ZAPPOS IS ADVERTISING ON TV?

[DISCLAIMER: I have Tivo, so they may have been advertising for quite a while. I just saw it during Top Chef. Where my favorite chef, Jenn from coco500, got kicked off! Coco500 is like my office away from home so I'm highly loyal. But I digress...]

Back to Zappos: Um.....what year is this? If you want to feel like it's 1999, read this About Us page.

I thought we'd proven by now that TV advertising is not a cost effective way to build an
online brand. Particularly one that's been around for a zillion years and shouldn't need it. Why when the rest of the world is getting disenchanted with TV ads does a dot com jump on the bandwagon??? That's like a blogger suddenly craving newsprint.

I was always a bit dubious about Zappos despite the Sequoia-induced hype. They're one of those weird dotcom-web 2.0 sandwich companies that are good enough for a "nice business" and maybe even a great VC exit, but don't seem to really get it. They just haven't evolved along with the Web, if you know what I mean. (OPEN TABLE DO YOU HEAR ME???? You are NOT a Web 2.0 company. You are a software business with a Web interface. But that's a subject for a future post.)

I mean, a world of shoes online? Great. But browsing and the experience is a huge problem. Even the CEO admits it here. I don't think the new interface is much better, and the strategy to become the Amazon.com of apparel seems it will only clutter it up more.

This is not shopping for a book. People like to try shoes on. I got my husband some shoes on Zappos a few years ago. I knew exactly what I wanted to get him, and didn't have time to go from mall store to mall store, so I figured it was great case for Zappos. TOO SMALL! They hurt his feet. Not enough to deal with the hassle of shipping them back, but enough that they sit in the closet and enough that I decided shoe shopping was possibly the only category of ecommerce not for me. (And, if you could check my tab at Intermix, you'd know that's saying something.)

According to their site Zappos is nearing $1 billion in sales. No idea how profitable they are, but they don't seem to be a very lean company. Still, I have no doubt Zappos will be a good exit for their investors (ahem, nine years after they were funded?) But I'd never buy the stock. At best it's a Netflix. An incremental step toward progress in shoe shopping, but hardly a great, scaling, defensible business. And, to me, resorting to spamming Bravo with TV ads makes that somewhat desparate point more pronounced.

Comments

[Brian]

Hi Sarah,

I do think Zappos is a different company, and worthy of a longer look. The big difference I have experienced with Zappos is the above and beyond customer service and order execution. Every person I have ever dealt with while ordering from Zappos is actually happy to speak with me -- I mean, it's bordering on strange to have a customer service person go so far out of their way to help. With Amazon, I can't even find a number to call or a person to talk to! You should consider giving their service another shot. My guess is that they will exceed your expectations.

[sarah lacy]

brian:

i get what you are saying. and it's a good point. i understand that is the thing the company is most proud of-- and they seem to invest a lot in service. that's very admirable and rare in an ecommerce play-- or really any business.
but if i can't browse the site and am not enticed by the value proposition of buying shoes online-- i can't *get* to a customer service rep. also, i keep hearing from people how it's so easy to return stuff or customer service people help you solve a problem. what does it say that those problems are so rampant in the first place? the point is, i use amazon all the time and never NEED to use customer service.

[Tony Hsieh - CEO Zappos.com]

Hi Sarah,

The point of our recent TV ads was to try to get journalists and bloggers to write about us. Apparently it worked.

Just kidding. :)

In all seriousness, if you ever want to hear the Zappos perspective and how we're thinking internally of growing Zappos to be a brand that's about the very best customer service, I'd be more than happy to talk by phone or give you a tour of our offices in Las Vegas.

You can reach me by email at tony [at] zappos.com.

-Tony

[Melanie]

Hi Sarah,

First off, I agree about TV ads. not the way to go at all. TV, in its current form, is the antithesis of partcipation.

I'm an avid runner and Twitterer and was really impressed with what they were doing in Twitter. Not simply arriving and spamming users with advertising for theirs site but offering prizes and trips and etc to followers. Their CEO and his team all have Twitter accounts and the company has a pretty fun blog.

Those kinds of things stand out to me as being fairly current.

There are a lot of companies that haven't even heard of Twitter and are terrified of blogs.

PS - you have no email listed. is there any other way to contact you than joining one of your networks?

[GeekMommy]

You know, a few years back, I would've agreed with you about buying shoes online.
But then more and more of my friends kept raving about Zappos.com - and honestly? There's a reason that they're still around.
It's because of the ease of return - and the level of customer service.

I have absolutely no association with them other than as a customer.
But after noting that Zappos was on Twitter - I polled an online moms group I've been a member of for more than 6 years now - better than 30% of them regularly use Zappos - and nothing but positive feedback.

Because there are some of us who find the convenience of free door-to-door shipping and return combined with overwhelming selection and fabulous customer service to be more appealing than driving to multiple chain shoe stores or department stores hoping that the shoe is there and in the right size.

Honesly? I think you need to give Zappos another try before you write it off.

[sarah lacy]

tony!

first off- it's rad that you care about your brand so much you are responding to bloggers on a sunday!

I don't get to vegas much but i'd love to sit down next time you are in the bay area. maybe film an interview for tech ticker? i could post it here, and if i'm utterly wrong about zappos eat crow ;)

i'll ping you by email, but wanted to give you public props for the comment!

s

[sarah lacy]

oh and @melanie:

it's sarah at sarahlacy dot com. i have been meaning to add it. thanks for the comment!

[Matthew]

I know we'd love to know what issues or suggestions you might have with the Zappos navigation. If you get a chance, add your comments in our User Experience survey for http://zeta.zappos.com at http://www.surveymonkey.com/s.aspx?sm=2RTHNDSJBCi8Og8nuFXwAg_3d_3d

[Mark Disbrow]

Just a note from a former zappos.com employee. You have no idea how well the company treats not only the customers but the employees. I don't beleive they need the ads to bring people to their site. The amount of customers on zappos.com is growing all the time. I think the ads are more for a fun way to bring this great site to more people "the ones that can catch a commercial once a week but dont have time to go to the mall". I don't think you are being fair and you should seriously consider taking Tony up on his offer to talk. I know you will get a better understanding of how well this company operates.

[skatie]

Hi Sarah,

I think you're way off base with this. I have other critiques of their ads, and its more along the lines of the marketing is off. It doesn't tell those non-online shoppers just what or who zappos is.

As for "I thought we'd proven by now that TV advertising is not a cost effective way to build an
online brand. Particularly one that's been around for a zillion years and shouldn't need it." Who is this 'we' and how/when was this proven? Take CafePress for instance. Do you know what they're up to lately? Does your mom know what they do? They could have a much larger market saturation if only they advertised to the non-online masses.

I'd really love to see how you came to the "I thought we'd proven by now that TV advertising is not a cost effective way to build an
online brand" perspective.

[Kendie Hoden]

Just a thought, TV may not be for you or forward thinking Web 2.0 people. But keep in mind, more people in the US watch TV than actively use "2.0" sites that you write for.

Didn't matter what they sold. The spot made me smile.

[Velma]

I think you are missing something basic when you are talking about the Zappos (or any other apparel) on-line shopping experience. Unlike with a book or CD, you take an inherent chance in shopping on-line that the size or color or whatever won't be what you expected, and it is precisely the ease of return that sets certain companies above the rest.

I also disagree that TV is an ineffective method of advertising for companies like Zappos. These days, the non-tech savvy people I know (like my parents) see an ad on TV and then ask one of their kids first about the company. If they get a positive review from one of us, they'll go on-line to check it out.

[Soren]

I kind of think you grabbed the wrong message from the article about the interface. The sentence in there that, to me, defines Zappos is this one:

"the core of the company's mind-set: find out what the customer wants, and find the best way to deliver it"

Zappos does this through a variety of touch points, but as far as I can tell, mostly through viral and social methods.

I have, for example, taken part in conversations, via Twitter, with the CEO about things as varied as this article and potential new ads.

I feel like I have a relationship with the CEO, and by extension the company. When I see an ad on tv, I don't think "there is a Zappos ad", I think "there is an ad for my friend Tony's company".

How many companies, web based or not, can say that?

[jodi]

I totally understand what you mean, but as someone with a very hard to find shoe size, buying online is often my only alternative. So, when I do buy shoes, I look for a large selection and a generous return policy, which Zappos (as well as Nordstrom) offer.

[IMHO]

Great points here, would like to add, if I was not already familiar with Zappos, the commercial would not have helped me in any way. The commercial does not do this company justice (nor does it reveal what Zappos is or does).

In addition, I think it is a bad move to set the video to automatically play on their home page. I visited zappos.com and was startled by the video which began playing without my approval. Not cool :(

[sarah lacy]

@velma: first off, love the name! it was my grandmother's name and you never hear it these days!

second- it's not that TV won't reach people it's the cost effectiveness of it. it's the most expensive form of reaching a consumer. it seems the company is better served through things like the twitter campaign driving early adopters to then evangelize zappos to their parents. that's how firefox has spread.

thanks for the comment!

[Alan]

Sarah: You've unfortunately fallen into the trap of "my experience is clearly a universal one and of course everyone thinks like me."

I might not buy shoes online either, for the very reason you stated, but $1 billion of sales says we're clearly in the minority here.

TV might not reach you, me or any of our internet savvy peers, but I bet most of the people who buy shoes actually do watch TV and TV is still the prime mass media vehicle in the US and a very smart way to talk to people who might miss you online. Zappos is very different than Firefox (your example) in that it's selling a product which has a much larger potential audience, and audience who is used to seeing shoe ads on TV.

Mass market consumer goods products (like Zappos) are well served by TV advertising, despite the high costs. Twitter, WOM, evangelists, etc. are definitely good additions to the mix (Their Twitter campaign, in particular, is outstanding) but TV will give them a higher profile and allow them to establish credibility with a broader audience.

TV ads also serve the very important function of giving Zappos credibility with this non-internet savvy audience-- e.g. a brand that's running ads during their favorite shows is clearly not some fly-by-night Web 1.0 venture and might actually be worth checking out. Well done, high production TV advertising still adds status to a brand (again, not with you perhaps, but with a great majority of Americans.)

My main critique of the TV ads is that they assume the viewer is familiar with Zappos and what they do. And that they rely on a strong graphic treatment that currently only lives on the TV spots (as opposed to the packaging, website, print ads, etc.)

I hear you about the interface as well, but it seems that they are also aware of that issue and currently working on improving it.

[jb]

Great post. I don't think I've read something this insightful about zappos before. But I'd say that you're missing (a) what the company's about and (b) what the tv ads hope to accomplish.

With regards to the first point, for many people, they are 'the' online shoe store, because they're the only ones with the policies, selection, and service to make it worthwhile. Nobody, online or b&m can match that mix.

On to the ads, the company's been around a long while. They have to grow. A lot of their potential customers aren't incredibly web savvy and they don't have the kind of gravitational force amazon does to draw in an a wider and wider group. A quick blast of TV ads, perhaps combined with a low key, long term campaign, makes sense. But I haven't seen the ads, so I have no idea what their execution is like.

[sarah lacy]

hey everyone-

love that the conversation has continued. I had to step out for a bit and won't bore everyone by responding to every single comment but I'm reading them all and processing them. Interesting to me how many people feel I'm wrong about my experience but right about either the user experience or the ad strategy. again, struck by the passion about zappos. didn't buy my shoes tonight (per my second post) but i will this week!

btw- at a dinner party tonight i got a lot of s**t for not loving zappos more too!! totally unsolicited! you guys aren't alone... :)

s

[Kendie Hoden]

@ Alan. Incredible detail, great comment! Check out their new print ads, just saw something over the weekend and it really does tie in well with their TV spot. Also, digging into their new site you can see some of it coming across there in bits and pieces.

[Brett]

More information on the Zappos topic here: http://tinyurl.com/2tcnbl

[Sharon]

I know it's months later, but I didn't see this in the comments, so here goes:

So the reason you're uncomfortable with Zappos, that is buying shoes online, is you feel that returning the shoes would be too much trouble.

But see that's the standard consumer experience that has been pounded into our heads on how a transaction goes - it is expected by us that returns are hard. They won't take them back or we have to pay for shipping or they will ask us why we want to return them, etc etc.

In other words, the consumer experience in returns, especially online returns, has not been good one and we seem to consider that normal and the standard.

I think what Zappos is doing, is breaking down that assumption - we've been hoodwinked as consumers to think that is normal customer service, but it's NOT, and Zappos recognizes that and is trying a different way.

Returns are easy at Zappos. They are only hard in your head because of the way the consumer culture has told us they are hard.