Zappos Branding Strategy

Delivering Happiness; a Path to Profits, Passion and Purpose
Alligator
Firefighter

Agenda
Company Overview
Branding Strategy
Positioning Statement
Intended Experience
Insights
Target Consumer
Point of Differentiation
Zappos Customer
Secondary Business Model
Contact Points
Calder Brand Analysis
Conclusion

Zappos Overview
Headquartered in Henderson, Nevada (outside Las Vegas). 1300 Employees in FY 2008.
Recent Financials: “…we continued growing in 2009, finishing the year doing nearly $1.2 billion in gross merchandise sales.”
Categories Zappos competes in: Footwear & Related Products Retail; Catalog, Mail Order & Television Sales; Retail; Apparel & Accessories Retail; Nonstore Retail; Internet Retail
Type of company: Public. “As many of you know, back in July 2009 we announced that Amazon was acquiring Zappos…The transaction officially closed on November 1, 2009. True to their word, Amazon has continued to allow us to run Zappos independently, with our own unique culture, brand, and way of doing business. From our point of view, it's been as if we swapped out our previous board of directors with a new one, but we now have access to a lot more resources so we can continue to build the Zappos business even faster. In fact, over the past few months, we've actually seen our growth rate accelerate compared to the prior year.”
In January 2010, Zappos makes Fortune magazine's "Best Companies to Work For" list again, moving up 8 places to the #15 spot.

Zappos’s Branding Strategy: Build it from the Inside Out
Build a culture, i.e. bring the right people together and set/reinforce the right tone, so that employees embody the Zappos brand/deliver the Zappos customer.
They believe spending their resources on the right people, training, and the customer service ) are their “marketing dollars”.
It’s more expensive for Zapposto…
Only sell items in the warehouse – previously 25% of their revenues was out-of-warehouse sales
Deliver items to customers quickly at no charge to them and pay for customers to return them for a full year after purchase
Pay for 100% of their employee’s medical and dental costs
Give employees the freedom to constantly work on delighting customers
… But – Zappos believes these strategies comprise a long-term financial growth strategy.

Zappos Family Core Values (3 of 10)
By building an organization that is committed to and can deliver on brand promise (Zappos’s 10 Core Values), Zappos is then able to deliver experiences that makes its customers say, “Wow!”

Zappos’s Branding
Positioning Statement: Powered by Service
Zappos.com offers online customers unparalleled service, selection, and delivery for almost all their shopping needs.
Intended Experience:
Superior customer service for all
Desired items always available
Amazingly fast delivery with every product
they order
Company Projections/Insights
30% of all retail transactions in the U.S. projected to be online.
Company with the best service and selection will earn the lion-share (Zappos vying to be that company)
Target/Consumer Insights:
Online shoppers *Although they can target specific
customers towards their strength, footwear, they
recently partnered with Amazon and expanded
themselves to include items besides shoes,
thus expanding their target considerably.
“I love Zappos”
“The only place I would consider buying shoes from,” in fact…
“I wish that everything in my life that I ordered on the internet could be through Zappos”
“Return policy is fantastic”
“The customer service is wonderful & I’ve always had great experiences”
“Deliver fast, reliable, return stuff easily, and you guys kick butt!”

Point of Differentiation:
The Zappos Consumer
Point of Differentiation for Consumers:
Customers are more likely to be repeat buyers
Ability to deliver items quickly to customers
Free shipping both ways and 365-day, no questions-asked returns. They trust customers not to abuse the service
Only offer items physically held in their warehouses , while most retailers offer items currently out of stock
While some may argue this may eat into sales by not having customers spend money and wait for items to be shipped, Zappos has bucked the trend and decided that being able to deliver a product as fast as possible trumps those potentials loses, and in the end, provides the customer will a better experience. And most importantly, one they are more likely to repeat.
Approximately75% of Zappos sales are from repeat buyers.

Point of Differentiation:
Secondary Business Model(s)
Expanded Product Offering
After acquisition by Amazon, company has made a push into apparel as well as other product categories, including bags, accessories, and house wares, etc.
Business to Business
Marketing is more playful, customer-friendly model than competitors
Two-day $4,000 seminars on how to recreate the essence of corporate culture
Plans to relaunchZappos Insights, a Web site offering management videos and tips from staffers at a cost of $39.95 a month.
Goal: Build more buzz around the Zappos brand and it’s extreme customer service
CEO, Anthony C. Hsieh, has 1.6 million followers on Twitter (more than CBS News and the NFL) – to which he offers fans inspirational quotes, news riffs and whatever else
Management Theory
Pay call-center operators salary = $11/ hour (no bonuses or 401K matching)
(Heisch believes the most productive employees work for the psychic gratification of helping others)
Customer services reps are given plenty of freedom
Top priority to establish an emotional connection
More than 95% of Zappos’ transactions take place over
the Web, making an actual phone call a special
opportunity

Contact Points
1.) Zappos.com Website
2.)Social Badging
Zappos offers easy to use html codes that consumers can plant on any of their social networking pages, letting people know how you feel about Zappos, and giving them an contact point that isn’t as intrusive as other methods.
3.) Youtube Channel
Channel, on one of the world’s most popular websites, provides contact points for customers to see the service and experience Zappos offers.

Contact Points
4.) The Customer Service Rep
5.) Facebook
http://www.facebook.com/zappos

Contact Points
6.) Search Engine
Optimization a.k.a
“Google search”
7.) Twitter
http://www.twitter.com/zappos

Contact Points
8.) Weekly Shameless Plug9.)Word of Mouth

Contact Points
10.) Zappos Life (Catalog)11.)PR – The Good & The Bad
Good: Article on Mashable
Bad: CEO Tweets Layoffs

Calder Brand Analysis Worksheet

Conclusion
The goal is to position Zappos.com as an online service leader. If customers begin to associate the Zappos.com brand with the absolute best service, Zappos can inevitably expand into other product categories. Zappos focuses on the definition of service; work being done by one person or group that benefits another.
That’s Zappos.com; Powered by Service.

Appendix?

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Zappos Branding Strategy

by Sarahlynn Pablo

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