Follow in these footsteps: Provide excellent service

No shortcuts: When it comes to service, Sean Kim doesn't monkey around. "At Zappos, service is not an expense; it's an investment," says the director of business development.

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View a video about Zappos.com.

Zappos.com puts its customers first. Now, the company is having its turn – as an industry leader and model shipper.

Established in 1999, Zappos.com has built a shoe empire, and it's the customers who get the royal treatment. Zappos stepped ahead of the competition by making customer service its trademark. Now, the company offers 3 million pairs of shoes from 1,100 brands and has expanded into apparel, handbags, eyewear, watches, electronics and even laptops. A strategic partnership with UPS helps make it happen.

"We want to make Zappos synonymous with service," says Sean Kim, director of business development. Zappos offers the largest shoe selection in the country and can easily satisfy demand, unlike its biggest competition, brick-and-mortar stores, which can lose significant sales when they don't have customers' sizes in stock. Zappos also will upgrade repeat customers to UPS Next Day Air Saver^®. "We've had customers who've placed orders on our site very late at night find the package already on their doorstep the next morning before going to work," says Kim.

With its customer-friendly strategy, Zappos has grown its annual gross merchandise sales 625 percent since 2000. Sales average $2 million a day and up to $5 million a day during the peak holiday season.

Location, location, location
How does Zappos manage so many orders? A key factor is the location of Zappos.com's distribution center, an 850,000-square-foot facility in Shepherdsville, Ky. In constant motion 365 days a year, the center is 15 minutes from UPS Worldport^®, a UPS air hub that can process 1 million packages a night.

"We chose to build there partly because of UPS," recalls Kim. "As a result of our proximity to Worldport, UPS is able to pick up from our distribution center late into the night."

Zappos can prepare packages two hours after they are ordered online. Then, multiple times a day, UPS takes those packages to Worldport to load them onto UPS planes or trucks.

Meanwhile, the Zappos call center handles customer issues using Quantum View^®, which provides visibility to orders.

Many happy return customers
Returns can be a major pain point for customers, but Zappos saw a great opportunity to gain customer loyalty, building its brand around a lenient returns policy, even paying for return shipping up to a year after purchase. What's more, Zappos encourages customers to try various sizes, colors and styles, returning whatever doesn’t work.

"At Zappos, service is not an expense; it's an investment," notes Kim. "We make returns very easy for the customer. We even pay for the process. I think that's why 75 percent of Zappos' shoppers are repeat customers."

Zappos processes thousands of returns each day. A smooth process is essential to the company and its customers, so Zappos relies on UPS Returns on the Web. Customers log in to their Zappos account, print a return label, affix it to the box and drop it off at The UPS Store^®, a drop box or an authorized shipping outlet. They can even call UPS to request a driver pickup.

Borders and beyond
UPS continues to guide Zappos as it prepares to expand internationally. Should it establish warehouses in other countries, or fulfill international orders domestically? How can it ensure efficient customs clearance and determine harmonized tariff codes for every product?

"UPS came out to talk us through the process," recalls Kim. "They talked about what we need to do, what areas UPS can help us out with, what technology we can use. It was phenomenal."

"It's a very strategic partnership," Kim continues. "Service is part of the UPS business model, and any company that makes service a priority is in line with Zappos’ priorities."