The e-retailer reports a $126 million net loss, stemming from a $640 million year-over-year increase in spending in the quarter on technology and content ...
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In preparation for this year’s new site, currently in beta version at zeta.zappos.com, Zappos started developing an open-source MySQL database system for improved data flow among product databases and a more effective site search feature. Although the new site wasn’t scheduled to launch until holiday season ’08, Zappos started working on the new site and MySQL project in July 2007. It halted the project last fall to get through the holiday season, picking it up again in February. “We figured site search would be our biggest bottleneck on the new site, and after the 2007 holiday season we confirmed that we needed new search,” Crowley says.
As Zappos and other retailers realize, succeeding in the peak holiday season has a lot to do with meeting if not exceeding customer expectations in service as well as product quality. Careful planning of technology projects is one thing, but managing customer expectations can be quite another.
Zappos altered its fulfillment processes as well as its web site a couple of years ago to upgrade its free-shipping program to promise free overnight shipping on both orders and returns, which supported its emphasis on customer service. But it won’t offer free overnight shipping in the ’08 holiday season because when shoppers expect it upfront, surveys have shown they don’t appreciate it as much as when orders arrived sooner than expected. So Zappos has returned to its former policy of promising free general shipping, but automatically upgrading it to overnight at no charge. The policy supports a strategy at 9-year-old Zappos, which expects to do about $1 billion this year in gross merchandise sales, to surprise customers with better than expected service.
The retailer takes a similar approach in its contact center. Zappos operates a contact center with what it calls its “customer loyalty” team of about 440 agents, which it plans to expand to 500 by October. Its expanded staff includes employees from other departments like merchandising who temporarily help manage the phones and e-mail communications during the holiday season.
Unlike some contact centers that measure agent performance by calls per hour, Zappos rates agents on how well they score among customers who rate them for their level of friendliness, says Jane Judd, senior manager of the customer loyalty team.
Going the extra mile
One way the retailer promotes friendly customer service is to help customers find shoes or other products from other retailers if Zappos doesn’t have them available. “Our agents will go to other retail web sites to find products, and call them to make sure a product is in stock,” Judd says. “It’s a very helpful strategy during the holidays. We know that eventually, even if customers don’t buy from us this time, they’ll come back to us first the next time. It’s all about the service. Customers tell us they can’t believe we took the time to help them find their shoes.”
Retailers can also improve customer service during peak holiday periods by learning from how they performed under peak call loads in prior seasons. Tableware e-retailer Replacements Ltd. uses a web-enabled contact center management system from eGain Communications Corp. that lets it check how it handled past call volumes. “We can look at volumes of customer communications from last year’s holiday season by time of day or week, and assess response times and service levels to see if we met our goals,” Jack Whitley, senior vice president of e-commerce at Replacements, says.
The new system enables Replacements to track each customer communication, route it to multiple agents if necessary, and build a database of answers to common questions that support automated e-mail replies for many inquiries. As the average number of monthly visits to Replacements.com has more than doubled in recent years to 2.5 million from 1 million, the eGain system has enabled Replacements to operate with about 19 customer service agents instead of 40, Whitley says.
The ability to respond quickly to customer needs, of course, is key to a successful holiday season. At Roots, its test runs of peak traffic have helped it to reconfigure a home page design that had rotated several large images for multiple product categories. Although Connell and his team thought the images looked great, they caused page loading problems for some visitors. “We scaled them back, reduced the download time, and improved conversion rates,” he says.