Wednesday, January 31, 2007

Zappos misses mark for 2006

Okay... so I said the other day that was laying down the gauntlet in the online footwear pure-play business.

Well... it seems that Zappos was about $3m short of their "stated plan" for $600m in sales in 2006. Oh yeah... they grew at 61%, which is healthy to say the least, but... I have to think that the gravy train of growth they've been on is starting to run out of steam. According to a story on they only sold $597 in 2006. While the real reason for the press release was to say that they were going to also have free overnight shipping, they always seem to be able to slip in the sales number in their notes somewhere.

I think that the way that Zappos has built their business is admirable. They have focused on serving their customers needs, and that has proven to be very successful from a growth standpoint. I'm a big believer in that method of retailing. However, I see this as a signal that there's not a lot of room left in the space for pure-plays shoe stores that want to be the "category-killer" and in fact, that killer may have just been put into place in Seattle.

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