How Zappos Turns B2B Consultation Into Retail Innovation

Zappos is known for taking a unique approach to business, whether by crowdsourcing films to feature at Sundance or partnering with Shaq for back-to-school charity work. This creative impulse isn’t limited to marketing or charitable efforts, however, which led to the creation of Zappos Expertise: a solution provider arm that leverages Zappos’ internal teams to help other retailers with challenges ranging from marketing to data engineering.

“Throughout Zappos’ journey, we’ve looked at opportunities to diversify what Zappos does,” said Dustin Sitar, Business Development Lead at Zappos in an interview with Retail TouchPoints. “One of the initial brainstorms around that was how we have a lot of really talented people here at Zappos that work on specialty teams — what if we were able to leverage those teams in a B2B fashion for other businesses?

According to Sitar, Zappos Expertise has built-in advantages as a solution provider, including the retailer’s strong reputation and the collective experience of its internal experts — both their successes and their failures. The popularity of these services, however, sometimes means making tough decisions about how much time these experts can devote to non-Zappos projects.

“While it does require us to really step back and examine what amount of our bandwidth is going to be allocated to working with B2B clients, it also allows us to leverage mistakes or learnings that we’ve had internally on those projects with each team,” said Sitar. “That adds to the value for a company: they can skip the mistakes that we made and all those learnings that we had to find, and jump ahead instead of starting from scratch.”


Apply Data To The Challenge — Don’t Look For Challenges In The Data

One particular area of strength for Zappos Expertise is data management. The company’s history as an e-Commerce shoe merchant has made solving common online retailing challenges, such as determining a shopper’s size and minimizing returns, an ongoing priority. This focus has, in turn, led to the company’s approach toward problem-solving — an approach that also informs the way Zappos Expertise handles its B2B customers’ concerns.

“In general, there can be a disconnect where you look at data overall and try to find solutions in it,” said Sitar. “That is not how our team operates, and that’s not how we would operate for another business. Our process is to say, ‘Hey, what are your primary business problems?’ In our case, it was shoe returns related to sizing.”

Proper evaluation of data can find nuance even in a broad, complex area like returns. In Zappos’ case, the retailer found that many customers would order as many as five pairs of shoes and return four. For some customers, this was just how they preferred to do business: they placed large orders with the expectation that they would return all but one. Zappos didn’t want to try to force customers who wanted to shop that way to change.

However, data showed that other customers were placing multiple orders because they were having trouble finding the right size — which resulted in both frustration for the shopper and increased costs for Zappos. Balancing the needs of both types of shoppers meant incorporating customers’ input and the retailer’s own algorithms, which led to solutions including:

  • Pre-selecting a known customer’s size on the product page;
  • Asking unknown shoppers to input information about a shoe they know fits them well to improve suggestions;
  • Offering a search result filter that only shows products with available sizes that Zappos believes will fit them;
  • Sending follow-up emails that ask whether a purchase fit perfectly, was too big or was too small, and then using that information to influence, and even override, future recommendations; and
  • Highlighting items in checkout carts that Zappos believes won’t fit the customer, with a one-click option to remove them.

This combination of features is aimed at predicting which shoes will fit best without causing friction during the shopper journey.

“We know we get it wrong sometimes and we’re working extremely hard and extremely diligently to make sure we don’t make those mistakes,” said Ameen Kazerouni, Head of Machine Learning/Artificial Intelligence Research and Platforms at Zappos. “But we also know we get it right substantially more often than not, and we’re seeing that that’s definitely alleviating a lot of pain points for the customers that experience it. We’re doing our best to make the experience more available and more accurate, yet not intrusive.”

Bridging DTC And B2B Creates A Diverse Pool Of Experts

The flow of information and key learnings works both ways for Zappos, which makes a point to leverage lessons from its external work. The company’s team comes from a diverse array of backgrounds, and they continue learning from the problems and solutions they experience while working with other retailers.

“When you talk to the data science and machine learning team, for example, they are all from diverse backgrounds,” said Sitar. “The lead of that team did his initial machine learning work in cancer research and then ported it over to shoes. There’s also someone with a political science background doing statistical work, and someone who has done work in route optimization applies that to our inventory management.”

Zappos Expertise also helps the retailers’ teams continue building on this diversity by using it as an opportunity for growth. Internal teams that take on a lot of outside work can use the additional revenue to recruit additional members —giving Zappos a broader base of expertise for both internal and external efforts.

Featured Event

Join the retail community as we come together for three days of strategic sessions, meaningful off-site networking events and interactive learning experiences.



Access The Media Kit


Access Our Editorial Calendar

If you are downloading this on behalf of a client, please provide the company name and website information below: