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

Zappos.com 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 6pm.com 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 6pm.com 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 6pm.com 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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