E-Shopping: Category Specialists

Just as we used to go to the shoe store when looking for a good value and advice when in need of new shoes, the online marketplace has adapted to being able to support and provide category specialists for virtually any specified shopping consumers are looking to engage in.

Whether you are in the market for shoes (Zappos), a European vacation (Expedia), a new speaker for the outdoor patio (BestBuy), or a new couch for the man-cave (Wayfair), there is a site dedicated to providing you the best options and pricing relative to what you are looking for.

We look at Zappos as a great success story in terms of becoming a category specialist on-line with their focus on a positive user experience, happy employees, simple returns, and tons and tons of shoes!

Zappos

The founder of Zappos, Nick Swinmurn, developed the concept for a shoe-centric online retail store after visiting a mall in the San Francisco area in 1998. He realized that although he visited multiple shoe stores in the mall, none of them had exactly what he was looking for in terms of the right color, the right style, or the right size.

OK, that’s great, somebody figured out it would be great to be able to buy shoes online… What’s all the fuss about Zappos?

Early on, Zappos realized what can make them different and great is not what they sell, but how they sell it. The company decided to focus on WOW-ing its customers. As a result, their passion and focus became customer service.

Customer-Centric

This customer-centric mission and focus aligned well with Amazon’s mission, and in 2009 Zappos became part of Amazon.

Zappos’ CEO Tony Hsieh is one of the most often quoted business figures in the world when it comes to customer service. Here are a few quotes from Hsieh that shed light into his focus on company culture and customer service:

“We believe that customer service shouldn’t be just a department; it should be the entire company.”

“Businesses often forget about the culture, and ultimately, they suffer for it because you can’t deliver good service from unhappy employees.”

“At Zappos, our belief is that if you get the culture right, most of the other stuff - like great customer service, or building a great long-term brand, or passionate employees and customers - will happen naturally on its own.”

“Every employee can affect your company’s brand, not just the front-line employees that are paid to talk to your customers.”

“When people call our call center, our reps don’t have scripts, and they don’t try to upsell. They are just judged on whether they go above and beyond for the customer and really deliver a kind of personal service and emotional connection with our customers.”

“We take most of the money that we could have spent on paid advertising and instead put it back into the customer experience. Then we let the customers be our marketing.”

Fun Fact:
The first name of the company was Shoe-Site but was quickly changed to Zappos, a spin on zapatos, the Spanish word for shoes.

Peer-to-Peer

As we have said, nothing is inherently new about the models used for the development of the various shopping sites across the internet. This is evident when we look at person-to-person (peer-to-peer) based sites which enable folks to post items they are looking to sell directly to another person. There is no “retailer” involved, but rather the site is used as the point of connection for buyers and sellers.

Sound familiar? Yes, just think of the weekly swap meet, garage sale, or flea market.

Although these peer-to-peer marketplace sites have different items or approaches that can make them unique, the premise is the same: people selling items directly to other people.

Some use a bidding or auction-based format (eBay), whereas others simply provide the forum and the ability to connect people and leave the negotiation up to the interested parties (OfferUp). Another site took a digital take on the classified section of the local paper (Craigslist). Now, the larger community-based platforms are also entering the retail and transactional market and are allowing folks to conduct transactions on their sites via the launch of services such as Facebook’s Marketplace.

Ebay

eBay, the pioneer of the online auction was started in the living room of French-born Iranian computer programmer Pierre Omidyar under the name AuctionWeb to create a space “dedicated to bringing together buyers and sellers in an honest and open marketplace.”  The name was changed to eBay in 1997. eBay went public in 1998. Shares were projected to be $18 but ended up closing the day at over $50, making quite a splash on Wall Street.

The eBay concept is similar to the live auction with a couple notable differences. The seller posts their item for sale for a predetermined amount of time and sets their reserve price, or the minimum amount they are willing to accept. Buyers then “bid” on said item. However, there is no caller facilitating the back and forth. Instead, buyers place their maximum bid and the website automatically raises your bid until you reach your limit. No one knows what the item’s final price will be until the clock runs out.

Like its marketplace counterpart Amazon, eBay created an avenue to “give back” beginning with Auction for America, an online fundraising event through which more than 100,000 users raised over $10 million for the victims of September 11 and their families. As eBay continued to facilitate donations to charitable organizations, they eventually partnered with PayPal Giving Works and evolved into eBay for Charity, which has helped more than 30,000 non-profit organizations to date.

In 2002, eBay purchased PayPal, combining forces with one of the largest and most innovative platforms for conducting transactions in the digital world, but more on that later.

Craigslist

Ever wonder where the name craigslist came from? In 1995, Craig Newmark had just moved to San Francisco and in an effort to get connected in his new city, sent an email about a couple of events to 10 or 12 friends. The email was well received and people started asking to be added to the list. As the list grew, people started asking to add items for sale. In response to the increased demand for housing in the Bay area, Craig asked people to send apartment listings. As traffic continued to grow, Craig began to automate the list. By 1997, the site now known as “craigslist” was reaching 1 million views a month.

It was around this time that Craig was approached to place ads on the site. He made the decision to keep craigslist noncommercial. Instead, the site began to charge a fee in selected categories such as job postings and apartment listings in some cities. It was a gamble that paid off as craigslist is now worth more than $3 billion.

Because it started as a way to connect people to local events, it’s no surprise Craigslist’s personals and community sections are so popular.  Craigslist was the birthplace of online dating, but due to pages like “missed connections” and “casual encounters,” it’s also been the source of a whole lot of controversy. Although many of the community features are still available, craigslist decided to take down their personals section after Congress passed “Allow States and Victims to Fight Online Sex Trafficking Act of 2017” (FOSTA) in March of 2018. But enough about that...

Craigslist may be the pioneer of online peer-to-peer shopping, but it is far from the last frontier. OfferUp is a peer-to-peer shopping app that has been downloaded more than 60 million times since its launch in 2011. The app also takes credit for approximately 10% of all auto sales. Similar to Craigslist, OfferUp is largely free for users to buy and sell items, although it does charge a fee for advanced options. Unlike Craigslist, the app allows instant messaging between buyers and sellers, as well as personal profiles and links to social media, allowing you to see whom you’re conducting business with while keeping your contact information private.

There are numerous other platforms for peer-to-peer shopping such as Letgo, which is similar in function to OfferUp. The Facebook’s Marketplace feature, as well as local buy/sell/trade pages, is an efficient way to connect with the locals. You can easily see whom you are interacting with, and local transactions can be as simple as the seller placing an item on their porch for pickup and the buyer putting cash under the doormat.

When you are entering into a peer-to-peer transaction online, you need to be operating with an increased sense of caution and take a proactive role to protect yourself.

Peer-to-Peer Shopping Best Practices (from craigslist.com)

• Insist on a public meeting place like a cafe, bank, or shopping center.
• Do not meet in a secluded place, or invite strangers into your home.
• Be especially careful buying/selling high-value items.
• Tell a friend or family member where you’re going.
• Take your cell phone along if you have one.
• Consider having a friend accompany you.
• Trust your instincts.

Top warnings to avoid in a peer-to-peer purchase or transaction:

• Make sure you are not giving information that can be used to access your private information, accounts and more.
• Do not click on emails asking you to set up a payment link.
• Make the payment for a transaction in person, never wire money.
• Don’t provide your phone number, or if you do, use a Google number.
• Make sure you don’t give away your location or identifying images or info related to your post.
• Inspect the item before you give payment of any sort. Take it out of the box.

High-End Resale

Secondhand shopping is nothing new, but in recent years it has gained popularity. Since the recession in 2008, the market for resale apparel has steadily increased, reaching a whopping $20 billion in 2017. And according to thredUP, the largest online retailer of second-hand clothing, the resale market is growing 24% faster than other retail stores. With numbers like that, it’s no wonder the online resale shop is one of the fastest-growing cyber businesses.

ThredUP is a resale app that boasts 30,000 sales per day. This site sells previously owned items for an average of 80% off retail and has all the brands you would find at your local shopping center, making it the most affordable choice in this category.

The RealReal is the website of choice for the more discriminating shopper. Customers can peruse clothing, accessories, fine jewelry, and watches boasting labels such as Prada, Louis Vuitton, and Chanel. What separates The RealReal from other luxury resale sites is their authenticity guarantee. No need to worry whether that Gucci handbag is a knock-off when you purchase here.

Poshmark, Swap.com, Tradesy, and even Instagram… the online options for bargain hunters are endless.

Subscription

Nowhere is technology’s influence on how people shop more visible than in the world of subscriptions. Imagine getting a box of goodies full of wonderful surprises tailored to your personal taste and delivered to your door. While the most popular items are food and beauty products, the possibilities, and price points, are endless.

Ipsy, the leader in and one of the founders of the online subscription box craze, sends you five beauty products each month for $10. Blue Apron and Hello Fresh send you boxes full of ready-to-cook fresh food. Stitch Fix, number one in the apparel department, sends you a box of clothing chosen by a personal stylist who gets to know you through an online profile. Of the plethora of subscriptions to choose from, some of the most popular and interesting include: Dollar Shave Club (shaving & grooming products), My Garden Box (seasonal plants and bulbs), Winc (wine), Yarn Crush Monthly (knitting projects), FabFitFun (athletic apparel), BarkBox (pet supplies), and Teabox (this one is obvious).

This innovative method of shopping has seen an 800% increase in the number of visitors to their websites each month. Although the market as a whole is exploding, the success of individual sellers is uncertain as companies like Amazon enter the picture. Retailers such as Sephora, Target, and Walmart are also joining the fray. What we know for sure is that the subscription box isn’t going anywhere anytime soon.

How to Shop

Just as when you set out to shop in a brick and mortar store, there are several tips, tricks, and best practices to keep in mind:

• Set a budget. Decide what features matter most to you, and what you are willing to spend to get them.
• Do your research. Type in the product name followed by Reviews, Complaints, and Scams. Do the same for the company that produces the product as well. Many sites offer customer reviews for the products they sell. You’ll easily be able to see if that sweater runs small or that book is a must read. Using the shopping tab in Google, or perusing multiple sites, can help you ensure a fair price.
• Search for coupon codes or sales. There are a multitude of third-party apps and websites such as RetailMeNot.com to help you find sales and discounts. Many retailers offer special discounts or free shipping to first-time customers if you’re willing to take a moment to register.
• Check the return policy. Make sure the company has a fair return policy that you agree with before you conduct the transaction. The length of time the company allows for returns, refund policy, and whether or not you can make exchanges are important information since you don’t get to try on that bathing suit before you buy it.
• Calculate the actual price. Make sure you are looking at the total cost, not just the amount listed. Confirm there are no add-ons such as shipping or service fees. For example, when looking for tickets to an event off the secondary market, you might get drawn in by the ticket price listed on the posting, but they tend to add on over 20% per ticket for service, transaction, or other fees.

Big Events

Watch for sales. Just like brick and mortar stores, online retailers are competing for your business and will likely have considerable discounts on traditional retail “holidays” such as Black Friday. But Cyber Monday is the apex for web-based holiday shopping. As online shopping took hold, a trend of increased sales on Monday following Thanksgiving emerged. Retailers responded, and it now outpaces Black Friday in terms of total sales. Discounts and incentives will vary from retailer to retailer so definitely do your research.