Zumiez.com is foregoing two major marketing expenses that squeeze online retailers margins, Zumiez Inc. CEO Rick Brooks disclosed in investor presentations last week.

“We do not do a lot of paid search in our business,” Brooks told investors gathered at the Piper Jaffray Consumer Conference June 10. “We do experiment with it…but it's not a big part of our business.”

At the William Blair Annual Consumer Stock Growth Conference a day earlier, Brooks disclosed that Zumiez does not use affiliate marketers, who typically earn a 8 to 10 percent of every online sale referred from their sites.

“Our omnichannel platform is integrated with our store experience,” said Books. “So where we don't have stores we really don't have a web business today in the US.”

The model has shielded Zumiez's online margins as paid search costs have risen and demonstrates why many retail analysts now think national retail chains have an advantage over pure-play online retailers.

Zumiez owns 627 stores, including 567 in 49 states and Puerto Rico, 38 in Canada and 22 Blue Tomato locations in Germany and Austria.  The company offers free in-store pickup at its U.S. locations, which are located overwhelmingly in malls. While the retailer thinks it can ultimately open up locations at 700 U.S. malls, it continues to experiment with street locations and some off-mall locations in key markets such as Los Angeles, where congestion discourages shoppers from driving to mall locations.

“We think there are some opportunities in markets like that,” Brooks said at the William Blair presentation.
Zumiez won't roll out omnichannel capabilities in Canada until it has more store density there. Blue Tomato, which started online and sells in 14 languages across Europe, is poised to expand its bricks-and-mortar presence into a third country in the next couple of years. Since being acquired by Zumiez in 2012, Blue Tomato has doubled its sales to about €60 million and expanded from a handful of stores to 22 locations. That has lowered e-commerce sales to 60 percent of total sales from 75 percent. The business, which grew 34 percent last year, is approaching break even.

Brooks disclosed that the first customer survey ever conducted by Zumiez revealed that its customers are evenly split between high school and college-age kids.

“We thought we were much more concentrated in the 15-to-18-year-old,” Brooks said June 9. “The average age was about 18. We're not only serving the high school kid, we're serving the college kid too. That's a really powerful position for us to be in.”

When asked to pick six words from a long list of words to describe Zumiez, the more than 1,600 customers survey overwhelmingly picked the same six words Zumiez uses internally to describe its brand.

“For competitive reasons we're not going to share them,” Brooks said June 9. “But I'll tell you they are not words that would surprise any of you.”