Quick Query: Zappos Exec on Benefits of Printed Catalogs

The name Zappos, for many retail observers, is synonymous with great customer service and ecommerce well executed. The company was launched in 1999 as an online footwear merchant. It has since grown into a retailing powerhouse with 2008 sales reaching just over $1 billion.

In 2007, Zappos, a purely ecommerce firm, began publishing a printed catalog. That product is now a four-times-a-year magazine/catalog mix and Zappos mails it to several million prospects annually. Jeanne Markel is Zappos’s director of casual lifestyle and performance. She is involved with the execution and production of the catalog.

PeC: We received in the mail a catalog from Zappos.

Markel: “I hope you bought a lot of things from it.”

PeC: We were impressed by the catalog. It caught our attention, being in this business. We know that Zappos was, initially, a pure play ecommerce site and now you’re printing a catalog. So, our first question is, how long have you been publishing the printed catalog?

Markel: “Well, you know, it’s kind of an evolution. The first time we had an edition of our printed magalog was in fall of 2007. We are still strictly ecommerce, but this is just kind of a way to spread our branding, if you will. We did it ourselves, in-house. We did this one edition in fall of 2007 and we had some big success. There were some things that did very well and some things that didn’t and it was a challenge, but we learned a lot along the way. In 2008, we did two editions. We partnered up with Conde Nast and we did an August as well as a holiday edition. This year, 2009, we’re rolling out four editions and we’re working with King Fish Media from New England.”

PeC: You called it a magalog. Why a magalog?

Markel: “It’s kind of a blending between magazine and catalog. Along with our products, there are bits and pieces about Zappos. So, it’s an extension of us to our customers.”

PeC: Do you have ads in that magalog?

Markel: “We have had some in the past and I don’t believe that we have for the two editions that we’ve done in 2009, but it is definitely something that we’re exploring for our later editions this year.”

PeC: We noticed that you have an 800 number in the magalog. Can someone call that 800 number and order a product?

Markel: “Absolutely. We also have a digital version [of the magalog] online. So, if customers go to Zappos.com, they can actually go through visually digitally page by page and shop in that manner as well.”

PeC: You mentioned that the magalog has been a success. How do you measure that?

Markel: “In the past, we haven’t necessarily had a lot of ways of measuring the analytics and really getting a [measurement of] ROI. So, the way we measured the success of the products that are in there. In other words, we did just take weekly sell-throughs or biweekly sell-throughs on the items that were featured and we found that at the time, they were experiencing faster sell-throughs and turns in products that wasn’t featured in the magalog. We’ve gotten a bit more sophisticated this year in that we do have the ability to get some analytics after the fact.”

PeC: A lot of the success may not be measurable, in that it creates word of mouth marketing, and so if sales continue to grow, some portion of that presumably is related to these folks who received this magalog.

Markel: “Yeah. I think there’s definitely the intangible piece. For example, our CEO, Tony Hsieh, was on Oprah late last year and we found that we didn’t necessarily have an initial spike, say, the day that that was on and we thought that that might be more of an incremental increase in sales right out of the box, but we found that that success rate over time was somewhat measurable in that we got a lot of comments from customers saying, “Hey, I wasn’t aware of you and I saw this a couple of months ago and I decided to give it a shot.”

PeC: Tell us about the economics behind the catalog. How many did you print and mail and how much it cost per catalog?

Markel: “I can’t really reveal the cost. We’ll say it was definitely a co-op piece. We partnered with our top brand. For this year specifically, we focused on a different [circulation] number for each drop. So, the piece that was first launched the middle of April was our casual lifestyle teens’ book and that went out to a total of 750,000 customers, and 500,000 of those were mailing lists that we went through our marketing firm. The other 250,000 were inserted into boxes for Zappos customers at our fulfillment center. The second drop, which just launched in the last day or two, is our active mailer and that one is 350,000 copies to a targeted mailing list and the other 150,000 copies were in the boxes of the fulfillment center.”

PeC: You mentioned that you partnered in 2008 with Conde Nast?

Markel: “Conde Nast was a publisher that we worked with on both drops for 2008 and for this year, we are working with King Fish Media. They’re a much smaller firm. They’re based in New England and we still have a terrific relationship with Conde Nast.”

PeC: Our point there was Zappos found it advantageous to outsource the magalog, versus trying to do that in-house.

Markel: “Yeah, absolutely. We like to think that we’re good at what we do, but this is what these people do every day and they’re terrific at it, so let’s work with a couple of the experts in the field.”

PeC: Could you tell us more about Zappos?

Markel: “We’re coming up on our 10-year anniversary on June 1st. Initially, our business was footwear. Certainly, some people still think of us as footwear, but we like to say we’re a service company that just happens to sell clothing, shoes, handbags, accessories, electronics, house wares, etc. So, the footwear piece is certainly what brought us to the dance and it’s by far the largest area of our business, but that actually has been declining from a percentage standpoint. We went live with clothing in spring of 2006 and the apparel piece is really what we are focused on and we see it’s the largest growing piece of our business. As far as our size, we’re just about 1,500 employees. We have about 750 people in our Henderson, Nevada corporate headquarters and we’ve got about 750 people in our Shepherdsville, Kentucky fulfillment center. I’m happy to say we hit $1 billion in gross sales last year.”

PeC: Congratulations.

Markel: “It was Christmas morning. It was a good present.”

PeC: Anything else on your mind for our readers?

Markel: “What we’re really focusing on is developing and extending the emotional connection we have with our customers through whatever the marketing pieces are, whether it’s print or an HTML email blast.”