AOL Rebuilds Shopping Center

With nearly 2 million online shoppers visiting America Online (NYSE: AOL) for the first time in the second quarter, the Internet portal and online service company has decided it is time to remodel its stores. The company announced yesterday it will launch a new shopping service this summer called Shop@AOL.

Leading the effort is Patrick Gates, who joins AOL as vice president of e-commerce after 15 years with major merchandisers such as the Home Shopping Network, Neiman Marcus and Barneys New York.

Changes in the Works

According to the the company, AOL’s shopping service will get more than just a graphic makeover. Shop@AOL will provide more special offers and incentives, in an attempt to build customer loyalty to the site, with a more personalized interface. AOL says the company will improve its product search capabilities checkout process all AOL affiliated merchants can use.

Two other new shopping sites –Shop@Netcenter and Shop@CompuServe — are slated to launch later this year on AOL’s netcenter.com and compuserve.com Web portal sites. AOL operates Netcenter through a partnership with NetScape. AOL bought competing interactive service provider CompuServe two years ago but has continued to operate the service with its own identity and appearance.

AOL’s current shopping service was ranked the top Internet commerce site in March by Internet research service Media-Metrix. In that month, shoppers spent more than $1.8 billion (US$) on online purchases from AOL merchants. The shopping service features more than 100 stores in 16 product categories. AOL has more than 17 million members on its America Online interactive service and another 2 million members on CompuServe.

For Comparisons, Surfers Must Look Elsewhere

Price, in particular, will likely play a much greater role in deciding who shops where on the Net. On that score, Shop@AOL could find itself at a disadvantage because it appears as if it will offer no direct comparisons on product prices, as many other sites do. AOL decided against doing so because, it said, for the benefit of retailers worried that direct comparisons lead to lower pricing.

AOL’s move also comes as sites with selection comparable to malls, such as aptly named iMall, and specialty sites selling everything from books and music to sporting goods and toys rush to expand.

Real Estate Growth

In addition to redesigning its shopping mall, AOL this week announced a reworked agreement with RealSelect, Inc. to make the real estate service AOL’s exclusive home listings service. RealSelect will also be the exclusive service on CompuServe, AOL.com and Digital City, another Web site AOL operates. The two companies first teamed up a year ago to put RealSelect’s listings on AOL’s interactive service.

Under the new arrangement, AOL members and visitors to the various Web sites operated by AOL will be able to connect to three Web sites operated by RealSelect. Visitors can look through an online inventory of new and existing homes for sale on Realtor.com, which features 1.25 million home listings. Or they can access an inventory of 13,000 newly constructed homes inventory on HomeBuilder.Com, the official new homes site of the National Association of Home Builders.

RealSelect also operates CommercialSource.com, a site for commercial real estate. AOL and RealSelect will also provide visitors RealSelect’s Find a Realtor service, allowing consumers to search for realtors geographically.