Zappos.com's Darrin Shamo on Channel Optimization During the Recession

Shoes can be a consumer tax deduction, right? OK, maybe not. But Zappos.com has other contingency plans for the endurance run through this beleaguered economy. Darrin Shamo, search engine marketing manager for the Henderson, Nev.-based company, says the shoe seller has more in store for the recession than Nancy Sinatra’s black, spike-heeled, calf-length boots. Shamo reveals that Zappos has a direct marketing strategy aimed at walking all over, then past, the woes. Target Marketing: What direct marketing channel is Zappos optimizing most during this recession and why?Darrin Shamo: I would say that we are focusing on all channels. But the biggest [area] of opportunity [is] currently e-mail—that being because we are just now coming into our own on the e-mail side. We’ve been sending out text e-mails for so long, because of the delivery rates. But we’re now doing a lot more on that front and seeing it take a bigger percentage of our company sales … I would say, in addition to that, organic search and paid search are probably the biggest channels for us, in terms of growth. … As far as optimization, we’re doing quite a bit to pick up the organic side. We’re focusing on some terms that, in our own analysis, seem to drive the search process in paid search. And so we’re working to optimize those “golden corral” terms, as we call them. And to pick up the volume in the paid side. And so, [in] paid search, we’re doing quite a bit to optimize those, and we feel that’s the biggest area of opportunity on our side because we have some skews. We can target those specific skews and hand-deliver a page based on that query. So we’re seeing this as being a good opportunity to get our name out there, and also since it sits alongside everything else that we’re doing in the results pages, the complete convergence of media, videos, images, the “Google product submit,” organic side and then, of course, the paid, we feel like we get a good presence on the [search engine results pages]. TM: What channel is not being used much and why?DS: I would say that one area that we still have not gotten into, and I feel like there’s some potential, is mobile. The reason why we haven’t focused on that is twofold: There are so many other areas that are taking up our priority queue right now that we haven’t gotten to it yet; the other is that we’re somewhat leery of the perceived value by our customers. And if those customers see that as a threat … we just don’t want to be too intrusive and get into a channel that will alienate our customers … TM: How has Zappos’ direct marketing strategy changed during the recession?DS: I would say, among other things, one thing that we have done is we have shifted our focus away from channel-level optimization to campaign-level. We’ve always focused and optimized all campaigns down to the lowest level of granularity; that’s never been a change. Though, we’ve allowed them to all roll up in terms of ROI or profitability at the channel level. So if that channel is performing at a good level, then we allow certain campaigns to perform at high volume, low profitability, low yield. And now we’re shifting away from that and trading out those partners that are high volume, low ROI, or optimizing further to get those partners to a level where the volume may be a little lower but our ROI is sustainable at that target, so every campaign will fit that ROI. … We are shifting our strategy somewhat to favor a bottom line and really just tightening the ship, so to speak. … In 2008, we spent a lot of time throwing things at the wall to see what would stick. Now that we’ve got an idea of what is sticking, we’re going to optimize those things and make them more profitable. So this is our year to tighten the ship and make the most out of our learnings in 2008.

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Zappos.com's Darrin Shamo on Channel Optimization During the Recession

Heather Fletcher

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Heather Fletcher