Question

On the Job: Zappos' Retail Experiment Selfies as a Sales Tool



>> Will, you're based out in San Francisco.

>> Yep.

>> You've got a dozen people working in this Zappos Skunkworks. What are you doing out there?

>> Yeah, I think we created this labs office because we've seen just retail and ecommerce change so quickly. You know--

>> But surely Zappos is already at the forefront of ecommerce.

>> Yeah. And I think what we do exceptionally well is if you want those black beautiful dress shoes and you have them in mind, you come to Zappos and you type black dress shoes. We find them for you, we ship them to you next day, we're amazing, great customer service. I think as we're trying to evolve our brand is we look at like people are spending so much time on Pinterest and Instagram. What does that mean to Zappos as a brand. And so that's one of the things we really think about as a retailer.

>> Yeah, as you think about people like us who use it, as you say, to deliver a product, now you're trying to transition us to make it part of our lifestyle. Is that?

>> I wouldn't say transition because it doesn't have to be either or, right? We're never going to stop being that amazing experience when you want to find great black dress shoes, a nice suit. Some people are surprised we sell suits and wedding dresses on Zappos. So, the works. I think as we're seeing just consumer behavior change and people obviously move to their phones, what does that mean to that shopping experience?

>> Will, you make an important point. Mark and I might shop with our phones but we're not likely to do that much shopping with our phone. My kids, on the other hand--

>> Absolutely.

>> And Mark's do a lot of shopping on their phones. You're trying to reach the millennials and even the next generation. How do you do that?

>> I think it's, to kind of, I think in the early days when everyone saw Facebook being big and Pinterest blowing up, every big retailer's like let's build our own social network. And I think everyone failed at that, including us. So, it really was, like, how do we be a natural part of that conversation. So we've, people are doing stuff naturally on Instagram, for example.

>> Like what? Posting selfies.

>> Selfies. And it's, I think to us older folks, like, we kind of joke about it but there's this hashtag on Instagram called OOTD. You know, they do the hashtag OOTD. It stands for outfit of the day.

>> And you do this every day, right?

>> Every day. And I get an opinion. Pink tie, purple tie. But there's 30 million pictures on Instagram with that hashtag.

>> Seriously?

>> 30 million.

>> 30 million.

>> So, it's 30 million, or 30 million pictures that've said this is my style, this is what I care about, and I want the world to know. As a retailer, how do we not be a part of that conversation, right?

>> Embrace the narcissism.

>> And actually, I would call it self-expression. I call it self-expression.

>> But how do you become a part of that? As a retailer, how do you get your brand to be tied to those things?

>> Absolutely. So one of the, we did a small pilot a couple months ago and we saw some really interesting engagement. We asked actually people, you're already going an outfit picture. We don't want you to do anything else. Just add the hashtag, Next OOTD. And that was a signal to Zappos, Zappos, look in my Instagram account and make a personalized recommendation for me. So, that's what we did. So we actually, and you know, Zappos is very good at doing things manual. We're famous for 10 and a half hour phone calls in our call center. So, when we see someone do that hashtag, we actually look in their Instagram account, look at what they wear, look at their friends' style, look at the places they go and make some recommendations. And we have a huge catalog, 180,000 items.

>> Okay.

>> And we just take, like, we think you'll like--

>> What's the follow through like, though? When you make, when those recommendations are made to these people who put hashtag NOOTD--

>> Yeah, and--

>> What do they do? Do they shop?

>> So we've seen them, they all go to the recommendations. And it's interesting, I think, that a thing we're seeing is if you're on Instagram, you might check out one of our recommendations. And you don't necessarily feel like buying right away. Because, you know, you're on Instagram. I think a lot of, we've heard a lot of feedback, like Zappos sells clothing? Like, that's a big surprise to a lot of people. You know, because we're known for shoes, and--

>> But, Will, is it a bot that's creating that?

>> No.

>> Or is it a human?

>> It's a stylist on our end.

>> Yeah, see that's cool, because now we're going to create jobs. So it's not that technology is going to take the jobs away. This actually is going to create jobs.

>> Absolutely.

>> And cool jobs. Stylist jobs.

>> And a big reason we moved our headquarters to Las Vegas. Our lab team is in San Francisco. A big reason we moved the headquarters to Las Vegas is to grow our call center locally and not outsource it. And so we actually have stylists that are kind of on our team that do some of these stylist recommendations as well.

>> What interests me about this, though, is it is very commercially focused. There are a lot of companies that spend time on social media trying to build brand awareness, loyalty, affinity, without any real sense as to whether there's a clickthrough or a follow through. That seems to be different at Zappos.

>> Well, I think we do both. I think building brand affinity's extremely important. I think if you look at our huge investment in our call center, it's hard to measure the ROI. Like, when we do a 10-hour phone call with a customer who just wants to talk for 10 hours, like, you can't measure that. There's no immediate short-term ROI.

>> It's, I would venture to say it might be negative.

>> Exactly, right?

>> That's a lot of sales.

>> But it becomes, like, the story of legend. It becomes, like, the old-fashioned way of brand building, word of mouth and all that stuff. So, people tell their friends and--

>> Well, it's Nordstrom-esque.

>> Yeah, I would absolutely say--

>> It's Nordstrom-esque and if you can achieve that level of branding and be the go-to store--

>> Absolutely.

>> Or you're not a store. A go-to experience?

>> Yeah, I would say we're a whole experience. A shopping experience online for people. And I think it's, yeah. So, Zappos, I think we started with shoes but developed a lot--

Discussion Questions:

1. When customers use the hash tag #nextOOTD, who is initiating the communication? Describe how the communication process works in this instance, including times when noise may occur and the likely nature of the noise. Is this one-way or two-way communication?
2. When customers use the hash tag #nextOOTD, is this an information pull or an information push? How would this Zappos product be different if it was the opposite kind?
3. When Zappos uses Instagram to send customers outfit recommendations, how rich is this medium of communication?

Answer 1

when customers use the hashtag #nextOOTD, the communication is initiated by customers since they are the ones connecting with the online campaign. The communication process works when the customer puts #nextOOTD on Instagram which gets picks up by Zappos whose algorithm proceeds to check the Instagram photos of the person. The algorithm works out the style of the person according to his photographs and suggests new outfits from their vast catalogue. Noise may occur in the way many people may just want to see recommendation instead of buying or many persons just want to go with the flow of hashtags. This is a two-way communication.

This is an information pull since information is mined from the users Instagram photos. If it were information push, then various styles will be displayed to users screen for their perusal. Zappos will then be like any other retailer, advertising its products for the users on social media.

This medium of communication is very useful for consumers to communicate and for companies to engage with customers. Instagram is a photo-sharing media where people want to loo good. Hence it makes sense for companies to target consumers ion Instagram Therefore, for fashion industry, the level of richness for Instagram will be high.