Case Study
Zappos
Company
profile
Zappos.com is an online service company that sells
shoes, clothing, and more. The brand is currently housed in Las Vegas, NV. The
company offers over 150,000 products and is breaking into the fashion market,
offering the same service and convenience it does with shoes. Between April and
July of 2013, Zappos generated a revenue of over $700 million (Lewis, 2013).
§ Founded in 1999, the
company was acquired by Amazon in 2009
§ Zappos products and services consist of shoes,
clothing, and accessories
§ Shoe sales account for 80%
of revenue
§ Clothing, handbags,
watches, and eyewear account for 20% of revenue
Goal
To
track and monitor e-commerce traffic, sales, and consumer behavior to analyze
the collected data, resulting in appropriated actions to achieve overall success
of the company.
Situation
It is important to note that since
its founding in 1999, Zappos has never taken a traditional approach in
marketing and promotions; rather, the company has relied on experimentation to
achieve success. Zappos focused on making consumer shopping on the site a
positive experience to turn consumers into loyal customers resulting in return
customers. Zappos cautiously monitors the behavior of its visitors to understand
if any changes are needed to make the site more user-friendly. Since its
founding, Zappos has gone on to become the world’s largest online shoe retailer
and as a result, the company has set analytic tools in place to monitor
traffic. It is vital that the brand is conscious about creating resources to
analyze important information and data that the company can use to measure and
continue its success.
Since Zappos.com is one of the largest online
retailers on the web, it is very beneficial for the company to use analytic
tools to monitor visitor traffic and customers. The company thrives off of its
online community, blog sites, social media pages and more. To monitor
e-commerce business, Zappos is using a combination of Google Analytics and
in-house software analytics to monitor visitor traffic and customers. According
to the Zappos.com website, the brand’s analytic data is analyzed by members of
its marketing team. “Through Google Analytics Zappos is able to track customer
interactions by analyzing which articles customers are visiting most
frequently, bounce rates, time on site, visitor loyalty and outcomes. Outcomes
can really be whatever Zappos has determined to be a valuable goal for their
business, but from an analyst’s point of view it would appear to be a blog
subscription or a purchase at the very minimum” (Johnson, 2013).
On the main e-commerce site,
Zappos monitors consumer engagement, consumer behavior, traffic, keyword
searches, and conversions. Monitoring the data collected revealed that over 75%
of Zappos’ business comes from repeat customers (Quesenberry, 2010). Monitoring this data can
assist Zappos in determining any problems or issues that the site may be having
or is causing them to lose sales and can also assist in implementing forms of
action to fix the items in a timely manner.
Goal Achievement
Zappos uses Google
Analytics to track and monitor traffic and sales generated by each keyword,
letting them know which terms are working and which need to be changed. Zappos
can use Google Analytics in addition to their in-house analytics to compare
analytic data to show any trends worth pursuing and choosing what data needs to
be a priority in order to improve search engine optimization.
According
to the Director of Direct and Online Marketing for the company, Darren Shamo,
Zappos monitors data collected on what customers are looking at while on the
e-commerce site, and uses the collected information to create customized
advertising that the company believes the customer will deem useful. Shamo
states that in order for the brand to avoid being viewed as “creepy” an ad will
never feature the exact product a customer was viewing on the site (Demery,
2012). Instead, it will take the analytics
data it collects on what customers view the Zappos.com website and “dumb it
down” through its product recommendation engine to pitch ads for a range of merchandise
a consumer is likely to purchase. “A shopper who showed a clear preference for
a pair of Nike “Free Run+ 3” running shoes in gray and red trim, for instance,
may see a retargeted ad for several similar products in multiple brands and
styles—but not the exact same Nike shoe she had checked out on Zappos—while later
visiting another web site” (Demery, 2012).
“Showing people exactly what they had seen, and producing more targeted
ad content always converts better... [b]ut we back away from the revenue
opportunity for the sole purpose of improving the customer experience. We feel
that, long term, we’ll get more customers and more sales” (Demery, 2012).
Benefits
Utilizing analytic tools allow Zappos to view all metrics that are relevant to the online store and all web traffic generated. A few examples of the metrics that are measured are:
·
Ecommerce Conversions to check conversion rates
for each product
·
Engaged Visitors to understand why visitors
are on the Zappos site
·
Readers to configure the amount of
users that are visiting more than one page
·
Calls to Action to determine how many
calls to action Zappos shoppers complete
·
Bounce Rate to determine how many
viewers are visiting the site without taking time to view more than one page
Zappos collects the
information from Google Analytics and its in-house web analytics tools to
ensure that the data collected is accurate, timely, and precise. Using several analytics tools to gain insight increases the
company’s probability of interpreting the data correctly to make the
appropriate decisions. For instance, if Google Analytics reported that the
company’s sales increased by 20%, Kissmetrics reported sales increased by 25%
and Clicky reported sales increased by 30% then the company can ensure that
sales have increased by an amount greater than 20%.
Technical Skills
Zappos is not shy about what it looks for in its employees. The company publicly
lists the desired skills potential employees should have in order to perform analytic
job functions successfully. Zappos states Marketing Analytics should “... serve
as a support function to all marketing channels to validate and certify all
data sources. We also like to get our hands dirty by running complex analysis
and set channel targets required to balance the media mix. Desired skills:
analytics, Microsoft Excel, SAS, R, SQL” (Zappos, n.d.).
Results
Zappos has delicately created a
balance to provide customer satisfaction without compromising sales and
merchandise. Zappos’ mission to deliver WOW service is productive as a result
of carefully monitoring its analytics and using the information to make positive
changes that will continue to attract and appeal to the brand’s customers and
create a loyal, returning customer base.
References
Demery, Paul. (2012). How Zappos
balances privacy and targeted ads. Retrieved on February 23, 2014 from http://www.internetretailer.com/2012/10/19/how-zappos-balances-privacy-and-targeted-ads
Johnson, E. (2013, December
9). Zappos uses web analytics to fuel the marketing engine. Retrieved from http://analyticsinsight.blogspot.com/2013/12/zappos-uses-web-analytics-to-fuel.html
Lewis, S. (2013, August
20). Can zappos bulldoze the brick-and-mortar shopping model? Retrieved from http://www.retailsolutionsonline.com/doc/can-zappos-bulldoze-the-brick-and-mortar-shopping-model-0001
Quesenberry, Keith A. (2010). Walk a mile in zappos’ new
media shoes. Retrieved from http://addingtonoise.wordpress.com/2010/03/23/walk-a-mile-in-zappos-new-media-shoes/
Zappos. (n.d.). Zappos
marketing analytics. Retrieved 2014, November 12 from https://jobs.zappos.com/careers/marketing