Online e-commerce shop Zulily posted another stellar quarter, according to Liberty Interactive Corporation’s fourth-quarter earnings. The marketplace finished the second half of 2017 with double-digital sales growth and customer expansion, and a total revenue of $1.6 billion for the year, due in large part to its unique model, which has not changed since day one.
While competitors such as JackThreads and Fab have been forced to change their approach, Zulily has continued to thrive using its unique business model and holding minimal inventory. In less than five years, Zulily has more than $1 billion in annual revenue, works with 15,000 brands and ended 2017 with a record 5.8 million customers.
Specifically in the fourth quarter, revenue increased 11%, due in large part to a 12% increase in orders. And the customer base rose 16% year over year.
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Zulily was launched in 2010 as a flash site for moms and kids. Today, the product line has expanded into products for men, home, health, beauty, pets, toys and more, in order to keep these consumers coming back. Customer repeat penetration is 91%.
But success comes as no surprise to Lori Twomey, Zulily’s interim president and chief merchant, as the model of the site was unique from its inception.
"Our business has allowed us to be competitive in the marketplace because it was created to fuel discovery through an entertaining shopping experience versus commoditized search," she told FierceRetail. "Zulily is different; we’re an online retailer that launches hundreds of new 72-hour sales each and every day featuring great product at great prices, while holding minimal inventory, which provides us with the opportunity to offer and inspire our customers incredible breadth and depth of product."
Twomey also touted that the business has extreme flexibility, coupled with a robust feedback loop to actively listen to customers.
"We reach our customers where they want to engage with us and shop for unique and beloved brands, our customer has guided us with what she wants her experience to be and what she wants to shop for every day," she added.
Zuliliy continues to offer new content and excitement to keep consumers coming back to the site. Whether its highlighting a new boutique brand a buyer just discovered or testing a new feature like Flash Finds, hourlong microdeals, the brand is continually finding ways to bring more value and excitement to consumers.
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In addition, Zulily looks to engage its customers on every channel including daily emails, apps, Instagram and Facebook Live.
Twomey says that mobile has forever changed the e-commerce game and so is a priority for Zulily. Today, about 67% of orders are placed via mobile.
And while what customers shop for has changed over time, now that Zulily had diversified its merchandise, the customers' behavior has not changed. The prime Zulily shopper still looks forward to the thrill of what she might discover, wants to feel smart about her purchase and is inspired to find unique items reflecting her personal style.
"We have an incredibly passionate and loyal customer base, which is why we see a 91% repeat rate," Twomey said.
Still, the online market has had its challenges to overcome. The company has to constantly provide newness, uniqueness and value as customers that shop the site are not looking for something specific when they log on.
Plus, as the retail landscape is transforming and becomes more cluttered, it is a challenge for all brands, including Zulily, to evolve, engage and connect with customers.
"Our customer-first mentality drives the way we listen to our customers, and our team has done an exceptional job at just that as well as communicating the right message at the right time in the right channel and engaging her where she wants to engage with us be it Facebook Messenger or via Facebook Live, on mobile, in-app, etc.," Twomey said.
Lastly, as customer expectations regarding shipping times have changed, Zulily will continue to invest in operational efficiencies to ensure it can deliver on time.
"We have three different shipping methods that allow us speed to doorstep while still maintaining a strong cost discipline that allows us to pass along amazing value in our merchandise to our customers," she said. "We see growth challenges as opportunities, despite the retail landscape and its transformation this year, Zulily ended 2017 with a record high of 5.8 million active customers—an increase of 800,000 over 2016, the largest annual increase since 2014."
And what about the success of Amazon? Twomey says that Zulily is not threatened by it, as her platform is fundamentally different and focused on curating unique products, experiences, conversations and communities for millions of customers.
As Zulily celebrates its eigth anniversary, the company strives to deliver the very best, every day for its customers throughout 2018 and beyond.
"We’ll continue to embrace what makes Zulily unique—our business model, our brand, and our people and culture," Twomey said. "We’ll continue to encourage discovery, defy convention and obsess about our customer, and remain focused on inspiring and creating something special, every day."