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Zappos Eyes 5-Year Goal of $75M Beauty Biz

Cassandra Lappe, Zappos.com Inc.’s beauty buyer, has a list tacked her wall of the beauty brands she dreams would be carried by the online shoe authority.

The Stilla Makeup Player, sold on Zappos.

Cassandra Lappe, Zappos.com Inc.’s beauty buyer, has a list tacked to the wall of her office in Henderson, Nev., of the beauty brands she dreams would agree to be carried by the online shoe authority.

“The vision is in five years to have a Bobbi Brown, MAC, Dior and Chanel,” she said. “They [Zappos.com] think there is a lot of room for growth.”

What’s stopping those brands from heading now to Zappos.com, an e-tailer that topped $1 billion in gross sales in 2008 and was acquired last year by Amazon.com Inc. in a deal valued at around $1 billion? Lappe conjectured that Zappos.com still remains off their beauty radars. “People don’t think of Zappos as a beauty destination. People think of it as a shoe destination,” she said.

But Lappe, who rose from an assistant buyer for men’s fragrances at Famous Barr to a merchandise business analyst at Macy’s Midwest before joining Zappos.com in 2008, is working to help change the perception of Zappos.com from a single-category specialist to a one-stop shop with beauty playing a prominent role. The company’s five-year goal is to build Zappos.com beauty, which recorded less than $1 million in sales last year, into a $75 million business.

“We already do have such a great market share in some industries that [Zappos.com’s beauty] can really take off,” said Lappe. “It just comes down to finding good partners who can share our vision and want to take a little bit of a risk. We are really flexible and open to new ideas.”

Beauty on Zappos.com has certainly been making progress. It received a tab on the e-tailer’s home page in December, a key contributor to beauty’s 400 percent year-over-year monthly sales jumps this year. And Zappos.com has increased the number of beauty brands from three — Paula Dorf, Lola and Jaqua — two years ago to its current selection of nearly 80 brands. A major achievement for Lappe was to persuade Coty Inc. to start selling its fragrances on Zappos.com about a year ago.

Zappos.com will initiate a skin care builder tool within the next 30 days that will suggest skin care product choices to customers based on their skin types. The company hired an in-house aesthetician, Katrine Cass, who is slated to start answering customers’ skin care questions via e-mail in a few months. It also will partner with Stila on exclusive palettes and other gift items for the holiday season, according to Lappe.

Menal Parikh, vice president of sales at Stila, called sales of the brand on Zappos.com “great” and lauded the company for raising awareness about its merchandise in unusual ways, such as placing placards in John F. Kennedy International Airport security bins featuring a Stila product. “They are a company that wants to empower their customers, and I feel that they empower the vendors that they work with,” she said. “From a sales point of view, it has been one of our favorite experiences with a dot-com.”

Lappe expects the Web site to introduce two to four beauty brands a month. Recent launches include Napoleon Perdis, Anthony Logistics for Men, BioSilk, Me Bath, BaByliss Pro and Sarah Jessica Parker’s fragrances. Fragrance constitutes about 44 percent of Zappos.com’s beauty sales; makeup, 27 percent; skin care, 16 percent, and hair care, 13 percent. Best-selling makeup brands are Stila and Pür Minerals; hair care brands are Chi, T3 and BaByliss Pro; skin care brands are Ahava, Bioelements and MD Skincare, and fragrance brands are Ed Hardy, Harajuku Lovers, Marc Jacobs, Prada and Michael Kors.

Lappe believes there are substantial opportunities for Zappos.com to expand beauty with both unique specialty products and traditional favorites for replenishment purposes. “It is about finding things that people can’t find or basics that people always want,” she said. Referring to beauty brands on Zappos.com, she continued, “You don’t have an inventory plan. If they are selling well, I can keep buying more and trying new things.”

Lappe described a prototypical Zappos.com customer as a 25- to 40-year-old with a household income of $75,000 to $125,000, but she said trends in beauty product sales indicate the age range for beauty shoppers spans wider. The company has about 10 million customers, a figure that is likely to escalate using the considerable know-how of Amazon.com to broaden Zappos.com’s reach.

“Zappos, with the Amazon partnership, is dreaming big dreams, and I am happy to be a part of that,” said Lappe.