Zappos Sales Trajectory And Customer Metrics: 2000 - 2012
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When Jim Novo e-mailed me a link to a Catalog Success article outlining facts provided by Alfred Lin, Chairman/CFO/COO of Zappos, I felt compelled to fit the data into the Multichannel Forensics framework! I love analyzing Zappos. They went from zero to almost a billion in sales in less than a decade, during a time when catalogers openly wonder if they would still be in business without paper-based advertising.
Please click on the image to enlarge it.
Here's the data Mr. Lin volunteered to the attendees of the NCOF conference last week.
2007 Customer Metrics:
- 3.4 million twelve-month buyers.
- 7.6 million buyers, ever.
- $247.06 spend per customer in 2007.
- 75% of sales come from existing customers.
- 2000 Sales = $1.6 million.
- 2001 Sales = $8.6 million.
- 2002 Sales = $31.9 million.
- 2003 Sales = $70.1 million.
- 2004 Sales = $181 million.
- 2005 Sales = $370 million.
- 2006 Sales = $597 million.
- 2007 Sales = $840 million.
- 2008 Sales = $1 billion (projected).
Mind you, this exercise is for entertainment and illustrative purposes only.
Key guesstimates:
- 55.5% of last year's buyers will purchase again this year (placing Zappos in "Hybrid Mode").
- If one of last year's buyers buys again this year, s/he will spend $365.
- Each new customer will spend about $115 in the year the customer is acquired.
- Lapsed customers have significantly lower purchase rates.
- 2000 New Customers = 13,913.
- 2001 New Customers = 50,274.
- 2002 New Customers = 169,013.
- 2003 New Customers = 223,212.
- 2004 New Customers = 863,522.
- 2005 New Customers = 1,104,294.
- 2006 New Customers = 1,501,606.
- 2007 New Customers = 1,575,553.
- 2008 New Customers = 1,620,025 (Kevin's Forecast).
- 2000 12-Month Buyers = 13,913.
- 2001 12-Month Buyers = 57,966.
- 2002 12-Month Buyers = 203,263.
- 2003 12-Month Buyers = 345,442.
- 2004 12-Month Buyers = 1,089,198.
- 2005 12-Month Buyers = 1,773,903.
- 2006 12-Month Buyers = 2,674,787.
- 2007 12-Month Buyers = 3,400,963 (total buyers, ever, = 7.3 million, I got within 4%, sorry).
- 2008 12-Month Buyers = 4,047,348.
- 2001 Repurchasers = 7,722.
- 2002 Repurchasers = 32,188.
- 2003 Repurchasers = 112,811.
- 2004 Repurchasers = 191,720.
- 2005 Repurchasers = 604,505.
- 2006 Repurchasers = 984,516.
- 2007 Repurchasers = 1,484,507.
- 2008 Repurchasers = 1,887,534.
- 2002 Lapsed Buyers Electing To Purchase Again = 2,062.
- 2003 Lapsed Buyers Electing To Purchase Again = 9,419.
- 2004 Lapsed Buyers Electing To Purchase Again = 33,956.
- 2005 Lapsed Buyers Electing To Purchase Again = 65,104.
- 2006 Lapsed Buyers Electing To Purchase Again = 188,665.
- 2007 Lapsed Buyers Electing To Purchase Again = 340,904.
- 2008 Lapsed Buyers Electing To Purchase Again = 539,788.
- 2000 = 0% From Existing Customers.
- 2001 = 33% From Existing Customers.
- 2002 = 39% From Existing Customers.
- 2003 = 63% From Existing Customers.
- 2004 = 45% From Existing Customers.
- 2005 = 66% From Existing Customers.
- 2006 = 71% From Existing Customers.
- 2007 = 78% From Existing Customers.
- 2008 = 82% From Existing Customers.
Here's an estimate for sales per customer, probably not terribly accurate historically, but close in 2007.
- 2000 Sales Per Customer = $115.
- 2001 Sales Per Customer = $148.
- 2002 Sales Per Customer = $157.
- 2003 Sales Per Customer = $203.
- 2004 Sales Per Customer = $166.
- 2005 Sales Per Customer = $209.
- 2006 Sales Per Customer = $223.
- 2007 Sales Per Customer = $247.
- 2008 Sales Per Customer = $262.
The data also suggest that Zappos might be reigning in increases in customer acquisition spend, or has hit a wall at how many new customers can be profitably acquired. This stalls future growth, with the brand forecast to grow by a one-hundred-fifty million to two-hundred-million a year, per year, over the next four years.
The framework allows me to guesstimate future value of each newly acquired customer.
- Sales In Acquisition Year = $115.
- Sales In First Full Year = $203.
- Sales In Second Full Year = $164.
- Sales In Third Full Year = $141.
- Sales In Fourth Full Year = $124.
- Sales In Fifth Full Year = $110.
- Sales In Sixth Full Year = $98.
- Sales In Seventh Full Year = $88.
- Sales In Eighth Full Year = $78.
- Sales In Ninth Full Year = $70.
- Sales In Tenth Full Year = $63.
Again, this exercise is for entertainment and illustrative purposes only. I plugged very general assumptions into the Multichannel Forensics framework, yielding a profile of the brand that directionally illustrates future trajectory (assuming a 2% CAGR in new customers).
- Projected 2008 Sales = $1,060,000.
- Projected 2009 Sales = $1,262,831.
- Projected 2010 Sales = $1,451,895.
- Projected 2011 Sales = $1,626,714.
- Projected 2012 Sales = $1,787,229.
Labels: Alfred Lin, Jim Novo, Multichannel Forensics, NCOF, Zappos