PETsMART Chairman and CEO Phil Francis to Speak on the Future of Clicks-and-Mortar Retailing

BEVERLY, Mass., Sept. 25, 2000-MobileToys.com Board Member and Director Philip L. Francis will give the keynote address Monday morning at the Mobile Electronics Retailers' Association (MERA) Knowledgefest, taking place Sunday, Sept. 24th through Tuesday, Sept. 26th, in Dallas, Texas. Mr. Francis is Chairman, President and Chief Executive Officer of PETsMART, a leading worldwide operator of pet food supplies-and-services superstores.

In his speech, Mr. Francis tells MERA members that "the web and e-commerce are here to stay. You will suffer if you ignore them. You are not too late. Brick-and-click or multi-channel [retailing] makes the pie bigger." "In the case of this [mobile electronics] industry, the web means more pieces of equipment will be sold and installed than would have been sold via stores alone," he declares.

Among the e-commerce problems addressed in his speech, Mr. Francis cites high customer-acquisition costs as being one of the major obstacles: "As a retailer I am working on knowing both lifetime value and customer acquisition cost," he states. "I never did. I should have. If you spend more to acquire a customer than the lifetime value [of] a customer, that is a perfect definition of terminal stupidity and self-abuse. . . [It means] disaster. We generally find most on-line customer acquisition costs are too high and that our best costs-near zero-are from cross-promoting our stores and our web site."

Other crucial factors mentioned by Mr. Francis determining the success or failure of an e-commerce platform include "the speed of a web site that represents you, [the] number of clicks to buy on a web site that represents you, ownership of the customer name and address, and safeguarding your customer's privacy concerns."

According to Mr. Francis, when these e-commerce impediments are overcome, the results can be very positive. Of his association with MobileToys, he notes: "I agreed to a relationship with Mobiletoys.com because it passes the hurdles I know today of serving several constituencies without penalty and making the pie bigger for all."

Prior to joining PETsMART on March 1, 1998, Phil Francis was President and Chief Operating Officer of Shaw's Supermarkets, Inc., headquartered in Massachusetts. Mr. Francis is a graduate of the University of Illinois and the Indiana University Business School. He has over 29 years of experience in retail and wholesale, and held various managerial positions with Roundy's, Cardinal Health, and Jewel Companies. He has been heavily involved in the Chicago, Columbus, Ohio, Boston, and Phoenix United Way organizations. He is an active member of Greater Phoenix Leadership.