January 4, 2006, 12:00 AM

Zappos.com posts a 67% increase in December sales

Rather than gear up entirely for the fourth quarter and the holiday shopping season, Zappos follows a better-rounded and year-round merchandising plan, says CEO Tony Hsieh. As a result, repeat customers are also frequent Christmas shoppers.

Online retailers are known for pulling out all the stops during the holidays to get shoppers to click and buy. But Zappos.com concluded a stellar holiday sales season simply by sticking with its regular marketing and merchandising plan.

As a result, Zappos.com had online sales of about $50 million in December, an increase of 67% from sales of $30 million in December 2004. “Rather than spend a lot of money on marketing, we instead decided to focus our resources on constantly improving the customer experience,” says CEO Tony Hsieh. “That`s what leads to more word-of-mouth and repeat customers.”

Zappos, No. 45 in the Internet Retailer Top 400 Guide to Retail Web Sites, finished 2005 with about $370 million in total online sales, double the $184 million of 2004. Rather than gear up entirely for the fourth quarter and the holiday shopping season, Zappos follows a more well-rounded and year-round merchandising plan, says Hsieh. As a result, repeat customers are also frequent Christmas shoppers. “December has always been our biggest month, but what`s most important in the long term is building the Zappos’ brand, which is all about service,” Hsieh says. “This way in the long term we can sell much more than just shoes and handbags.”

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