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Internet is no game at FAO
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November 19, 1999: 10:32 a.m. ET
Toy retailer's '99 holiday Web site has shaky start, but bounces back quickly
By Staff Writer Tom Johnson
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NEW YORK (CNNfn) - Jennifer Townsend checked her watch almost instinctively as the minutes crept by Monday morning, each time throwing a hopeful glance at her computer screen.
A few floors below, scores of children and adults were streaming freely through FAO Schwarz' hallmark store on Manhattan's Upper East Side.
But in a toy-littered cubicle on the building's fourth floor, Townsend and the other two members of FAO's Internet development team were stuck hopelessly in a virtual gridlock.
Hours after FAO's redesigned Internet site -- expected to host tens of thousands of online shoppers each day this holiday season - was scheduled to go live Monday, the toy store's new Web page remained stalled in an online traffic jam, completely at the mercy of a sputtering Yahoo! Inc. server thousands of miles away.
"It's been a very trying morning," said an exasperated Jennifer Townsend, the chief architect of FAO's holiday efforts online, shortly after noon.
A retail leader, but a laggard online
Just three months into her job as FAO's director of new media, Townsend and her content manager, Tami Zonenshine, had already logged countless nights and weekends trying to redesign the Web site by Nov. 15 -- generally considered the official start of the online holiday shopping season.
After spending the weekend working through last-minute glitches, the two passed along all the necessary information to Yahoo!, which actually builds FAO's site, first thing Monday morning in plenty of time for a planned 11 a.m. launch.
And they waited . . . . and waited. By 11 a.m., nothing. By noon, still no new site.
Several phone calls to Yahoo! revealed the company had put in extra servers over the weekend to handle the expected onslaught of holiday traffic and there were some problems getting files transferred.
FAO's requests were literally waiting in a technological line behind several other companies also trying to make changes to their sites.
Not the kind of propitious start Townsend was looking for.
"This is a very frustrating feeling because all of a sudden, we're powerless," she said. "Now, I'm really concerned with how Yahoo is going to handle the rest of the [holiday] season. [The traffic] is only going to get worse."
Truth be told, FAO Schwarz has traditionally approached its e-commerce strategy with a bit less urgency than other toy companies because, for the most part, it can.
Opened in Baltimore nearly 140 years ago by a German immigrant, FAO has survived largely on its ability to provide customers with hard-to-find toys from around the globe and an entertaining atmosphere few, if any, big-box retailers can match.
Still, the New York-based company beat most of its competitors onto the Internet, launching its first Web page in 1995 and allowing for online transactions the following year.
However, since that time FAO's site has remained fairly stagnant, only slowly increasing its emphasis on building the site and, all the while, losing ground to both traditional retailers -- like Toys 'R Us -- and online toy stores -- like Amazon.com or eToys.
"The desire to spend money to build a brand name isn't lacking in this industry anymore," said David Cooperstein, director of consumer e-commerce at Forrester Research. "Within the next year is when you are going to start losing customers if you have a real online presence."
Critics like Cooperstein have largely panned FAO's site for its lack of functionality and difficult navigation.
"FAO.com has been slow to embrace the technology and the functionality of the Web and therefore, is not seizing their customers as much as their competition," said Liz Leonard, an online retail analyst with Gomez Advisors.
"Competitors online that don't have the brand recognition or the economies of scale that FAO Schwarz has are going to beat them because they have features" like gift registries and gift wrap, Leonard said.
This year, such comments become more important than ever. Analysts project Americans will spend roughly $250 million in online toy stores during 1999, up from the $37.5 million they spent last year.
By the year 2003, Gomez Advisors projects total U.S. online toy sales will reach $1.7 billion, or roughly 5.5 percent of the total U.S. toy market. With those kind of dollars being spent, few can afford to be left behind.
Leonard recently rated FAO's Web site 11th, or dead last, among major online retailing sites, noting the difficulty experienced trying to find a desired toy or getting customer service help via the Internet or the phone.
Leonard's ratings were completed on Sept. 16, almost the exact day Townsend began overhauling the FAO site. Not surprisingly, many of the site's new features would directly address many of Townsend's concerns.
Tick, tock, tick, tock . . . .
Assuming, that is, that the new site could actually get off the ground.
The hours slowly ticked by as Townsend and Zonenshine waited, occasionally calling Yahoo! for an update.
A frustrated Townsend even went so far as to question Yahoo! Directly about their ability to handle traffic the rest of the season.
"I don't want busted links on the first day," she said at one point.
Still, the situation could have been worse. Even while it waited for its new site, FAO's old site was fully-functional and, from every indication, was handling more traffic than ever before.
FAO's traffic had slowly been building since the company dropped its first set of holiday catalogs in the mail on Sept. 1.
The company's Internet operation coordinates its every move with FAO's catalog business, tracking the hottest toys based on mail and phone orders and giving them more prominence online.
Only this year, the Internet operation is poised to make a mark on its own. The privately-held company doesn't divulge exact figures, but after posting an 800 percent growth in online sales last year, FAO.com found itself already ahead of projections heading into the heart of the holiday sales season.
Success at last . . . sort of
Finally, at 5:30 p.m. Monday evening, FAO.com's new Web site flashed on Townsend's computer screen.
It wasn't perfect -- the screen was outlined by a large white strip and there were minor glitches throughout - but at least the site had arrived. The new display featured an attractive array of colors and graphics, a stark contrast to white background from before, and neatly arranged most of the site's essential options on the top half of the home page.
By Tuesday morning, Townsend and Zonenshine had repaired most of the technical glitches and were able to concentrate on more aesthetic changes.
The only major problem overnight was one of the site's new pages hadn't "taken" its template. Unfortunately, it was the "Shopping Cart" page, where customers actually purchase their items.
"That's a big disappointment to me because customers are just getting to the point where they are wondering, "should we trust this site and put in our credit card number?" and the page is acting funny," Townsend said.
But remarkably, there were apparently few problems from a customer transaction standpoint once the new page was launched. In fact, by Wednesday morning, the only complaint had been from a frequent customer, who sent Townsend an e-mail early Tuesday morning after shopping on the site the day before.
The customer, who apparently had been shopping online just before the redesign went live, complained about the site's overall layout and recommended Townsend "check out eToys site and copy it."
Townsend good-naturedly wrote him back and invited him check out their new design.
A clear improvement
By Wednesday, Leonard's view of the site had changed.
"From a customer's point of view, there is immediately a greater sense of confidence about the site," she said, lauding the easier-to-navigate layout and new features, like the ability to create and check a wish list.
Leonard said it was still too easy to get lost in the site and not be able to find your way out again, but overall, she believed it was much improved.
Townsend, a stickler for feedback, welcomed the comments and made a mental note.
In the next few days, the site will change again, although not dramatically.
On Friday, FAO is scheduled to launch a Spanish version of the site now that the English version is up and running.
And on Monday, assuming all goes well, the site will include a new animation display when customers first log on. The display is designed to mimic the welcoming atmosphere customers sense when they travel to one of FAO's 40 retail stores nationwide.
"When you walk up to the front of our store, it's like walking into Wonderland," Townsend said. "This will create a unique experience as well."
Customer reaction to the new site won't be known for a few weeks, but even without all the changes, the site is attracting visitors like never before.
But on Wednesday, as Townsend and Zonenshine were reviewing their new site, Brooke Adkins, FAO's vice president of catalogue, marketing and public relations efforts walked in to congratulate them on the high traffic the site had experienced the day before.
"Really, really good work," Adkins said, flipping through numbers that, at least temporarily, erased Monday's problems from everyone's minds.
Calls to Yahoo were referred to the company's tech department. An executive there admitted there were technical problems, but refused to comment on the record. 
This story is the first in a series following FAO's online effort during the holiday season.
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FAO Schwarz
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