Costco Sells Bordeaux

Warehouse retailer Costco is selling 2005 Bordeaux. That's right, wine from France. But beware it won't be delivered until spring 2008. Gary Vaynerchuk, proprietor of Wine Library and WinelibraryTV.com, speaks with Scott Simon.

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SCOTT SIMON, host:

Maybe you've seen the boxes in the mailroom of your office or on a neighbor's porch, cardboard boxes with the word Zappos on them, shoeboxes. Just a few years, Zappos.com has become a fanatical following and become the Internet's biggest shoe seller, defying the conventional wisdom that consumers won't buy things they can't try on first.

NPR's Audie Cornish who, by the way, has some experience in shoe buying, reports.

AUDIE CORNISH: Sarah Gaede is an Episcopal priest in Florence, Alabama, and one of the first people to reply when I put out an e-mail appeal for Zappos' fans. Here's what she wrote back.

Ms. SARAH GAEDE (Episcopal Priest, Florence, Alabama): I'm a fervent evangelist for Zappos. If I were half as enthusiastic about how Jesus can change your life, we'd be adding on to the church to contain all our new members. It's sad to say it's actually true.

(Soundbite of laughter)

CORNISH: She is kidding, sort of. But Zappos does have a special place in Gaede's heart and her closet.

(Soundbite of noise)

Ms. GAEDE: I mean, how could you resist these bright orange sandals that are so - these are fabulous. They are a little pink-and-black plaid with pointy toes. Oh, my gosh, they're so gorgeous. They're Betsey Johnson. And they have a little slingback and they're kind of a brocade, and they have a bow on the toe with sparkles which you can never go wrong with. And I think I had to buy like - I think this was the time when I ordered about 10 pairs of shoes before I got these.

CORNISH: That's right. She said 10. Like a lot of Zappos' customers, Gaede often orders several pairs at a time at full price to get the right fit and style. Luckily, she works at home and her husband doesn't mind the piles of boxes that come to her doorstep. Others aren't so lucky.

Amy Vinson is an investment banker in Nashville. She says she'd rather share her Zappos' addiction with her office receptionist than her spouse.

Ms. AMY VINSON (Investment Banker, Nashville): Particularly, if I bought -numerous pairs and I don't really want my husband asking why I bought a 3-year-old six pairs of shoes, I'll have the box sent to the office so that I can weed through them and look at them here instead of explaining it later.

CORNISH: Vinson's 3-year-old son is the enabler in her addiction to Zappos. Vinson says she's far less likely to come up empty-handed searching online than dragging her toddler from store to store. And if the shoes don't fit, she just sends them back.

CORNISH: Without free shipping, it wouldn't be - they would not be as appealing. If it costs me $15 to return a box of two or three pairs of shoes, then the cost of the shoes that I kept just went up.

CORNISH: Free shipping and free returns. That's what's propelled Zappos from $100-million to a $600-million company over the last seven years.

Mr. CRAIG ADKINS (President, Zappos Warehouse, Kentucky): Some of our best customers are people that return a lot of shoes.

CORNISH: That's Craig Adkins, V.P. of the Zappos company warehouse in Kentucky. The building looks like one of the company's trademark blue, white and black shoeboxes except roughly the size of 12 city blocks.

More than 25 percent of all shoes shipped out of this building come back here to the returns department. That's three times the return of a regular shoe store and Zappos is covering mailing costs for each and every pair.

But Adkins says the free shipping policies aren't so much a burden as a marketing tool.

Mr. ADKINS: If we didn't do that, considering the commodity we were selling, it would be much more difficult for us to be competitive with actual physical stores, where you can just go and try it on and if it doesn't fit so I don't buy it. Here, you're buying it on faith.

CORNISH: And don't count out brick-and-mortar stores yet. Online sale still only make up six percent of all shopping. And even die-hard Internet shoppers, like Amy Vinson, still savor her day out for retail therapy.

Ms. VINSON: People are waiting on me and I get to, like, look at and touch beautiful shoes. And I don't have anybody pulling at me or tugging at me. So that's kind of my little relief. And I know I wouldn't get that same kind of rush by buying my own shoes online.

CORNISH: Zappos is expanding its efforts into clothing and handbags, fashioning itself as a broader service. Meanwhile, its competitors are finally jumping into the online shoe game. Amazon, eBay, and the Gap have each started their own Internet shoe stores, all offering free return shipping.

CORNISH: Audie Cornish, NPR News.

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