Welcome!

Web 2.0 Authors: Pat Romanski, Esmeralda Swartz, Kevin Benedict, Tim Hinds, Shelly Palmer

Related Topics: CRM, Web 2.0, Open Web

CRM: News Item

If the Shoe Fits...Zappos’ Secret to Amazon Deal

Zappos CEO reveals his secrets in an Exclusive interview for MeettheBoss.com

During the interview recorded earlier this year Hsieh divulges innovations he has made to Zappos to grow the business from nearly no sales in 1999 to over $1Billion in gross merchandise sales in 2008. Hseih states ‘The number one driver of that growth has been through repeat customers and word of mouth.’ He also shares his secrets to improving company culture through recruitment and to his Marketing Strategies. ‘Most of the money that we would of spent on paid advertising we put into the customer experience......Any costs that we put into investing in the customer experience ends up driving that repeat customer behavior and word of mouth, so we think of it as an in direct marketing cost’. And he clearly was on the right track as Amazon digs deep to increase market share.

With $23 billion in annual sales generated by footwear and apparel online, Amazon appears to have made the move with money in mind. According to Forrester, this sector tops the hyper competitive PC market, ($16 billion) and consumer electronics ($11 billion). This has always been an area where Amazon has been lacking, but today’s purchase of Zappos is perhaps the most obvious admission of its failure to dominate this lucrative sector. In this respect, the deal makes sense. "They've been trying to do it for years with very little success," said Sucharita Mulpuru, a Forrester Research analyst.

Whilst Amazon has stated that they aren’t ‘disappointed’ with the performance of Endless.com (their presence in this market), this move is clearly an indicator of the company’s desire to become a more prominent player in certain areas of online retailing.

The move has, however, prompted some critics to question Amazon’s motives. Is it purely a case of profit and turnover that has led Amazon to tap into a sector in which they weren’t “King of the Hill”? Or, as some are speculating, is it perhaps a pre-emptive maneuver to prevent one of the most celebrated online retailers from expanding their repertoire into segments that Amazon has traditionally dominated?

After all, Amazon themselves started as an online bookshop before rapidly expanding into sector after sector. As a shopping option Amazon is engrained into our lives as the de facto choice for online purchasing, a podium place they simply cannot afford to share.

Both companies have shown a resilience and sustainability even in the most challenging of times, which is good reason for such attention from not only Silicon Valley, but the financial and retail titans.

For more information or to see the exclusive video go to MeettheBoss http://www.meettheboss.com/amazon-buys-zappos.html

More Stories By John Funnell

John Funnell has worked in online media for over ten years, after achieving his First Class BSC Hons Degree (BBC Sponsored), John won Bos 18-21 Princess Trust Entrepeneur of the year at 21, setting up Clean Living Records Ltd (including www.BeatReview.com) with great success having many acts that charted in Europe and Canada. After selling the business John looked for a new challenge and joined GDS International, having a successful career in sales and Delegate acquisition, he worked up to Event Director EMEA, forging contacts with some of the biggest technology names in the world, this lead to John having a lead role in the creation of MeettheBoss.com and MeettheBoss.tv – the worlds largest business IPTV channel. John then took over as Marketing and Communications Director and ran a multifaceted global Marketing team for GDS International in New York, Sydney, Kuala Lumper and the UK.. John joined Global in 2011 with the challenge of supporting its growth by developing a solid Marketing foundation through various Digital, PR and brand initiatives.