish newspaper, organised a Nordic poetry

festival in New York and founded a Scandinavian publishing house. Leander

had been a top model.

Along with compatriot Partik Hedelin (chief financial officer), they set

up headquarters in Soho’s Carnaby Street at the end of 1998, followed by

offices in Stockholm, New York and Munich, pencilling in a launch date of

May 1999.

The proposition of boo.com was to attack the $60 billion clothing market.

It would focus on sports fashion and market brands and styles difficult to

find in the high street, bringing street-cred gear onto the internet.

But to promote this merchandise and get across this image effectively, it

decided not to present its wares in a static catalogue-style format,

typical of many e-commerce sites to date.

Instead, it would present 3-D digital images of all the products, enabling

customers to rotate and zoom in, as well as dynamic content including a

lifestyle magazine and an online shopping assistant called Miss Boo. The

whole operation would be global as well as dynamic, aiming to launch in 18

countries simultaneously.

The proposition whetted the appetites of the Benetton family, whose

investment holding group 21 Investimenti invested millions of dollars in

the venture.

Boo.com’s other backers include LVMH, Goldman Sachs, Bain Capital and

Sedco. A private equity placing last spring valued the company at #78

million.

US agency Organic, which had just launched in the UK, was brought in to

design the front end and handle planning and buying for the online

campaign, while the designer stock was being photographed at a digital

imaging facility in the US. This involved thousands of products presented

at 25 different angles. The company also set up two distribution centres,

in Louisville, Kentucky and Cologne in Germany.

After a brief flirtation with Leagas Delaney, ad agency BMP DDB was called

in to develop the campaign, which resulted in TV and cinema ads of nerdish

geeks running around in boo merchandise and press ads showing them being

sick in a litter bin. BMP DDB was reported in May to be operating a #15m

global advertising account. Agency Digit was appointed to develop the

lifestyle magazine Boom.

May 1999 duly arrived, along with a generous helping of national press

coverage. But boo.com didn’t launch. Five months and a beta test for

10,000 insiders later, it finally arrived, with a media backlash already

in full swing. This went into overdrive when Mac users couldn’t access the

site and its heavy use of technology made it the grand tortoise of all web

sites. The monumental delay had enabled 330,000 users to register on the

site.

The company’s London operation has outgrown the cramped Carnaby Street

office and has now transferred to a huge suite in Regent Street.

boo.com myth

If boo.com sends you the wrong item, it won’t give you your money back,

only credit on the site.

boo.com reality

The company has a full refund policy, including the cost to the customer

of returning the product.

boo.com myth

An IT magazine reported that boo.com was planning to establish a chain of

bricks-and-mortar stores.

boo.com reality

It has no such plans to appear on the high street.