ZAPPOS.

COM GLEN SAVIO PALMER

15BM60056
TIMELINE OF EVENTS
YEAR Milestones
1999 -Found by Nick Swinmurn
-A variation of the Spanish word Zapotas
which means "shoes.
2000 - Zappos records $1.6 million in gross sales
(exhibit 6)
- Zappos had 150 brands and 400.000 pairs of
shoes
2001 - Nick Swinmurn and Tony Hsieh as Co-Ceo of
Zappos
- Sustained effort produces $8.6 million in
gross sales
2002 - The brand elevate gross sales to $32 million
2003 - Gross sales Zappos rise to $70 million
2004 - Gross sales Zappos more than double to
$184 million
YEAR Milestones
2005 - Sequoia increases its investment in Zappos to a
total of
$35million
- Alfred Lin, cofounder of venture frogs, join
Zappos as CFO
- Gross Zappos sales increase to $370 million
- Zappos moved its headquarters to Las Vegas
2006 - Nick Swinmurn leaves Zappos
- Gross sales at Zappos climb to $597 million
2007 -6pm.com is acquired by Zappos
-Zappos expand its product categories to
include eyewear, handbags,clothing, watches
and kids merchandise
- Gross sales at Zappos hit $840 million
2008 - Gross sales at Zappos hit $1 billion
- Zappos net Revenue of $635million and net
income of
$10.8 million
- Buy Kiva Mobile Fulfillment System (Kiva MFS)
2009 - Sold to Amazon.com for $1.2Bil
 COMPANY CULTURE
Importance in Providing
Zappos Core Values
Deliver WOW Through Service
Embrace and Drive Change
Create Fun and a Little Weirdness
Be Adventurous, Creative, and Open-Minded
Pursue Growth and Learning
Build Open and Honest Relationships With
Communication
Build a Positive Team and Family Spirit
Do More with Less
Be Passionate and Determined
Be Humble
Service
Differentiator that gave the
company competitive advantage
Creating fun and a little weirdness
An informal and interpersonal
culture reflected in customer service
delivery
Friendly, helpful above and
beyond customer service
Target was to establish a Personal
Emotional Connection (PEC) with
the customers
CLT members were encouraged to
take as much time as necessary to
assist customers and create a
wow factor
 SERVICE DELIVERY
ROLES
Employee Customer

Frontline Customer Interaction Employees were

problem solvers

Goal was to wow customers & establish personal

connection
Call center turnover in 2009 was only 7% whereas
industry average was 150%
Back office employees (warehouse) were highly flexible
and processed orders in times which were best in the
industry
Interacted with the well categorized and interactive
website
Those who still had issues could call up 24x7 helplines
Did not have to pay shipping charges
Were delighted by the service and sent in letters, wrote
blogs, or even uploaded video testimonials

Spread positive word of mouth

SERVICE
STRATEGIES(1/3)
Well trained and empathetic staff
staff:
225 hours of core training
160 hours initial/new hire training
Additional courses: effective communication,
coaching, overcoming conflict & managing
stress
Additional 39 hours: Inspiring Great Teams,
Leadership Zappos Style & Cultivating Culture
Not using pay for performance

Treat employees with respect

Give them a conducive working environment
SERVICE STRATEGIES
(2/3)
Static Racks freestanding
shelving units
Inventory Carousels ferris wheel type
Managem shelving units
ent Kiva Automated storage &
retrieval system using inventory
State
pods of the art LPN system
Introduced a mixture of legacy
Embracing
systems and modern systems to
Technolog
keep costs low
y, Smartly
Kiva MFS helped bring down
shipping times
SERVICE STRATEGIES
(3/3)
Order shipping times are the best in the
Delight industry
the Friendly, helpful above and beyond customer
service
Custo Free shipping
mer
Free returns policy

Surprise upgrades to overnight shipping

Provide the widest assortment of product types

Provide customer interactive tools to filter

his/her searches
Provided platforms to the customers to express
their opinion
CHALLENGES

The 2008-09 recession had hit Zappos

business, leading to layoffs and losses
Zappos was still perceived as a
marketplace for shoes, i.e. it had failed
to transcend categories
Zappos apparel business was not in
the same league as the shoe business
Cultural differences between Amazon
and Zappos
THANK YOU