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?

Advertisements

My love-hate relationship with Amazon

I admit it. I buy on Amazon.com all of the time. The bottom line is prices are aggressive and the return policy(ies) are typically consumer friendly (this varies depending if you are buying from Amazon directly or from one if its merchants). If a smaller “category-killer” e-tailer is competitive on these measures, it has a good shot of earning my business. That said, if it’s a registered Amazon merchant, I’ll likely opt to buy through Amazon.com instead of on the company’s website, because I am less confident that the rinky-dink operation shipping out of its garage observes best-in-class privacy and security practices. And, I believe if a merchant feels accountable to Amazon – with the risk of being removed should Amazon receive too many complaints – it will be more inclined to resolve consumer issues quickly.

Amazon is approaching a “one-stop shop” in the truest sense, so I can get my online shopping done at one destination, without providing my credit card and shipping details multiple times. I know it’s lame, but I also enjoy the challenge of qualifying for free super-saver shipping with as close to the minimum $25 purchase as possible.

My issues with Amazon relate to user experience. In its effort to rule the land of web commerce in a head-to-head faceoff with eBay, Amazon has drastically complicated the browsing and buying experience and thoroughly confused shoppers. Average consumers don’t know that Amazon has two distinct business models, 1) taking inventory and shipping from local distribution centers, and 2) passing orders onto merchants who drop ship from their own stores or warehouses. Despite Amazon’s efforts to explain within the selection and checkout processes, most consumers don’t grasp why items do or do not qualify for free shipping or why they have to pay multiple shipping fees.

Perhaps even more difficult to understand is why the same product can show up multiple times on a search results page, often with a range of prices (if you’ve never experienced this before, just do a search on Melissa and Doug Deluxe Wooden Multi-Activity Table and look at the top 3 results). Again, this is because numerous merchants within the same category – or “department” in Amazon terminology – are selling the same product. Sometimes price disparities are due to games retailers like to play (e.g. charge a lower price and make it up in the shipping and handling charges), which consumers have grown accustomed to when viewing cross-merchant product availability and pricing on shopping engines like pricegrabber.com and bizrate.com. But, this is awkward and unexpected behavior for a single website. My favorite scenario is when Amazon has its own inventory to display, and its prices are higher than its merchants. This probably does not happen too often though, and when it does, Amazon still gets a bounty on the sale, collects valuable consumer data, and owns re-marketing rights.

So what’s the solution? For starters, I’d love to see Amazon more intuitively organize and display its departments, merchants and product selection. Perhaps it should consider mimicking the metasearch and parametric filtering combination used by Kayak.com (travel) and Indeed.com (job search), but instead of clicking away, keeping users within the Amazon storefront. This would make the seller’s name more visible, clarifying when Amazon is the merchant or just the middleman, who is charging which fees, etc. In addition, it could allow shoppers to drill down to the details (e.g. shipping fees, merchant rating) they need to gain comfort with the purchase and complete the selection. Then via an open pane in the window, customers would return to the main Amazon site where the purchase is funneled to a central shopping cart.

VistaPrint – Great Product, Awful User Experience

I admit I’ve used VistaPrint several times now for business cards, address labels, even invitations for my wedding brunch! Plain and simple, the quality of the product is excellent, the prices are very competitive (you can get 250 free business cards and only pay shipping), and there are almost always web coupons on couponcabin, retailmenot and the like. (If you’re a repeat customer, you’ve likely received these coupons directly with your merchandise).

BUT, if I were not a savvy internet consumer, I would be extremely frustrated (at the very least) and angry (more likely) at the overly aggressive cross-sell and upsell tactics used on the website. As I understand it, VistaPrint heavily relies on this for its success.

Don’t get me wrong, as a marketer I strongly advocate increasing transaction size while you have a visitor captive in the shopping cart funnel (and even before). But VistaPrint takes this way too far; they clutter the screen with tons of add-ons, making it difficult to differentiate between your selections and their recommended items. Navigating to the final purchase page takes way too much time. At one point they even force you to choose between 2 options, one reconfirming only your items and another with their selections added. And if I’m not mistaken, the latter is placed at the top of the screen, requiring the user to scroll below the fold to see his original order. It’s truly a miracle if you make it through with only the merchandise you intended to purchase.

And it doesn’t stop there. After you complete the transaction, for a limited time, VistaPrint offers a discount on additional quantities of the same merchandise and other related items. The first time I experienced this, I was really PO’d feeling as though I had paid too much.  Now I’ve learned to game the system and place half of the original order at the higher price, then add the other 50% afterwards at a lower price. (Note: it takes only one extra click of the mouse to do it this way). I’m assuming VistaPrint doesn’t want to encourage this type of behavior, but who wouldn’t quickly figure this one out?

I’m left scratching my head. How has VistaPrint been able to get away with this for so long? They appear to be the market leader, but similar services are available, so at least to some degree, competitive forces are in play. Are VistaPrint’s prices so attractive that consumers simply tolerate it? Do they have far more variety and customization options? Do they market better than everyone else? Do they primarily target SMBs who can often make use of their complementary product recommendations?

I have to believe that ultimately in targeting individual consumers, companies must follow the guiding principle – “Generating higher sales at the real detriment of user experience may increase near term sales, but will be unsustainable in the long run.”