Video Case Zappos: Direct and Online Marketing

Video Case – Zappos: Direct and Online Marketing

Running time: 8:55

Video Summary

Zappos spends almost no money on advertising—it doesn’t have to. Customers are so enamored with the company, they keep coming back. And they keep telling their friends. Instead of mass media advertising, Zappos focuses on strengthening customer relationships through marketing directly to customers. Like its impeccable customer service, the company’s unique promotional methods are valued by customers. When Zappos sends out an e-mail or a Tweet, customers listen. Its strength in direct marketing, combined with user-friendly Web design, have made Zappos one of the strongest retailers anywhere.

Discussion Questions

1. What benefits has Zappos gained by marketing directly to customers rather than engaging heavily in mass-market advertising?

This video focuses on search engine marketing rather than on direct marketing.

1. What role does database technology play in Zappos’ ability to connect with its customers?
   The video does not discuss the role of databases in Zappos’ strategy. However, as a mass online retailer, it is a given that Zappos maintains a database. Not only would it need to have a database to keep track of basic customer information, but it is also evident from the chapter 11 video that Zappos can put specific customer information into each individual’s account file that allow the company to really get to know customers. Such information could include everything from customer browsing patterns on the website to a phone rep putting in a comment about a customer’s preference for a certain style or color of shoe.

1. Discuss Zappos Web site from the perspective of the seven elements of effective Web design. What are its strengths and weaknesses?

This may be best answered by having students visit Zappos.com. Be sure to note that all websites include context and content. But the other five elements of web design are variable.
Content: text, pictures, and videos (customer videos in the “Zappos Experience”). It should be noted that for each product, the images are high quality with views from every angle and provide for zoom magnification.

Context: the site’s layout is organized so that customers are very aware that it is an ecommerce site. Customers can search for merchandise by keyword, or browse based on product category, brand, shoe size, lifestyle, or by gender. Zappos makes browsing easy by also providing an alphabetical brand index. These features are at the top of every Zappos page. From the main page, Zappos has additional options such as featured items, recommended items, top sellers, and new items.

Community: blogs and “Share this product.”

Customization: for return customers, the site recommends items to the individual. Account information includes a “My Favorites” list, order history, etc.

Communication: Any customer can provide a review for any product. There is also an 800 number and “Live help.”

Connection: from the main page, there are links to Zappos specialty sites, including Couture, Rideshop, Running, and Outdoor.

Commerce: the primary function of the site.

Quiz

1. According to Aaron Magness, Director of Brand Marketing and Business Development at Zappos, what is the current learning focus of the company?
2. They are paying more attention to their competitors.
3. They are listening to the views of the employees on improving the level of service.
4. They are coping with the rising costs of marketing.
5. They are studying the shopping behavior of customers.

Answer: d

Explanation: According to Aaron Magness, Director of Brand Marketing and Business Development at Zappos, the company does not pay attention to who its competitors are. In his words, “What we are learning now is ‘how do customers actually shop for this lot?’”

1. According to Darrin Shamo, Senior SEM Manager at Zappos, what was the primary marketing focus of Zappos during the initial stages of its business?
2. events and PR
3. TV advertising
4. word-of-mouth
5. search engine optimization

Answer: c

Explanation: Darrin Shamo, Senior SEM Manager at Zappos has explained in the video that during the earlier stages of Zappos, the company’s marketing strategy was primarily focused on word-of-mouth with the aim of mobilizing its customers and community.

1. What is the major challenge faced by Zappos when there is a change in the economic climate?

1. Traditional shopping gains precedence over online shopping.
2. Marketing costs rise even though the overlap costs are low.
3. Customers shift slowly to comparison engines from search engines.
4. Impulsive purchases become a high-involvement exercise.

Answer: d

Explanation: According to Darrin Shamo, Senior SEM Manager at Zappos, whenever there is a change in economic climate, there is also a frequent change in consumer behavior. What normally would have been an impulse buy becomes a high-involvement exercise.

1. In the video, Darrin Shamo explains that the key focus of Zappos is to “catch those customers at the moment they are ready to purchase.” Which of the following refers to that moment?
2. when the customer types in a query (product name) in the search engine
3. when the customer clicks on the ads on the top or sides of the search engine
4. when the customer fills in the shopping cart with an intention to order
5. when the customer finally arrives at the till or online payment gateway

Answer: b

Explanation: Zappos creates and publishes ads on search engines like Google. These ads may be listed on the top or sides of the search engine, and the company pays for every click that occurs on the ad. According to Darrin Shamo, Senior SEM Manager at Zappos, “this is the point where we capture that user.”

1. Normal search engines are different to comparison search engines, in that ______.
2. comparison search engines are feed-based
3. products are not aggregated or indexed in comparison engines
4. comparison search engines provide geo-targeting facility
5. normal search engines enable easier customer segmentation

Answer: a

Explanation: Normal search engines are different to comparison search engines. In comparison search engines, which are basically feed-based, everyday, Zappos professionals need to aggregate or index their products.