American Shoe King Zappos: Create "WOW" Value

Zappos, an online retailer focused on shoes, aims to provide customers with the "WOW" experience as a goal, to provide customers with more than expected services and quickly win the market.

Although Zappos sold it to Amazon in 2009, it still maintained the independence of the company.

When Nick Swinmurn first proposed the proposal to sell shoes online, he was greatly questioned by Nick Swaim.

Today, however, the company has achieved dramatic success and become the world's largest online shoe.

In 1999, the network economy was just booming.

Entrepreneur Nick Swaim raised $150 thousand from family and friends to start Shoesite, but it is hard to find investors willing to invest large sums of money.

Besides capital, business experience is also a problem. In an interview afterwards, Swaim recalled: "I don't have any experience in running a store. Actually, I don't have any business experience."

Xie Jiahua is a young Harvard graduate. He once built an online advertising company Link Exchange with his roommate, and eventually sold the company to Microsoft for $265 million in 1998.

Xie Jiahua later established Venture Frogs, and invested in a series of websites.

At first, Xie Jiahua disagreed with Swaim's online shoe store.

Sam sent a voice mail to Xie Jiahua, and once again expounded his train of thought: the scale of the whole American footwear retail market is as high as 40 billion US dollars, of which 5% is achieved through mail order catalogues, which is equivalent to 2 billion US dollars.

Internet sales can get at least part of the share of directory sales.

Xie Jiahua was moved by the prospect described by Swaim, invested 500 thousand dollars in his personal name, and changed the company name from shoesite.com to Zappos, which is Spanish "shoes".

In 2000, frog venture capital invested $10 million in Zappos again, and Xie Jiahua became Zappos's joint CEO.

Swaim left Zappos in 2006, and Xie Jiahua became the only chief executive.

Lin Junrui became chief financial officer in 2005 and later became chief operating officer.

Such a management structure has been maintained so far.

In 2004, Zappos gained $10 million from Sequoia Capital, plus the other investors, who earned $20 million. The next year, they invested $15 million in Sequoia Capital.

With capital investment, Zappos's performance has doubled, with sales of $184 million in 2004, $371 million in 2005 and $597 million in 2006.

By 2009, Zappos had earned more than 1 billion dollars.

Invincible shopping experience

From the very beginning, Zappos provided customers with a special shopping experience, which made customers shout "WOW" in surprise after finishing their shopping.

As for the importance of customer service, Xie Jiahua said, "this is not a secret. People realized a long time ago that companies that provide high quality services are doing well, but no one has done so."

He treats customers as an investment rather than a cost.

The Financial Times reported to the company: "leap growth depends mainly on the foundation of a happy and loyal customer base.

With the development of the company, the proportion of repeat customers increased from 40% in 2004 to 75% in 2008.

Xie Jiahua pointed out that this is a necessary condition for a company to achieve sustained success: "you can let anyone buy your stuff once, and the hardest part is to let people buy your stuff again and again."

Xie Jiahua's first value proposition for the company is also to "surprise customers with services".

To provide customers with an interesting shopping experience, so that all aspects of Zappos are well known.

For example, Zappos's website downloads faster than any other website, and telephone service increases customer shopping experience.

Unlike other retail websites, the average waiting time here is controlled within 20 seconds. The customer service center has the power to solve anything.

Zappos understands that its main competitor is a traditional business shop.

In order to successfully operate, we need to ensure that customers can comfortably complete online shopping.

The company has used many different ways to deal with this challenge, including free return, special Internet product information, telephone contact, free morning shopping and so on.

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Refund and delay payment to dispel customer concerns

To let customers buy shoes online, the most important thing is to deal with the problem properly.

Customers can comfortably buy the right products and return them if they are not suitable.

Zappos soon realized that they could solve this critical problem by offering free returns.

It started with a 60 day free return, and then extended to 365 days.

Customers can buy several pairs of shoes of different styles. After trying them on, keep the right ones and return them unsuitable.

Is there any risk in doing so? Zappos will observe the behavior of customers in real time.

They found that the most profitable customers were not those who returned the least.

Those who always choose to return products free of charge are actually trying to buy all the different brands and styles of shoes.

Therefore, although they have a high return rate, they will also buy more products.

Overall, the return rate is about 35% of total sales.

In fact, the practice of Zappos has greatly released the pressure of consumers' decision making, and the subsequent postponed payment policy has made it very easy for consumers to make decisions.

In 2004, even after excluding the cost of return, the gross profit margin of Zappos reached 35%.

Detailed online product information

When customers choose to purchase, it is very necessary to provide them with as much information as possible.

Zappos is done in several ways.

For example, ordinary retail websites may have small product photographs, usually only at an angle, or often fail to show important patterns.

Zappos provides perfect physical information. When new styles (or different colors) are listed, pictures will show different products from different angles.

By 2008, every color and style product has 8 photos.

If customers are interested in a particular product, they can easily see a large number of pictures, selectable colors and different angles, as well as detailed descriptions of shoes.

For example, the pace of man (walking or running) is very important in finding suitable sports shoes.

The Zappos website has detailed discussions on the pace, and teaches customers how to choose a shoe suitable for them, and also provides a feedback platform for customers.

Customers can choose to write suggestions for the shoes they buy. The company does not edit any of these suggestions, nor does it remove the disrespectful words.

Unrestricted customer service center

Zappos's success lies in its pursuit of customer satisfaction at all costs. Its famous customer service center is widely praised and often brings "WOW" surprises to its customers.

For customer satisfaction, customer service can personally send the goods to the customer.

The most extreme service is that if the goods are out of stock and the customers are in a hurry, they will even introduce their customers to their competitors.

In July 2007, a customer communicated with her customer service center by e-mail, saying that she felt very guilty. She had intended to buy shoes for her sick mother, but when the shoes passed to her mother, she did not return the shoes in time.

So the customer service personnel came to the customer's home in person, sent the pair of shoes again, and sent a card to the customer.

Needless to say, the customer was deeply moved and spread this blog to the blog.

Most of Zappos's customers communicate through websites, of which about 95% of orders are processed through the network.

The remaining orders and related products, returns or other problems are handled through the customer service center.

Zappos all employees at headquarters have to undergo four weeks of training courses.

At the end of the course, all trainees were asked to work in the customer service center for at least two weeks.

In order to provide a good shopping experience, Zappos will focus on more.

For example, if we discuss the customer's running experience, the customer service center staff are encouraged to participate in such discussions and receive such calls.

If the customer is looking for products that the company does not have, the staff should provide them with at least three other websites to find the customers' needs as far as possible.

Even if the company does not benefit from that order on the surface, customers will still be patronizing later.

Xie Jiahua said: "we call on the customer service center staff to attach importance to customers.

We don't care if they buy this product or anything else. For us, every paction is an opportunity to show our brand. "

At Zappos, the staff at the customer service center can handle all the problems.

They have the right to choose the best solution without having to consult a supervisor or a manager again.

In order to better ensure the quality of customer service, the telephone staff are monitored by the company to ensure that the staff help the customer to satisfy their expectations while ensuring the comfort of their shopping experience.

The customer service center has about 5000 phone calls per day.

Zappos regards these as "personal opportunities" that satisfy customers.

As Xie Jiahua said, "when you get all the attention of customers, you get tremendous opportunities."

People who get a good shopping experience will share their experiences with friends, and positive or negative customer experience will be disseminated.

To reduce costs and increase feedback, managers decided to move Zappos to Henderson, Nevada, the outskirts of Las Vegas.

Las Vegas is a service oriented city with a working schedule of 24 hours a day and 7 days a week. In Las Vegas, many telephone sales centers are located here, and the connectivity of the Internet is also very good.

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Attracting brands to enter

In the early stage of development, it is difficult to attract many good brands.

The start-up Zappos is silent, but manufacturers think that Internet sales are flea markets.

But on the other hand, brands also like to get together. If Internet sellers can sign a sports shoes brand, it will be easier to persuade other brands, and brand combination means greater choice space and influence.

In the first year of its operation, Zappos signed 60~70 brand distribution contracts.

Zappos attaches great importance to the brands that customers buy.

Customers often tell the customer service center's operator what brand of shoes they want.

The customer service record book records the shoe brands that customers do not find on the Zappos website. Zappos will assess the value of these brands and ask for a contract.

As Aappos became famous in the industry, brands began contacting Zappos to talk about goods to sell online.

High end shoe brands initially did not want to cooperate with online retailers, and so did Zappos.

However, they will still do some short-term sales on the Internet, and sometimes they will also deal with seasonal products on the Internet.

When the Internet becomes an important shopping channel, no one will fight against money.

More importantly, if high-end footwear manufacturers reject the Internet, customers can only search for various Shanzhai versions, thereby destroying the reputation of famous brands online.

The third reason for encouraging high-end brands to enter is that Zappos founded the vertical product module "Couture" in 2003. It only sold shoes at the beginning, and then extended to clothing and accessories. This product module has the characteristics of high-end fashion products.

By 2008, Zappos had added outdoor activities (such as hiking) modules and short distance travel shops, which included ski, surfing, cross-country cycling and other products.

These modules attract a lot of customers who are passionate about high-end products, which leads to many brands eager to join the Zappos product module.

While enjoying the "wow" service of Zappos, customers began to ask Zappos to sell other products besides shoes.

So Zappos began selling electronic entertainment products, because many of its employees were fanaticism game fans who wanted to sell these game devices.

Lin Junrui said: "we find that people who have strong feelings for a product type are better and more efficient than other employees."

Today, the non footwear products sold by Zappos include handbags, leather suitcases, clothing, earrings, electronic products (digital video cameras, computers, game machines, telephone and GPS equipment), watches, daily necessities and jewelry.