"Niching the niche": Observations from my visit at Zazzle's Silicon Valley HQs

How Zazzle is still growing with mass customization despite -- or just because of -- the economic downturn … and ten other facts that make this platform special

I recently had the opportunity to pay Zazzle an extended visit at their Silicon Valley Headquarters. Here is what I learned during this day:

Zazzle was founded by Bobby and Jeff Beaver as students at Stanford University. The unfulfilled need of a user again was the mother of invention: The two brothers wanted to create a cool t-shirt to advertise a party at their fraternity (in order to "draw in plenty of nice girls"). They realized how difficult it was at that time to get high-quality custom t-shirts without having to order larger quantities at a promotions company or to rely on the low quality of heat-transfer at the local copy store. Well, it didn't work out with the girls at that party, but the rest is history:

Since Zazzle's launch in 2003, its focus always has been on technology. It started with unique digital custom printing technologies that allowed the founders to really get high quality products out at a not known quality (at this time). Today, in every presentation Zazzle stresses the fact that being leading edge in technology is what makes them special.

It may be the proximity to the many technology companies in their area that keeps them emphasizing the technology part – but I do not see Zazzle as a technology company – they are a "market maker". In my opinion, their core capability is to create new markets for products that before could not be exploited in any way.

Sheryl Graham called this "Niching the niche". Sheryl is a Zazzle Proseller, making her living by creating products on the Zazzle platform and selling them to others (http://www.zazzle.com/sagart1952) -- most of them appealing just to a very small audience that traditional companies neither can recognize nor capture.

Starting from the scratch without any ballast or old knowledge or constraints, Zazzle created a mass customization ecosystem that has a number of unique features. Here are my ten points that make Zazzle special:

1.    Niching the niches: The unique vale proposition of Zazzle comes from utilizing the broadest possible scope of needs. Each day, about 50K new products are being created, most addressing a very tiny demand – but in total, this sums up. This also allows them to operate with almost no clear definition of target groups or target customer segments: While the "soccer mom" is the single largest customer of Zazzle, it is by far not its majority. The platform is build to cater to all different groups and clients.

2.    Event driven Marketing: The broad scope of users at Zazzle drives a lot of event-driven business beyond the traditional seasons. There is not just the wedding-season, but their has been Obama-Season, Client-#9-Season, Tax-Day-Season and so on … The core business driver is to enable (local) users with some very specific domain expertise to create products immediately for/after a special event in this domain.

3.    24-hour turnaround for most orders: While most mass customizers need weeks to fulfill an order, Zazzle very early realized that being able to process an order in 24 hours opens many more markets (think of the entire last-minute gift market).

4.    Modular manufacturing system: Their manufacturing system (in San Jose, CA) is build highly automated so that it can balance large spikes in demand without accumulating too high cost. In addition, a highly flexible work force allows to cover different demand cycles.

5.    Real-time rendering and focus on user experience: Zazzle has some impressive rendering capabilities that allow the website to create any product in any specification in very high quality virtualization in real-time. While many other mass customizers still work with pre-fabricated pictures, here everything is rendered just on the spot.

This also enables another signature feature: Showcasing all products in different settings: Most products can be virtually placed on many different models. Zazzle realized that not all designs fit to same style of mannequin. This also caters to the broad scope of clients that utilize the Zazzle platform.

Or consider the "stitching simulation videos" when you choose custom embroidery. This allows the user to see how detailed the self-created pictures will be produced – also contributing to the user experience and quality perception of pro-users of the site.

6.    Allowing clients to focus: Strong focus on creating a flexible platform for different kinds of relationships with different vendors. Their theme: "How to allow our clients to specialize on what they are really good at, and still sell an integrated offering at the same time". So, a traditional company like Pittney Bowes (zazzle.pb.com) can create its own custom goods offering on the same platform as a very design-driven initiative like artsprojekt.com. Compare the sites: They look extremely different, but are based on the same platform and fulfillment system.

7.    Relationships with brands: Zazzle has build some very strong relationships with brands like Disney and the Star Wars Enterprise that allowed these companies to go beyond merchandising and offer real "fan-based content".

8.    Openness and opportunity-driven growth: Zazzle created a platform that is flexible enough (with the help of their great engineers) so that vendors can come in and get (almost) any product they would like to offer customized.  There is no general restriction for new products. New assortment creation is driven by the clients and users.

9.    Generating customer knowledge: Zazzle enables brands and established companies to use Zazzle as a platform for experimentation and testing that even makes money. Disney used Zazzle to allow customization of products with the characters of the movie "Cars", and their large retail clients used the popularity of characters selected by Zazzle users to predict the number of merchandises products in large scale. Creating these aggregated customer knowledge became a large benefit for Disney.

10.    Growing strongly despite the present economic downturn: Although Zazzle realizes the slower economy, they still grow with high double digit figures. Corporate clients use the on-demand opportunities in these times as a more efficient way to create special assortments compared to building large inventories. And consumers that postpone shopping for high-priced items still use the affordable Zazzle products to get a high-touch emotional products ("if I cannot afford the diamond ring for my girlfriend right now, I still can give her a great custom made t-shirt as an emotional gift").

But Zazzle also has to focus on a number of challenges:

• Create a site and corporate image that appeals to many different stakeholders, from brand managers at Disney to freelance independent designers in the Gothic Scene, all using the same platform to distribute their products.
• Manage client conflicts: Zazzle enables its corporate clients to extend their assortment into the custom product line, but at the same time, Zazzle also creates competing assortments by other vendors in the same category. This can lead to channel conflict.
• Educate their customers: Being ahead in technology and mass-customization-thinking, Zazzle has to educate it different kinds of users what it is able to do – and what they are able to do with Zazzle.
• To keep technology leadership, continuous investments in the technology platform is required, also including more and more complex integration of new technologies into the current platform.
• How to grow really big: While Zazzle had remarkable growth in the past, it still has to become the Google of products. What is their strategy to put all the existing amazing technologies and market knowledge together and to create really scalable growth beyond the niches?

So I think we should stay tuned what Zazzle (and their equally strong competitors like Cafepress and Spreadshirt) are turning out in the next months … these are some of the most interesting players in the mass customization market out there in the moment.

Context: Zazzle Blog

Comments

[sivam krish]

Zazzle is a pioneering company and is certainly a "market maker". The technology is not unique or impressive. Even a stes like www.jujups.com (developed by us) have sophisticated creation friendly interfaces that allow consumers to design online.

Zazzles business model seems to be currently wedded to its own fulfillment. As the range of products increase this may become a handicap. Companies like Ponoko and Shapeways are introducing the next generation of co-created products.

We are exploring other business models that will bring smaller fulfillment companies with more interesting product offering into a co-creation echo system. So far Zazzle has done a great job opening up the user generated market, which I believe will develop fast to embrace other manufacturing technologies that goes well beyond printing.

[Frank Piller]

Thanks for the great comments --- and indeed I have forgotten one important point:

(11) Relationship with community: Zazzle enables their community members to create amazing assortments of products and share (sell) them with the world. The comments before show how committed many of these contributors are (I may want to call them Zazzleistas). They are finally the driving force behind Zazzle -- without contributors and co-designers, the entire platform of Zazzle can not create any value at all.

[Cherie]

I too feel grateful and fortunate to be one of the many individuals who has spent a LOT of time, had a lot of fun, AND will spend a lot more time creating, submitting and reviewing tons of artwork at Zazzle.

In the two years I've been at Zazzle I've seen many changes, some good, some seeming not so good at the time, but they always worked out for the best. I would actually laugh at 'us' for squawking and carrying on when some changes were made, only to get through it just fine and wonder how the folks at Zazzle put up with us!! I'd love to be a fly on their wall sometime! :-)

All-in-all it's been great, I'll continue to create for this and other POD SITES, there's certainly no turning back now!

Your art, on products, YOU make money, it's FREE!!! What else could you want?

http://www.zazzle.com/cheries_art*
http://www.zazzle.com/toejams*
http://www.zazzle.com/schtickemz*
http://www.greetingcarduniverse.com/cheries_art

[Bit Devine]

An excellent article showcasing the positives of Zazzle. As a Zazzle contributor of two years, I am thrilled to see that Zazzle is getting their just recognition. I am equally pleased to see that Sheryl was singled out. She is a shining example of the plethora of talented artists who utilise Zazzle. I am glad to be in her company.

Bit Devine
Rincon Creek Studios

[Steven Barrymore]

Zazzle has created a quality online experience which has yet to be matched by its competitors. It (Zazzle) gives the contributors a wide range of tools to create these varous Niches. Providing a visual appealing and easy to navigate environment. I am proud to offer my designs on Zazzle.

Steven Barrymore
www.BlockQuoteProducts.com
www.SPLATBlacK.com

[JaZilla]

I'm grateful to have a place to sell designs that haven't been blanded enough for corporate use.
Thank you, thank you, THANK YOU Zazzle (and my other P.O.D. outlets as well).

http://www.zazzle.com/JaZilla JaZilla ~ Popped Culture
http://www.zazzle.com/shoveltest Shovel Test ~ Funny Anthropology & Archaeology Designs

[goatlady]

I will add that Zazzle is bringing more to the table supporting gallery owners for optimizing their promotional abilities- moreso than any other POD I have seen to date- I thank Zazzle for this. ) As well as more recent tools to make opening galleries and getting them on board quicker and easier than before.
goatlady

here are a few of my newest galleries:
http://zazzle.com/JustCards*
http://zazzle.com/TinyTots*
http://zazzle.com/WesternRodeo*

[Bill H.]

Lets not forget the thousands of individuals that really give zazzle its uniqueness. Yes you can get those commercial comapany items, wich are great, but for the advertised uniqueness, you need individual designers and artist like myself and thousands of others that seem to get lost or swept under the rug of commercialism.
Bill H.
www.outdoorcustoms.com
www.fishts.com
www.badecks.com
and www.zunetwork.us

ALL INDIVIDUALLY OWNED AND OPERATED ZAZZLE SHOPS