Zappos Price Matching
Omnicommerce

Omnichannel, Sans Store

How do you design an omnicommerce strategy without a brick-and-mortar store? For this month’s Omniommerce Tracker cover story, PYMNTS spoke with Kristin Richmer, head of brand marketing at online footwear and apparel retailer Zappos, about the challenges and advantages of building a successful omnichannel strategy for an online-only company. You’ll find that, along with the latest headlines and a directory of the biggest players in the space, inside the Tracker.

Even with the myriad solutions and strategies being used today, the goal of most retailers implementing omnichannel strategies is rather simple: to make a consumer’s shopping experience, whether online, on mobile or in-store, consistent and enjoyable.

With more consumers now preferring to shop online, retailers are increasingly focusing on the digital channels enabling the change. After all, their focus is set on the prize: growing their revenue.

Some are even opting to go digital without the benefits and expenses of a physical store.

These digital-only retailers are seeing significant growth; however, ditching a brick-and-mortar location is proving to be challenging and complicated.

Today, traditional retailers with brick-and-mortar stores continue to cut themselves a bigger share of revenue. Currently, more than 18 merchants on the list of top 25 eCommerce companies operate physical stores.

Nonetheless, the choice to go digital-only is easy to comprehend. In the third quarter of 2016, American consumers spent $101.3 billion online, according to the U.S. Department of Commerce.

To tap into this growth, more e-tailers than ever before are embracing a host of omnichannel features. The latest PYMNTS.com Omnireadi Index found that 70 percent of the top 10 online retailers offer services like price-matching programs and 100 percent of the top 10 offer purchase histories and mobile apps. For digital-only retailers, however, adopting omnichannel strategies is not simple.

Online footwear and apparel retailer Zappos is one company that has experienced the challenges of implementing omnichannel strategies to its eCommerce model. According to Kristin Richmer, head of awareness marketing at Zappos, the underlying goal for e-tailers when it comes to omnichannel features is largely the same as those of physical store retailers, although the methods they use to meet these benchmarks have some key differences.

Richmer noted that manifesting the company’s omnichannel strategy in different realms, whether that’s merchandising or in a call center, comes down to providing optimal service that makes customers happy.

Taking Omni Totally Online

While not having physical retail locations saves companies like Zappos money on overhead costs, including rent, furnishings, store upkeep and employee payroll, it also poses some peculiar challenges.

A lack of retail locations means customers can’t shop for products at flagship Zappos stores as they might at more traditional retailers. As a solution, clothing and footwear e-tailers like Zappos are implementing flexible exchange and return policies.

“If a customer isn’t sure if they are an eight, eight-and-a-half, or nine in a certain shoe, they can order one of each of those sizes, even more in both medium and wide, and try them all on and return all that don’t fit,” she said. “We offer free shipping going both ways, both for purchases and for returns, and we do something called advanced exchange, which allows them to buy with some confidence.”

While providing free returns and exchanges might be a pain point for some retailers, digital-only merchants like Zappos see it as an opportunity to work closely with their customers to fulfill their needs and, in turn, build brand loyalty.

“We want to match the pace and the needs of the customer,” Richmer said. “So if it’s the color that’s the problem and they want to talk about why they don’t like the color, we can do that, or if that customer is fast-paced and just wants to get this return done and order a new product, we want to do that as fast as we can.”

The company also recently rolled out a new omnichannel feature designed to keep customers clicking back to the eCommerce site as often as possible. In September 2016, it rolled out Zappos Rewards, its first-ever loyalty and rewards program, which allows customers to earn points for their purchases that can be then used to make purchases on the site.

Members of the rewards program also get free shipping on all purchases and returns, access to an even further expanded version of their return and exchange program, as well as a dedicated customer service phone number and other perks designed to keep the company’s most loyal customers coming back and telling their friends.

To stay competitive and cut deeper into the business of physical retailers, many e-tailers like Zappos are also now experimenting with pop-up stores, which gives them an opportunity to interact with their customers in a more traditional way.

Whether online or offline, the focus remains on raising the bar on providing a better customer experience, Richmer added. 

Promotions And Puppies

Recently, the Las Vegas–based company rolled out several promotions aimed at winning over holiday shoppers, including its price-matching program — a staple holiday promotion for many retailers.

But competing with physical retailers can mean more than just rolling out special promotions.

Last holiday season, the company launched a new promotion called “Pawlidayz,” which offered customers an easy and low-cost way to adopt a pet around the holidays.

“When we do these awareness-related events or promotions, we want to make sure we’re doing things that resonate with our customers,” Richmer said. “So that’s where things like the Pawlidayz campaign come from, because we’ve learned our customers have a high affinity for animal rescues, so we wanted to take part in this promotion and give them a way to do that through our company.”

The tangibility of the Pawlidayz campaign showed that often merchants need to step out of their digital alter ego to touch upon the lives of their customers. The model was also adopted by other merchants, including ride-hailing giant Uber, which introduced UberPUPPIES to further build upon its on-demand business.

Richmer noted that Pawlidayz brought in new customers and pleased preexisting customers due to the fact that the promotion actually had nothing to do with Zappos’ offering or with the commercialization that dominates Black Friday and Cyber Monday.

“From Black Friday through Cyber Monday, we were trending on Facebook and around the social world, and it had nothing to do with product and nothing to do with people getting in crazy fights outside of retail stores for the last TV,” Richmer said. “Those are the things that are typically trending that weekend, and it was exciting for us to receive attention while raising awareness for a much-needed cause.”

The company recently rolled out its newest awareness-focused promotion, as PYMNTS has covered. Known as the Friends with Benefits Road Show, it’s a road trip with events in several American cities, featuring live music, local food and, once again, pet adoption. It’s all designed to build loyalty among Zappos’ customer base.

“We want to shake their hands, give them really big high-fives and meet their friends — delivering happiness and memorable experiences along the way,” Richmer said. It’s decidedly real-world experiential marketing from the online merchant.

As more real-world retail locations are replaced by digital stores, expect to see more nontraditional creative and promotional executions by merchants determined to find omnichannel success in an increasingly online world.

To download the January edition of the PYMNTS.com Omnicommerce Tracker™, click the button below …

About The Tracker

The Vantiv Omnicommerce Tracker™, powered by PYMNTS.com, features industry-spanning research and insights that arm retailers with data to make smarter decisions for enabling omnichannel commerce.

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