1.0 Introduction

Zappos, founded in 1999, is an online shoe, apparel and electronics retailer, specializing foremost in customer service. In 2008, Zappos reached $1billion in annual sales, the following year Zappos was acquired by Amazon in a deal valued over $1.2 billion (Hsieh, 2010). Despite the qualms from consumers about the effect the acquisition would have on the intimacy of Zappos’ customer service, it is still Zappos’ customer service model and attention to relationship management that sets Zappos aside from its competitors today.

2.0 Zappos’ Value proposition: 2.1 Target Market
Zappos’ primary target market is online shoppers in the United States of America, in particular, educated women between the ages of 25 and 49 years of age who are most likely married with children seeking a convenient shopping experience with a trustworthy and reliable company (Dilworth, 2010).

2.2 Sources of Value Creation Figure 1. Sources of benefits (McLeod, 2014, lecture 1:pg. 31)
Value is created at Zappos through increased benefits and reduced costs, see figure 1. The first benefit provided by Zappos is the multiple product lines available for purchase. Further to this, Zappos offers specialty brands and sizes that cater for more specialized individual needs, such as ‘women’s size 15 and men’s sextuple-E widths’ (Jacobs, 2009, p.70). Additionally, if Zappos does not have a requested product in stock, it is custom for the customer service team to direct customers to competitor’s websites (O’Brien & Jeffrey, 2009). Whilst Zappos will consequently lose a sale from the recommendation, it is thought that word-of-mouth marketing will be generated about Zappos’ customer service as a result of the customer’s positive experience (Hsieh, 2010).

The customer service offered by Zappos also creates additional sources of benefit for customers. One such way Zappos