Zappos.com is an online shoe retailer that has taken the internet by storm. Mixing e-commerce with outrageously good service, Zappos have grown to become the world’s biggest online shoe store.
Based in Henderson, Nevada, USA, the company warehouse is located in Shepherdsville, Kentucky, along with an outlet store. In addition, Zappos has two outlets stores in Las Vegas, Nevada and Henderson, Nevada.
Founded in 1999, Zappos did “almost nothing” in sales for 1999, but grossed over $800 million in merchandise sales in 2007, and is projecting over $1 billion in 2008.
Much of the company’s rapid growth can be attributed to repeat customers and numerous word of mouth recommendations. This is a result of Zappos loyalty business model and relationship marketing. In 2005, the chairman reported that 60% of customers were repeat buyers.
Zappos has a stated goal to offer “best service in the industry” and their service promotes such legendary benefits as:
- Free shipping both ways
- A 365-day return policy
- A call center that is always open
The company promises 4-day shipping free with all orders but often delivers next-day anyway, so as to pleasantly surprise customers.
I recently interviewed Zappos CEO Tony Hsieh after meeting him via Twitter.
How long have you been with Zappos?
I originally got involved with Zappos as an advisor and investor in 1999, about 2 months after the company was founded. Over time, I ended up spending more and more time with the company because it was both the most fun and the most promising out of all the companies that he was involved with. I eventually joined Zappos full time in 2000.
Tell us a little bit about Zappos?
In 1999 our founder, Nick Swinmurn, was walking around a mall in San Francisco, looking for a pair of shoes. Nick spent the next hour in the mall, walking from store to store, and finally went home empty-handed and frustrated.
At home, Nick tried looking for his shoes online, and was again unsuccessful. Although there were a lot of “mom and pop” stores selling shoes online, what was interesting to Nick was that there was no major online retailer that specialized in shoes.
So, since it was 1999, and anything seemed possible at the time, Nick decided to quit his day job and start an online shoe retailer… and Zappos.com was born!
The original idea was to create a web site that offered the absolute best selection in shoes in terms of brands, styles, colors, sizes, and widths.
Over the past 8 years, the Zappos brand and our aspirations have evolved, and in addition to offering the best selection, we now want to be the company that provides the absolute best service online — not just in shoes, but eventually in any category.
Our goal is to position Zappos as the online service leader. If we can get customers to associate the Zappos brand with the absolute best service, then we can expand into other product categories beyond shoes. And, we’re doing just that.
Zappos.com currently stocks more than 3 million shoes, handbags, clothing items and accessories from over 1,100 brands. We offer the absolute best selection of shoes available anywhere, but much more important to us is offering the absolute best service.
We staff our call center 24/7, and currently have a staff of over 1,300 people. The vast majority of our employees work on the front lines taking care of our customers or shipping shoes out of our warehouse.
We believe that if we continue to focus on providing the absolute best service and the absolute best shopping experience, then we can continue to grow as a company.
What has been Zappos marketing approach since launching?
Most of the money we would have put into paid advertising we instead decided to put into customer service and improving the customer experience. The #1 driver of our growth has been through repeat customers and word of mouth. We’ve found that to be our best form of marketing.
What is your current marketing approach? Specifically, what social media do you pursue?
We are very active on twitter. In fact, we’ve created a page that aggregates any mention of Zappos:
We also have over 400 employees using twitter:
And we created a page that aggregates their tweets here:
Is there still traditional marketing in this mix?
Yes, we do a little bit of print (magazine) advertising and are experimenting with some TV advertising.
What social media channels do you employ in marketing Zappos? Ie, blogs, VOD, Twitter etc:
We also have a presence on Facebook and MySpace.
How has this impacted upon sales?
We aren’t thinking of social media as a way to drive sales. We use it for the same reason we have our 1-800 number at the top of every single page of our web site (most web sites hide their contact information). It’s so that we can develop a more personal connection with our customers and our employees.
Which social media channels do you believe have been the most effective?
For us, Twitter has been the most effective.
What other benefits have you noticed from your social media approach?
Our #1 priority at Zappos is our company culture. Twitter has been great in helping grow and support our unique company culture.
What advice would you give to marketers looking to include social media in their mix?
Don’t think of social media as a direct marketing tool. Most people will get turned off if you’re trying to sell them something. Instead, use social media as a way to connect more personally and deeply with your customers.