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From May 2008
The DVDs (complete with postage-paid return
envelopes) are delivered from 55 distribution
centers around the country, allowing more than
95 percent of Netflix subscribers to receive
deliveries within one business day. Netflix
ships an average of more than 1.8 million DVDs
every day, spending about $300 million a year in
the process. It shipped its billionth disk in
February 2007.
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Sponsored by
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Netflix execs boast that the website has been
rated first for customer satisfaction six
consecutive times in surveys by ForeSee Results
and FGI Research, and the company was recognized
as Retail Innovator of the Year by NRF in
January 2007.
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Zappos
Out-of-stocks are a nightmare for most
retailers: for Nick Swinmurn, they were the
inspiration that led to the creation of an
e-commerce powerhouse.
Back in 1999, Swinmurn was walking around a mall
in San Francisco looking for a pair of shoes.
One store had the right style, but not the right
color; another had the right color, but not the
right size. He tried online retailers: still no
luck. |
Internet start-ups were being created almost by
the minute in those days, but selling shoes via
the web was an idea no investor would touch.
Still, Tony Hsieh was intrigued and backed the
concept with $500,000. Within six months, he and
Swinmurn were running the show. A few years
later, when Swinmurn moved on, Hsieh took the
helm as CEO.
| Over the past nine years, Zappos.com has
expanded and evolved to the point where it now
sells handbags, clothing, eyewear, watches and
accessories, as well. Niche shoe markets,
including narrow and wide widths, hard-to-find
sizes — even vegan footwear — are on tap, and a
line of high-end shoes called Zappos Couture
recently debuted. Gross merchandise sales for
2008 are projected to top $1 billion, compared
with $32 million six years ago. |
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Company executives claim that, in
bricks-and-mortar stores, about one in three
sales are lost due to out-of-stocks. Zappos.com
stocks more than three million SKUs that include
more than 160,000 styles, nearly a million UPCs
and approximately 1,100 different brands.
Inventory may be one key to success, but Hsieh
insists customer service is the ultimate driver.
Zappos.com staffs its call center 24/7 and
currently employs a staff of more than 1,600
people. To ensure service levels are maintained,
each new hire at headquarters, regardless of
position, is required to undergo four weeks of
“customer loyalty” training by answering phones
in the call center prior to starting the job for
which he or she was hired.
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