Zappos is a leading online retailer that started out as an
online shoe retailer named ShoeSite.com. Founded in 1999 by Nick Swinmurn, the
initial inspiration came when he couldn’t find the right pair of shoes at his
local mall. Swinmurn was able to get Tony Hsieh and Alfre Lin on board after he
mentioned that footwear in the U.S. is a $40 billion market (Wikipedia, 2015).
After the official launch of the company in 1999, the name was changed to
Zappos (a variation of “zapatos,” the Spanish word for shoes). In 2001, Zappos
more than quadrupled their yearly sales, and then in 2002 they opened their own
fulfillment center in Kentucky. The company is headquartered in Las Vegas.
The Zappos Approach:
Tools and Techniques of the Trade
As a premier online retailer, Zappos manages multiple web-based
sites including blogs, social media, and of course the actual ecommerce site, Zappos.com. Managing multiple digital channels
along with a huge ecommerce site, it is important to Zappos to understand how
customers engage with the product and customer service representatives, to make
sure that they are managing their return on investment (ROI). When you have as many
channels to manage and measure as Zappos does, you need to understand which
ones are more successful and why.
According to Zappos, they take the analytics data they
gather about what customers view on the site and “dumb it down” through the
product recommendation engine, to pitch ads for a general range of products
that the consumer is likely to buy (Demery, 2012). Their theory is that
creating targeted ad content that shows people exactly what they have searched
for on the site, is more likely to convert to sales. However, Zappos does try
to steer away from producing ads that are too
highly personalized to not be overly “creepy” to their customers. (Creepy…
Their words, not mine).
Ecommerce Analytics
Zappos uses a variety of third party service providers such
as Google Analytics, although a recent job posting for a Web Analytics manager
for Zappos states that employees must be familiar with WebTrends, and Omniture as
well. Using these web analytics tools will help the company better understand
visitor traffic especially when determining where in the buying process
customers may leave the site and what are specific areas of interest to them. Through
the use of tracking data from these tools, Zappos was able to determine that approximately
75% of their sales has come from repeat customers (which shows a very high
level of customer loyalty to the brand) (Quesenberry, 2010). At one point in
Zappos’ history, most of their customers heard about Zappos through Word of
Mouth (WOM) or online advertising. Do you think that is still the case with
Zappos? On the other hand, print advertising makes up a surprisingly small
percentage of their overall media spend (Because let’s be honest, how many
print ads for Zappos have you seen?)
Social Media and Blog Analytics
Data about customers is collected from many of the Zappos’
other online and digital ventures including social media, blogs, and their Associates Program, which
allows other people to promote Zappos through text links, banner ads, and other
methods (Zappos, 2015). Zappos also offers a large number of niche blogs with a
range of topics, which obviously appeals to different customers with different
interests. The variety of these blogs is meant to help create a community for
Zappos enthusiasts of different interest backgrounds. Google Analytics is used
to track the interactions on these blogs, including which articles are the most
popular and which blogs bring in the most traffic. Just like we have discussed
in previous assignments about how blogs can use Google Analytics data, Zappos
can use this data to better understand how their blogs are being consumed by
their customers, and to see if the blog content is producing conversions on the
main ecommerce site. Producing this blog content can help boost SEO and keep
Zappos at the top of search engine results.
Along with blogs, Zappos has a significantly large presence
on social media and uses it as a tool to track visitors and consumer interests.
Facebook and Twitter are the two main channels that Zappos utilizes to drive
customers to the site; However, Twitter is more often used as a customer
service tool than an advertising tool. Zappos has a large paid advertising
effort on Facebook and uses Facebook insights to help drive the company’s
content strategy on the main site.
Although Facebook is considered a top channel for Zappos,
they have started looking in to other channels to help monetize their social
engagements. Enter a new tool called PinPointing, which turns
Pinterest activity into shopping recommendations. The tool is still relatively
new and no formal data has been made public (at least not that I could find),
but it’ll be interested to see the web analytics data for this tools plays out
and translates to revenue (McGee, 2012).
Data Usage: How does
Zappos use this data?
According to the Zappos Privacy Policy, the main ecommerce
site uses Secure Socket Layer (SSL) technology to provide the most secure
shopping experience possible (2015). Zappos does however, collect a variety of
information in many different ways from the customers. In their privacy policy,
Zappos says they use their customer’s personal information in the following
ways:
- To help make the site easier for customers to use by not having to enter information more than once.
- To help customers quickly find information, products, and services.
- To help Zappos create content that is the most relevant to its customers.
- To alert customers to new information, products, and services that are offered.
Zappos also takes their social data and integrates it in to
the overall CRM strategy. Since social media is the first line of customer
service, they monitor public mentions of Zappos and use sentiment analysis to
uncover customer service opportunities as well as to get a feel for the overall
brand perception. Zappos is continually searching for ways to use the social
data for a more integrated CRM purpose by better understanding the connection
between a fan’s engagement on Facebook and their behavior on the site. Zappos
feels that they can give a better customer experience if they are able to
associate a social fan with a customer on record on the site (Abramovich,
2012). According to Nate Luman, the Facebook Marketing lead at Zappos, they use
Fan-page-user-overlap data to help branch out in the audiences they target with
their ads. By using this tool, they can reach audiences who are similar but
“not-so-obvious”. Fan-page insights inform Zappos’ content strategy. They
optimize for engagement and track the type of content that prompts the most
likes, comments and shares.
Perspectives
Zappos does an extremely good job at tracking their
customers and using web analytics to help create more targeted ads. The large collection
of user data helps to deliver extremely targeted ads to the customers. While it
seems that Zappos may not need any additional assistance in the matter, there
are a few recommendations I can make to improve their overall web analytics
efforts.
Zappos
offers thousands of products, from shoes to clothing and accessories. They have
dedicated shops to specific interest areas. It is VITAL that the homepage
continue to produce these interest areas that customers are attracted too. This
data is collected from Google Analytics and insights from Facebook and other
social media channels.
Making
these shops easily accessible will provide the customer with a great user
experience.
Looking
at Zappos’ blog content, they could consider having guest blog posts by “industry
experts” in the various areas in which they blog about. For example, on their
running focused blog, they could invite a professional runner or coach to write
about the best shoes for running. Zappos would work with this professional
coach/runner to promote the blog post through the various social channels which
would invite the author’s network to view the blog when they might not have
done so before, and gives Zappos fans the opportunity to hear from an expert.
Zappos
does many things right on their site by having video content on many pages in
the form of a product description, as well as social sharing options that allow
customers to share links to the items they are interested in so their friends
and followers can see. Directly linking to Pinterest and allowing you to pin
items directly to Pinterest boards is a key way in which Zappos can work to
monetize Pinterest in the future.
Zappos
is still one of the top ecommerce sites around and offers innovatives concepts
that help sell the product they carry. Zappos has great WOM marketing, great
customer service (which leads to the WOM marketing), and interesting ways to
continue bringing people to their site even if it’s just to read some of their
blog content. By continuing to do targeted ads for products that people just
viewed on the site and not getting overly “creepy” in their advertising, Zappos
will continue to be a heavy hitter in the internet retailer world.
Sources:
Abramovich, G. (2012, June 28) How Zappos Made $3.50 per $1
spent on Facebook Ads. DIGIDAY. Retrieved from http://digiday.com/brands/how-zappos-makes-3-50-per-1-spent-on-facebook-ads/
Demery, P. (2012, October 19). How Zappos balances privacy
and targeted ads. Internet Retailer.
Retrieved from https://www.internetretailer.com/2012/10/19/how-zappos-balances-privacy-and-targeted-ads
McGee, M. (2012, August 29). PinPointing: Zappos’ Clever New
Tool to Monetize Pinterest. Marketing
Land. Retrieved from http://marketingland.com/pinpointing-zappos-clever-new-tool-to-monetize-pinterest-20142
Quesenberry, K. (2010, March 23). Walk a Mile in Zappos’ New
Media Shoes. Post Control Marketing.
Retrieved from http://www.postcontrolmarketing.com/?p=52
Wikipedia. (2015). Zappos. Retrieved from http://en.wikipedia.org/wiki/Zappos
Zappos. (2015). Privacy Policy: Protecting your Personal
Information. Retrieved from http://www.zappos.com/protecting-your-personal-information
Zappos. (2015). Zappos.com Associates Program. Retrieved
from http://www.zappos.com/associates-program
Zappos Labs. (2015). PinPointing: Exploring the future of
Zappos. Retrieved from http://labs.apps.zappos.com/#welcome
