During CES last week, ClickZ stopped by Zappos HQ in Downtown Las Vegas to talk with 16-year veteran Matt Burchard about how the company has evolved over the years.
If Matt Burchard’s job were a person, it would have a driver license, the ability to see R-rated movies and most likely, an attitude problem. During a time when top-level marketers move around like trading cards, Matt Burchard has been at Zappos, where he is the senior director of marketing and customer experience, since 1999. It’s not that Burchard is complacent and going through the motions; he just thinks his employer is a really good one.
It makes sense that Zappos treats its own very well, given that customer service is as much its signature as selling shoes online. In 2003, the company opened up a fulfillment center in Shepherdsville, Kentucky. It seems like a random location, nearly 2,300 miles from the brand’s headquarters, then in San Francisco, but it’s very close to one of the country’s main UPS hubs, ensuring faster shipping.
“[The move] allowed us to evolve our value proposition by under-promising and over-delivering with regard to the delivery of goods,” says Burchard. “For the most part, we’re selling products you could buy elsewhere so we needed something to differentiate.”
Customer service was the genesis of free returns, which helped it secure market share. It was also indirectly the reason the company has never deleted negative reviews, building trust.
The evolution of content
Most of Burchard’s roles within Zappos have been related to content: director of content; director of content and direct online marketing; senior director of content, direct online marketing and user experience (UX). He more or less built the content department from scratch, something that’s barely recognizable from the early 2000s.
“The content was originally the product information team setting up product pages and landing pages, and the trudgery of putting in UPC codes and writing descriptions,” says Burchard, who says it started to change around 2006. “The brand impact allowed for taking some creative license, and being a bit whimsical, a bit offbeat and optimized for SEO.”
Zappos’ content strategy no longer lives within that specific team. Employees across every department are encouraged to create content in the name of the brand; Burchard would eventually like Zappos.com to become a destination website.
“We feature information about what you’re buying, but also the brand, what we stand for and what we’re doing in the world,” says Burchard. “Beyond our service and offerings, the goal of the brand is to create content that’s unique and compelling so you’re not just buying stuff from us.”
The same is true for Zappos’ social presence. The brand does well with Snapchat precisely because it understands that that particular platform isn’t made for being transactional. Facebook is probably the platform that delivers the most ROI, though its Twitter presence is also very strong.
“We were ahead of the curve on Twitter because Tony understood the value of creating personal connections in this medium very early on,” adds Burchard.
Social also adds to the brand’s customer service experience. While many companies’ Tweets to consumers read as sterile and formulaic, if they even do them at all, Zappos are clearly written by a person, one who happens to be extremely engaged with his or her fans.
Viva Las Vegas
Another example of evolution is its location. Two years after Zappos was founded, it opened up a few brick-and-mortar locations to appease vendors, who were dropped two years later, despite the fact that drop shipping accounted for 25 percent of the company’s revenue base: $70 million in gross sales at the time. It was a leap of faith, but the company’s chief executive Tony Hsieh was adamant that in order to have the best customer service possible, Zappos had to own the entire experience.
The next year, with gross sales all the way up to $184 million, Zappos moved from San Francisco to Henderson, Nevada, the principal suburb of Las Vegas.
Burchard remembers moving to Vegas with his family “kicking and screaming,” though it’s since grown on him. The cost of living and commute are far preferable to those in his native Bay Area. There’s also the city’s lack of pretense and the weather, which can feel like Hell on Earth, but only for a few weeks. All the others are still sunny and warm enough to allow for year-round golfing and other outdoor activities, such as the hiking many people don’t even realize Las Vegas offers.
I used to live in Las Vegas, having moved there to do my graduate school project from the University of Oregon – Burchard is a fellow Duck, which was my icebreaker when I first stalked him on LinkedIn to set this interview up – and I asked about my favorite place, Red Rock Canyon. He agreed that it’s a hidden gem and added that “there’s such a stigma that Vegas is this dead desert, but the nature here is beautiful.”
Las Vegas was also important to the brand’s evolution for another reason: it’s not Seattle. By 2009, Zappos’ gross annual sales were more than $1 billion and Amazon bought the company.
As an e-commerce brand, it can only help to be acquired by Amazon, the obvious king of that realm. But being headquartered elsewhere has allowed Zappos to maintain a more independent identity.
“[Amazon has] the best and brightest; it’s a definite upside to have them as thought-partners and leaders to bounce ideas off. We lean upon them heavily, but by virtue of being in a different market, we have the autonomy to do different things for our business and that’s great,” says Burchard.
“The more things change, the more they stay the same”
Zappos started as ShoeSite in 1998, “the poster child for a bad 1990s Internet idea,” as Burchard puts it. At that time, 42 percent of American households even had computers and only 26 percent had Internet access, according to a census report from 2001.
But the tables have turned completely. Online shopping beat out physical shopping during the last holiday season and brick-and-mortar is almost seen as an afterthought for many companies. And of course, ShoeSite is Zappos, by now a household name.
Having gotten in on the ground floor, Zappos has already mastered e-commerce and is already looking ahead, focusing on mobile commerce. Virtual reality-integrated product pages aren’t out of the question down the line, either.
But ultimately, Zappos is the same company it always was.
“We encourage people to call in and we want to embrace people, but the brand doesn’t naturally interact with people the way a department store like Bloomingdale’s does,” says Burchard. “The biggest challenge has always been building a service-based brand where we don’t compete on price, but we have a core group of customers who trust us and keep coming back in a world where most of what you can buy on Zappos, you can buy elsewhere.”
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