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Brand Insights: What Retailers Can Learn From Zappos

As customer-centricity continues to dominate retailers’ go-to-market strategies, developing a deep understanding of buyer shopping patterns and preferences becomes increasingly important. Further, understanding shoppers’ perception of a category can help retail marketers effectively create a positive brand experience, according to Amy Shea, Executive VP, Global Director of Brand Development at Brand Keys. Shea noted that once consumers encounter a positive brand experience, they carry that feeling with them when considering other purchases. Shea pointed to Zappos as a primary case in point.

Findings from the Brand Keys “2011 Customer Loyalty Engagement Index” point to the 10 top categories that are impacted the greatest by consumers’ expectations related to customer service.  

In order, from highest to lowest, the categories are:

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  1. Coffee (purchased away from home)
  2. Insurance
  3. Multifunction Office Copiers
  4. Car Insurance
  5. Luxury Hotels
  6. Parcel Delivery
  7. Printers
  8. Retail Apparel
  9. Car Rentals
  10. Netbooks

Although other attributes, such as product quality, may have a greater impact on success in the “Retail Apparel” category, customer service does have a significant impact. In that regard, Zappos is a leader to watch and learn from. According to Shea, Zappos reigns supreme in its category with regard to customer service. Retail TouchPoints recently caught up with Shea, who shared additional insights on the Index, as well as how retailers can effectively adopt the “Zappos mentality.”

RTP: Were there any surprising finding from the results of the Brand Keys 2011 Customer Loyalty Engagement Index?

Amy Shea: The biggest finding was how table-stakes customer satisfaction really has become. If you are not satisfying the basic requirements of your category, you’re not even considered. The expectation that brands should work for it, that they should be offering something cool, a great experience, a wow-factor in what they sell and how they sell it — that expectation of delight is very real.

And you see this in the retail fashion category, where the importance of brands has doubled in the past two years. Why is that? Because brand, when it’s real, stands for something, and people sort category information that way, especially when categories are cluttered. The difference between a black t-shirt at The Gap and at J. Crew may have seem slight when it comes to the product itself, but the brands have a huge disparity in terms of meaning. J. Crew, a brand that has a great deal of meaning, trumps The Gap, and other brands, as the choice. That’s about a brand that has come to delight consumers with its commodity couture with the basics.

RTP: You emphasize that is important for retailers to look outside their brand to understand how consumers experience other categories. Can you expand on this?

Shea: A good example is mobile device technology. The word “phone” is an artifact of a time that gets further away as people use their hand-held mobiles to customize their life experience. This device carries the soundtrack to my life on a particular day; it has apps for the things I’m choosing to do; it allows me to visually communicate with images sent to my circle of Facebook friends — and so on. This experience “leaks” to other categories that have nothing to do with that device. Brands can get siloed in their category. A shoe retailer may not look at what there is to learn from the iPhone experience, for example, about how to delight customers. Zappos is an example of a shoe retailer whose biggest differentiator is not the products, but the delightful service experience of no cost/no hassle shipping. That is an experience of delight that is similar to the delight that the ease of a free app offers in the mobile category. I don’t think there is enough of that peeking over the category fence going on.

RTP: You point to Zappos as a leader in customer experience. Can you expand on the company’s key selling propositions and what retailers can learn/apply?

Shea: To build on what I said above, Zappos focused on where it could truly differentiate. It wasn’t going to be in the product, and I suspect Zappos was not eager to compete on price point. I wasn’t in the room, but they must have looked at their category through the customer’s view, and what the real and important issues were, once you got past offering good products at a reasonable price. In the online space, ordering and returns are a big deal, and Zappos nailed it. Retailers need to get that deeply into the customer mind and heart to find that special sauce and go for it, the way Zappos did.

RTP: You note that consumers have been “zapped,” and it’s been a pleasant feeling, one they are going to measure every brand against. Can you expand? How do retailers cater to this mindset?

Shea: The appetite for a positive jolt from a brand experience is growing every year. This is not going to go back down, just because the economy is in trouble. Rather than trade down in price and adjust their expectations, consumers have kept their expectations nice and high, thank you very much. This is a topic for an entire article! Suffice to say here that values have changed, and consumption awareness has arrived, but it is a mistake to think consumers are lowering their expectations in this new reality. The opposite is happening. Retailers need to understand the deep emotions behind what drives engagement in their categories, and how to exceed those expectations. Those retailers will be the ones who find out what loyalty really is, and exactly how much it’s worth.  


Amy Shea has worked with brands for more than 20 years, translating research-based insights into effective communications. She received the David Ogilvy Excellence Award, taking both the Grand Ogilvy and First-in-Category for the research conducted on IBM’s integrated campaign on infrastructure. Shea has worked with the AAAA/ARF Committee to Study Emotional Response in Advertising, publishing her findings on BMW’s online films. Shea presents frequently on a variety of topics including brand development, communications and differentiation in the U.S., Europe and Asia.

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