The Holistic Brand Building Strategy of Zappos.com

Today I attended the American Advertising Federation luncheon to hear more from Lynn Dizon, Assistant Brand Marketing Manager at the wildly successful Las Vegas-based online retailer Zappos.com, where she shared the details of the company’s brand marketing strategy and highlights of their most recent integrated ad campaign, “More Than Just Shoes.” For a little background on the company, which was named #6 on Fortune Magazine’sTop 100 Places to Work” list, below is a recent video from 20/20 where Zappos CEO Tony Hseih was interviewed by Barbara Walters:

According to Dizon, the marketing discipline at Zappos is divided into two departments: brand marketing (strategic) and direct marketing (tactical). The overall goals of the brand marketing department are to focus on building awareness, shaping perceptions, and creating action. The “four Cs” that drive their messaging include clothing, customer service, culture, and community.

In terms of marketing research, every three years an overall brand health survey is completed, in addition to quarterly brand tracking and ad tracking studies. In 2010 the focus was on building brand likeability and in 2011 the goal was to bring awareness to products, specifically that clothes were now a part of the equation in addition to “just 1,112 brands of shoes.”

In 2011, marketing mix modeling determined that radio and TV were out, so they focused approximately 75% of their marketing budget on high identity print ads and 25% on interactive and out of home advertising (OOH) such as highway sponsorship and airport security bins (which interestingly enough, is how I personally first learned of Zappos). The ad campaign, conceptualized by Mullen, attempted to bring awareness to the fact that Zappos sells more than shoes, and featured naked models doing everyday things like jogging, hailing a cab, and playing Frisbee in public.

The campaign targeted mid-career women in households with a median family income of over $100,000 with kids and featured digital ads, videos, and QR codes embedded within print ads in magazines. The print ads entailed four-page spreads in magazines like Lucky and Real Simple, and QR code tracking determined a high level of engagement. Their Yahoo takeover featured a scantily-clothed man named Arthur running across the home page to drive home the point that clothes were needed. Their existing social media channels were leveraged, one example included a “What’s missing in your closet?” Twitter campaign/sweepstakes that resulted in interactive discussions about style with customer service representatives and how Zappos could help customers find what they were looking for to best fill the gaps in their closet.

But now for the interesting part: despite effectively deploying a creative ad campaign and having a wonderful selection of products, what truly differentiates Zappos is that fact that CEO Tony Hseih is finding ways to redefine business through subscribing to a higher purpose (rather than just profit maximization alone), paying attention to stakeholders (instead of just shareholders), and practicing conscious (as opposed to command and control) leadership. For example, in June of 2011, Zappos purchased the former City Hall building in ailing Downtown Las Vegas and also purchased a floor of residences at the Ogden Luxury Residences  to give clients and vendors coming to town a place to stay for the night. There have been efforts to bring local musicians and art galleries to the forefront through the purchase of such events as First Friday (a monthly art and street festival in Downtown Vegas), and there is even an education initiative to start a charter school for employees. This is more than just an example of corporate social responsibility, but rather a true demonstration of conscious capitalism.

In 2010, Hsieh completed his book, Delivering Happiness, A Path to Profits, Passion, and Purpose which blasted to the top of bestseller lists with “its blend of business advice, tales of worm farms, raves, multi-million dollar deals and – above all – the belief that happiness can be used as a model both in business, and in life.” The web site at www.deliveringhappiness.com challenges people to have a higher purpose, and it’s no doubt that Hseih’s ability to see the big picture and execute a holistic marketing strategy has fueled the basis for his company’s success.

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