Competition + Technology = Business Model Innovation

Lynne Kiesling

Recently I mentioned Zappo’s as an example of an innovative business model that defies preconceptions about consumer behavior. Here’s a coda to that observation: the success Zappo’s has seen has brought both imitation and innovation. Hello, perennial gale of creative destruction!

Exhibit A: Endless, a new shoe and handbag site with free overnight shipping, free return shipping, a 365-day return period, etc. Sounds similar to Zappo’s so far, right? Yep. Quite a few of the brands they carry are the same.

But here’s a valuable innovation at Endless: I don’t know if it’s Ajax or Java or Flash, but if you choose a shoe to explore, you get multiple views of the shoe (which you also get at Zappo’s), BUT you also get real-time zooming so that you can see very minute details of the shoe. For items like shoes, this detailed scrutiny can mean the difference between sale and no sale. If, for example, you always have trouble with heels rubbing on your shoes if the seams aren’t sewn in a particular way, you can investigate that very closely using Endless’s technology. You can look closely at the quality of the leather and the stitching.

My hypothesis is that at the margin, the technology increases the sale of higher-priced, good quality shoes, and maybe even mid-range shoes, because of this ability to scrutinize them in such detail before buying.