Zappos Proves Shoes Do Sell Online

In just a few years, online shoe retailer Zappos.com has earned 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.

Sarah Gaede, an Episcopal priest in Florence, Ala., is also a Zappo's convert who buys plenty of shoes from the virtual store.

"I am 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," she said while laughing.

Though she's kidding, Zappos does have a special place in Gaede's heart — and closet. She has ordered nearly a dozen pairs of shoes from Zappos.

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 their door step.

But other's 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, particularly after she buys numerous pairs.

She blames her Zappos addiction on shopping for her 3-year-old son. Shopping online is better for her, she says, because she's 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.

"Without free shipping it would not be as appealing. If cost me $15 to return a box of two or three pair of shoes, then the cost of the shoes that I kept just went up," Vinson said.

Free shipping and free returns are what have propelled Zappos.com to a $600 million company from $100 million over the last seven years.

"Some of our best customers are people who return a lot of shoes," said Craig Adkins, vice president of operations at Shepherdsville, Ky.-based Zappos.com.

The company's warehouse looks like one of the company's trademark blue, white and black shoe boxes — except it's roughly the size of 12 city blocks. More than 25 percent of all shoes shipped out of the building come back to the returns department. That's three times the return rate at a regular store. And Zappos covers the cost of returning each pair.

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

"If we didn't do that (considering the commodity we are 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," said Adkins. "Here, you are buying it on faith."

Still, it's too soon to count out brick-and-mortar stores. Online sales only make up 6 percent of all shopping. And even diehard Internet shoppers like Vinson still savor a day out for retail therapy.

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