CASE

Lands Ends Custom Tailored Apparel Program In October 2001, Lands End, a direct merchant of traditionally styled clothing who offers products through catalogs and the Internet, announced its new IT- driven strategic initiatives, a custom tailored apparel program. By November 2002, 40% of Lands Ends web shoppers were buying custom-tailored chinos and jeans, while 20% of these shoppers were new customers. The concept of this initiative is mass-customization, a process that uses the same production resources to manufacture a variety of similar, yet individually unique products. Experts have found that consumers were willing to pay more for custom apparel and footwear. Other than increasing sales, the custom tailored apparel program brought Lands End other benefits, including enhancing customer loyalty and lowering the operating costs spent in creating, printing and mailing catalogs. However, withholding catalogs from Internet buyers does not generate online sales. Therefore, sending catalogs at the optimum frequency and pages to keep them apprised of new products is necessary. Lands Ends proprietary products, strong distribution infrastructure and established brand made the company ready for this electronic commerce initiative. Also, Lands End did not set up a separate Internet division; hence, avoided internal competition. To manufacture these individually unique garments, Lends End partnered with Archetype Solutions, Inc (ASI). After customers entered sizing information on Lands End website, the orders were sent to ASI and software produced electronic patterns and order files for each order, which were then sent via e-mail to production facilities in Latin America or Asia. Manufacturers produced, inspected and packed the garments. The garments were shipped to a third- party shipping center in the U.S. And then shipped to consumers. During the production process, the garments were scanned and the status was updated at each stage of the process. The status report for all orders was sent nightly to Lands End. ASI contracted with retailers (i.e. Lands End) and manufacturers. Retailers pay ASI a license fee, which include an annual fixed component based on number of categories and a per unit fee. Therefore, both retailers and ASI had the incentive to sell a lot of units. The manufacturers were also required to license manufacturing and tracking software from ASI. Therefore, the manufacturers need to be able to be adept and flexible, and able to learn new technologies fairly rapidly.

Why did Lands End introduce this new information system? What are the benefits this new system brought to Lands End?