Evan Schuman's StorefrontBacktalk

Outsourcing is always high on the list of ways to cut E-Commerce costs—but it is possible to hand off a little too much. Case in point: Sears, which last Tuesday (Dec. 28) launched an online movie download service that’s being operated by a vendor that also runs Best Buy’s competing movie service—and the two sites are virtual twins.

It’s another example of how tricky E-Commerce can get when you put the work in the hands of a third party who has as much loyalty to your competition as it has to your business—and is taking money from all sides. But there’s a deeper question: If no one at either retailer insisted that the third-party vendor protect branding with a unique Web site look, what else is unprotected from competitors? Customer recommendations? Sales data? CRM information?

For Sears and Best Buy, the problem stemmed from the fact that both retailers turned to vendor Sonic Solutions to run their movie-download sites. Best Buy’s CinemaNow came first, last May, but Sonic was eager to repurpose its technology and sold Sears on using it for the chain’s new Alphaline Entertainment site. The result: E-Commerce sites for two multi-billion-dollar retailers that look almost exactly alike, offer the same products at the same prices and share the same functionality. (The main difference: the Sears site has an orange logo, while Best Buy’s is blue.)

Sonic also didn’t quite succeed in scrubbing away all references to the Best Buy version in cloning it for the Sears site. The CinemaNow name shows up in the HTML code for hundreds of Alphaline Web pages. And on Alphaline customers’ PCs, downloaded movies are actually stored in a folder named “CinemaNow.” When Sears launched Alphaline, some pop-up messages on the site even mentioned CinemaNow by name.