No more Free overnight shipping at Zappos!

According to an email sent out to it’s affiliates by the giant online shoe store - Zappos, they are no longer going to offer free overnight shipping on the web-store.

We will no longer be promoting “Free Overnight Shipping” and we no longer will be promoting our price protection policy. Instead, we will be focusing more on our “free shipping” and our expanding selection of merchandise.

Earlier last year, Zappos started offering this facility to customers only a few days after Amazon announced their entry into the shoe retail business with Endless.com, a store owned by amazon that sells shoes and handbags, and ships overnight for free.

Clearly, Zappos seems to have come to realize that offering overnight shipping for free just because a new entrant in the market, albeit run by an e-retail pioneer, is offering such a scheme to get a share of the shoes and handbags pie, is just not profitable enough, even after doing Over $800 mm in sales in 2007.

Amazon, with is vast and diversified nature of business can afford to sell on very small margins. That, however, should not mean death for other e-retailers. IMO the future of e-retail is not in giant malls, but niche stores that know their product and can offer a quality of customer service that is at par with or better than big e-retail entities. By that, I don’t mean Amazon is the big brother or something, they are in fact doing a great job as a huge mall, and as endless - they run a fantastic niche store.

What I didn’t like is that Zappos quickly got afraid of amazon entering the market and started offering free overnight shipping, only to abandon the scheme later. If a niche store can’t afford the margins of their competition, they should work on bettering their product and service rather than copying their competition’s marketing tactics that they can’t handle.

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Mahatma Gandhi on Customer Service

I was on the Zoho website just now and for some reason clicked the About us link, where I found this awesome quote by the Mahatma - hehe, he said what any true Gujarati would!:

A customer is the most important visitor on our premises.

He is not dependent on us. We are dependent on him.

He is not an interruption in our work - he is the purpose of it.

We are not doing him a favour by serving him. He is doing us a favour by giving us the opportunity to serve him.

- Mahatma Gandhi

This must have been said back in the early 20th century, but in 2007 and beyond, customer service is the one thing that can make or break a business, especially relevent to the industry I frequently blog about (and belong to) - e-retail.

BTW, the Zappos story comes to mind every time I think about customer service in e-retail - I was doing a price comparison for shoe sites, and found out that for the most part, Zappos is pricing it’s shoes at the maximum they are sold online, and yet, they sell more shoes than anybody else; Customers keep flocking to zappos and I very strongly suspect that the primary reason behind the success of the company is the importance they give to providing A grade customer support (Heck, 65% of those of shop there, at any given day are repeat customers!).

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