Jon Michaeli’s Blog


Zappos and Amazon still have much to learn

By now most everyone knows Zappos was recently acquired by Amazon for $850+ million. For investors who put in a total of $40+ million and employees, this is a home run. And most folks I know have lauded the company for beating the odds to build the largest and most recognizable online shoe store. Along the way, Zappos’ other successes include fostering a close-knit internal culture, providing superior customer service (including a 365-day return policy), and pioneering a free shipping both directions policy (which is now a standard in the industry, also offered by ShoeBuy, Piperlime and others).

People love Zappos, because 1) in their view, the company has removed much of the hassle in buying online, and 2) unusually friendly call center agents go out of their way to please customers. #2 is indeed unique and refreshing and deserves some praise. But, this is also a backwards way of thinking in that personally, I don’t shop online to talk on the phone (the exception being expensive highly considered purchases). And if I do need to call on more than a rare occasion, it’s a sign that not enough hassle has been removed in #1.

For the most part, I care about great selection and availability (Zappos gets good marks here) and a user-friendly easy-to-navigate site that makes it quick and painless for me to find the shoes (or apparel) that matches my needs and preferences (Zappos.com is a cluttered mess and fails miserably here).

Let’s face it, there’s a big hurdle to buying shoes online to begin with (when I bought shoes on Zappos in the past, I ordered 5+ pairs and kept none), so the site should start off clean and the shopping engine and flows should be as contextual and directed as possible. The more inventory a site has, the more important this is. If companies in industries with tens or hundreds of thousands of options can build scalable solutions (e.g. Kayak in travel and Indeed in job search), so too can an e-tailer like Zappos.

Zappos gets kudos for how it communicates and interacts, whether in the call center or through social media channels like Twitter (@zappos has over 1 million followers), but there are many other dimensions to servicing customers. Zappos, and even its acquirer Amazon, can learn from a company called Forzieri, a much less known Italian clothing and accessory retailer, with a fairly decent website.

I browsed around briefly and added a sweater to my shopping cart. I also found a nice pink button down on sale, however my size was unavailable. But instead of a “Sold Out” message, the site had a button labeled “Check Availability”, which I clicked. I assume this prompted the inventory system to check the warehouse(s) and/or stores. Pretty cool. Far larger retailers don’t integrate their online and offline properties so elegantly. After a few more minutes, I left the site without making a purchase.

Fast forward a few days when I had forgotten about Forzieri. I received a “Courtesy Reminder” advising me that the abandoned item in my shopping cart would be saved for 2 weeks, and if I completed the order in the next 2 days, I could use the private 10% off coupon provided in the email. Brilliant. A super-targeted discount with a clear and time-sensitive call-to-action. I liked the sweater enough to put it in my cart, so perhaps all I needed was a little extra incentive.

This is simple to do in e-commerce. Just deposit a cookie on the user’s machine and have functionality to accept unique coupon codes on your site (most Tier 1 and 2 sites do both of these already). Now you can not only distribute the codes to those who’ve visited and taken a specific action, but also track conversion rates of various offers and optimize.

As for the pink shirt, Forzieri let me know they couldn’t find my size after all. But it didn’t end there. The email included a link to a page where the “newest arrivals” by the same manufacturer were available for viewing and purchase. Sure they were full price, but as these were just added to the selection, they were the latest, most up to date styles. That warrants a premium, right?