Silicon Valley Watcher - Former FT journalist Tom Foremski reporting from the intersection of technology and media

How To Turn A $1.6m Lemon Into Lemonade

Posted by Tom Foremski - May 23, 2010 is famous for excellent use of its own media (blogs, Twitter, etc), and the media, to boost its brand. Here is another excellent example: (Hat tip Jeff Jarvis.)

It seems that Zappos' sister site ran into a problem Sunday morning. For 6 hours it priced everything at $49.95 or under. That means a pair of say, Jean Paul Gaultier boots that sell for $530 online (retail: $1,135) could be bought for $49.95.

Aaron Magness, director of brand marketing at Zappos, wrote that the mistake cost the company $1.6 million but that all sales would be honored:

While we're sure this was a great deal for customers, it was inadvertent, and we took a big loss (over $1.6 million - ouch) selling so many items so far under cost. However, it was our mistake. We will be honoring all purchases that took place on during our mess up.

Great move. Yes, $1.6 million is a lot of money but the publicity will probably more than make up for it. Zappos could have stayed quiet but instead made a savvy marketing move using its own media and trusting that social media would distribute a great story.

I didn't know about but now I do, and who knows, I might pop in Sunday mornings to see if another mistake in pricing has occurred (and I can get those boots :).

(The converse to this however, is that they might have mistaken the price on something I had bought in the past and it should have been cheaper.)

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Please see: Every Company is a Media Company - EC=MC - the transformative equation for business.

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