IN-FLIGHT CATALOG company SkyMall Inc. has big Internet plans for this year-and will spend $27 million ($20 million more than last year) to see them through.
The Phoenix-based outfit is overhauling its Web infrastructure, expanding into more sites and beginning a marketing campaign. And it fully expects these initiatives to someday replace its core business. “It’ll eventually cannibalize the offline business, but the world is moving in that direction,” says SkyMall chairman, president and CEO Robert M. Worsley.
Worsley believes that Web users want one-stop shopping, and that the relationships SkyMall already has with airlines and catalogers (100 and counting) will make it the place to go. Another big advantage is the way it can drive traffic to the site through the quarterly print catalog, available to over a million airline passengers a day and in 400,000 hotel rooms.
SkyMall has had a Web presence (www.skymall.com) since January 1996 and last month it unveiled a redesign meant to improve speed and performance. “The site didn’t really look like a top-10 e-commerce site,” Worsley admits. “It was too artsy and wasn’t focused on reducing the number of clicks.” The new site is about a third faster and the clicks needed to go from home page to checkout have been cut from six to three.
In the third quarter the company will launch its own travel site, which will include travel tips, itineraries, video clips of destinations and interviews with people who invented or who have used the travel products sold-community-building stuff. One feature would allow consumers to get their frequent flyer information for all their airlines simultaneously. To facilitate operations, the regular site and the travel site will be separate (though linked) until 2000, when they’ll be merged.
SkyMall also sees the Web as a way to move into business-to-business. Last October, it acquired Durham & Co., Tempe, AZ, which makes products like T-shirts, hats, golf balls, awards and plaques with company logos. SkyMall has just started an intranet program to give companies (and their employees) a place to buy Durham and SkyMall items. Right now there are four such intranets-for Continental, Marriott, United Airlines and the U.S. Postal Service.
And SkyMall definitely plans to add more products, from both catalogers and manufacturers. Right now it has 6,000 items on the site (three times as many as in the print catalog) and hopes to have several hundred thousand by year’s end. The Web has an infinite merchandising space. “We’ve turned down a lot of [companies] over the years and now we can include them,” Worsley says.
Other plans include setting up co-branded sites with other marketers, especially financial institutions, and being on the cutting edge of broadband so that it can provide full-motion video at the site, including interactive television for buying products. It has also hired Grey Advertising to come up with a campaign.
All this adds up. SkyMall expects to show a loss-between $1 and $1.20 a share-for the year because of it.
“We’re really committed. I don’t know any company our size willing to spend $27 million on this and shoot their legacy system and go to a Web-based system,” Worsley says, referring to the fact that SkyMall has moved its order-taking and database operations, for both print and online, to an Internet-based infrastructure.
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