E-Commerce at Williams-Sonoma Case Study Analysis

The article “E-commerce at Williams-Sonoma” (Kanter & Galvin 2000) details the
addition of an e-commerce strategy to Williams-Sonoma’s existing catalog and retail
channels for marketing and sales of cooking products. The article effectively illustrates
the path Williams-Sonoma followed to successfully implement this strategy from
inception to completion.

Connolly as a Change Agent

It was Executive Vice President Patrick Connolly who initially proposed that Williams-
Sonoma make the move into the e-commerce realm in 1997. While Connolly faced
several barriers to achieving this initiative throughout the process, his initial and perhaps
most challenging obstacle was convincing a skeptical and reluctant executive team of his
vision’s merits.

Though Connolly was further driven to pursue the online avenue by a proposal from
Anderson Consulting, he wisely exercised caution citing a concern of “de-focusing” the
business after a disappointing season. He instead enlisted the help of an Internet Task
Force with the help of Prophet Brand Strategy to solidify a brand strategy and an e-
commerce strategy. This decision effectively moved his vision forward by demonstrating
due care to cautious executives, while using an approach that has been proven to lead to
success for companies seeking to transition to the online realm. This approach
demonstrated Connolly’s understanding of the need to positively influence the opinion
leaders and, in this case, decision makers, to buy into his perception of the need for
change (Rogers, 1995).

Some years later, a study by Yasin, Augusto, Czuchry, and Lisboa (2010) would further
justify his approach by pointing out that a well-designed e-commerce strategy is not only
critical to the success of the plan, but increases the probability that the change will have a
positive effect on the business by enhancing the efficiency or effectiveness of the systems
being modified.

The strategies that were developed under Connolly are even further supported by Rogers’
Diffusion of Innovation (1995), which purports that before implementation of a new
business practice, the steps of gathering knowledge and persuading opinion leaders must
be executed. Furthermore, Rogers states that trialability and observability contribute to
the rate of adoption of innovations. Connolly’s strategy led to two pilot programs that
allowed his team to inexpensively trial and observe a small-scale e-commerce venture
and gather information about how Williams-Sonoma customers would respond to the
option of purchasing products online. The success of the pilots combined with the
knowledge gained from running them was key in persuading CEO Howard Lester to
adopt e-commerce as a viable way to conduct business.
Dunn’s Role

While Connolly brought forward-thinking optimism and enthusiasm to the e-commerce

initiative, Michael Dunn, President of Prophet, understood the need for sustainability of
both of the company’s brand and profits. Keeping in close contact with Williams-Sonoma
CEO Howard Lester, Dunn was able to focus on fulfilling Porter’s (2001) first principle
of strategic positioning which states that the goal of any new venture must be long-term
return on investment.

This focus on finance was a valuable insight. In a time when companies were
increasingly keen to share in the Internet pie, Dunn would not be rushed into the decision
so easily. Statistics published by Hiddings and Williams (2005) detail relative lead time
and survival rate of several companies that were first to market in various e-commerce
categories. These numbers strongly suggest that these companies did not likely gain any
advantage by being first movers. This lends further credibility to Yasin et al.’s advice that
having sound reasons and an effective strategy is the best path to e-commerce
implementation, as opposed to simply beating the competition to the punch. These
implications would certainly render Dunn’s and Lester’s skeptical approach an advantage
for Williams-Sonoma.

Looking Forward

While the implementation of e-commerce into Williams-Sonoma’s business model can

certainly be described as a success story, e-commerce is a rapidly evolving and changing
field. In order for Williams-Sonoma to sustain a level of success in their e-commerce
endeavors, vice president of e-commerce Shelley Nandkeolyar faces several challenges:

• Continued support from internal departments and teams

• Staying abreast of latest technologies and e-commerce solutions
• Continued marketing efforts to returning and new customers
• Scaling investments to support ROI model
• Coordinating e-commerce efforts with the company as a whole to maintain
consistent brand identity

The article indicated some internal resistance from other departments and concerns of
cannibalization of departments. Nandkeolyar overcame this obstacle by forming a
comprehensive e-commerce division complete with liaisons to the other departments.
These liaisons will need to keep in close contact with the other divisions of Williams-
Sonoma to not only keep them educated and trained about the ever-changing e-commerce
strategy, but will also need to communicate how the strategy directly benefits them.
Maintaining Williams-Sonoma’s approach of making the e-commerce initiative a
company-wide responsibility, and echoing Porter’s decree that “Internet technology
should be the responsibility of mainstream units in all parts of a company”,
Nandkeolyar’s team will need to effectually delegate the appropriate responsibilities to
the correct departments.

It is no secret that the Internet is rapidly evolving, providing richer content, more
interactive environments, slicker interfaces, and more dynamic solutions every day. It
would be in Williams-Sonoma’s e-commerce division’s best interest to keep informed of
new technologies in an effort to keep the website up-to-date and to ensure that the
company is using the most efficient and cost-effective tools to operate their e-commerce
program and to reach their customers. All of this must be done, of course, in the same
way they approached the implementation of the program—with careful planning and
strategy development in order to ensure sustainability. Any costs associated with
changing or updating the program must be carefully weighed against the effect the
changes will have on revenue streams.

Williams-Sonoma takes pride in the depth with which they know their customers. They
have a proven track record regarding appropriate data collection about their customers
and acting on the demands of their customers. Several examples of their dedication to this
value are provided in the article, particularly in the discussions about how they decide to
whom to send their catalogs, and their response to demands for a bridal registry. There is
no reason to believe that they will hold true to this value in regards to their e-commerce
strategy. There is no indication that Williams-Sonoma should fall short of the marketing
challenges e-commerce presents.

Change Via Pilot Projects

As illustrated by the case study, pilot projects can be a highly effective way to instigate
change in a company. The Williams-Sonoma Mother’s Day pilot brings to light several
benefits of employing this method to implement change:

• Relatively inexpensive
• Observable and trialable
• Garners internal confidence and support
• Aids in diagnosing problems and obstacles
• Aids in defining strategy
However, it is important to note that while utilizing a pilot project can aid in mitigating
risk associated with change, it does not guarantee the elimination of risks, and may
introduce its own set of risks. Threats or obstacles may include:

• Loss of funds if pilot fails

• Smaller scale of pilot project may not accurately represent full-scale results
• Maintaining the integrity of the brand and corporate identity throughout change
requires substantial effort and resources
As the case study demonstrates, these risks are negligible when considering the rewards a
pilot project may reap when done with thought and consideration.
RESOURCES

Hiddings, G.J. & Williams, J.R. “Are There First-Mover Advantages in B2B E-
commerce Technologies?” Loyola University, 2003

Kanter, Rosabeth Moss & Galvin, Daniel. “E-commerce at Williams-Sonoma”, Harvard

Business School, October 2000.

Porter, Michael E. “Strategy and the Internet”, Harvard Business Review, March 2001.

Rogers, Everett M. Diffusion of Innovation (4th Edition). 1995.

Yasin, M., Augusto, M., Czuchry A., & Lisboa, J. “Effect of Implementation Reasons,
Implementation Plans and System Mondifications on E-commerce Outcomes: A
structural Equation Approach. August 2010.