Why has Zappos.com been so successful? Q
A We had a great opportunity. We were penetrating a market that didn’t exist.
The company has continued to grow despite the current economy. To what do you attribute that success? Q
A We attribute it to customer care. Most customers are pretty fanatical because we give them good service.
Our call center is beyond world class. Sometimes customers
call in and chat for 45 minutes. We have no call resolution
times, and we don’t up-sell. There are no standard operating procedures. The only way to get in trouble is if you don’t
treat the customer well. We’ll even help a customer shop at
another Web site. Doing all those things is what fostered
growth. Today, 75 percent of our sales are from repeat customers. In retail, that’s invaluable.
Sometimes when I’m interviewed, I’m asked why we
haven’t grown faster. The answer is that we could have, but
we wanted controlled growth. We did not want the customer experience to suffer.
You see yourself as a technologist. What role has technology played in your success? Q
A It has been absolutely beneficial. It has brought the cost of fulfillment way down. Our cost per order is half
what it was as a percentage of revenue. It is essential to be
operationally efficient. On the fulfillment side, the automation we’ve done has allowed us to fulfill orders quickly, and
that’s helped amplify the customer experience. If we have a
customer’s order by midnight, we can have it on the
doorstep the next morning.
Zappos has an unusual way of introducing executives
to the business. Tell us about that. Q
A Everything in the company is aligned. Every executive who joins the company spends the first month in the
call center. That gave me a perspective on the customer I
would not be able to get otherwise. It was a bit intimidating, but a fantastic experience. I was almost dreading doing
it. I had 30 years of experience and was scared to death of
talking to the customer. But after a couple of calls, I couldn’t wait for the phone to ring.
What do you see as key drivers of the direct-to-consumer business in the future? Q
A As technology continues to improve, people will become more confident about placing orders online.
That creates greater opportunity. There are still people
who don’t trust it, but in many ways, it is safer than traditional exchanges.
Then there’s the convenience factor. I don’t know anyone
who has more time. Another thing often overlooked is that
the selection online is far greater than in a physical store. A
national chain, if it wanted to order something on the
fringes—say, a pair of shoes in size 14EEE—it would need
200 pairs. We need one. That’s a huge advantage.
What sorts of innovation are you looking for from
providers of technologies that aid your business? Q
A We’re looking for enhancements to efficiency—ways of doing more with less. That is always going to be
important. We never want to sacrifice speed or accuracy. We
want those to go up. We want to ensure things are done in
a quality fashion.
Brian Hancock
JOINEDHANCOCKBRIANWHEN
Whirlpool Corp. as vice president of supply
chain, North America in May 2005, he had
no idea of the challenge that awaited him.
But it wasn’t long before he found out.
Within two months of his arrival, he was put
in charge of integrating the supply chains of
Whirlpool and a company it was about to
acquire, Maytag.
Hancock came to Whirlpool from
Schneider Logistics Inc., where he served most recently as
vice president and general manager. Earlier in his career,
Hancock worked for Tredegar Molded Products and
Honeywell Corp.
Hancock holds a bachelor’s degree in accounting from
Brigham Young University and an M.B.A. from Virginia
Commonwealth University. He holds a CPA certification
and is fluent in Portuguese.
What was your first thought when you
were told that Whirlpool was buying Q
Maytag and you would be responsible for
integrating the two supply chains?
A I joined Whirlpool on May 1, 2005. I was pulled into my boss’s office 40 days later
and told, “We have a summer project for you.”
So, my first thought was, “I am not going to sleep
for three years.” And that was about right. But it
has been a great opportunity to learn and grow.
One of the big challenges you faced was integrating
the two inventories. What did you learn through that Q
process?
A The big lesson I learned is that if you simplify, you will find cost reductions. That applies not only to inventory but also to order management, manufacturing, transportation management, and product strategies. If you take
