Shoe and handbag e-retailer Zappos.com Inc. in 2003 rung up $70 million in gross sales. In 2004, gross sales increased by 163% to $184 million. Last year they swelled 101% to $370 million. What next? Company executives are aiming this year for 62% growth—$600 million in sales.
The reason Zappos.com has been growing so well is the company’s focus on customer service, contends CEO Tony Hsieh. “Our focus is on providing the very best customer service and making sure we have that focus throughout the entire company, not just in our customer loyalty department,” Hsieh says. “Our growth primarily has come from repeat customers and word of mouth. Our revenue from repeat customers has increased such that on any given day more than 60% of our sales come from repeat customers. As long as we continue to focus on providing the best service, I believe we will have a good chance at hitting the 2006 target.”
The pure-play company, No. 45 in the Internet Retailer Top 400 Guide to Retail Web Sites, hit numerous milestones last year. These included: increasing its customer base to more than 3 million; securing additional equity financing from Sequoia Capital, which also has funded Yahoo!, Google and Paypal; growing its workforce from 500 to 700 individuals; and adding a new warehouse, the company reports.
Zappos.com will continue using print advertising as its primary marketing tool. However, Hsieh says, it will start experimenting with television and radio commercials to help the company reach its sales goal in 2006.
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