Blog: Leonie BarrieAmazon grows its footprint

Leonie Barrie | 23 July 2009

Back in 2007 when it launched, a website specifically selling handbags and shoes, online retail giant Amazon seemed to be firmly modelling the site on market leader whose focus on customer service – including the promise of free shipping, even on returns – has garnered it a huge and loyal following.

"…with our free overnight shipping, free return shipping, 110% price guarantee, and 365-day returns window, we offer our customers a no-risk opportunity to try us out," Endless said at the time.

But perhaps they didn’t.

The underlying assumption from Amazon’s decision yesterday (22 July) to buy arch-rival Zappos in a in a deal worth nearly US$850m is that it is still struggling to expand its footprint in the key apparel and footwear market.

And this is despite operating and stocking thousands of footwear and apparel brands on its namesake site, including Adidas, Levi’s, DKNY and Wrangler. It also allows ‘featured stores’ like Macy’s, Lands’ End and Target to showcase their items too.

While there is some overlap with Zappos, whose more than 1,000 brands range from Michael Kors, and Stuart Weitzman to Just Cavalli, Amazon says it will continue to run the retailer as a separate entity.

But their combined reach will immediately propel Amazon pole position in the sector. And Amazon will no doubt be hoping that economies of scale will help to lift profit margins too, by using its extensive distribution network to reduce Zappos’ shipping costs.


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