... Zappos It was the year 1999 when Nick Swinmurn, the founder of Zappos, was at the shopping mall searching for hours for the perfect pair of shoes. He could not find the pair of shoes he wanted in the right color or size so he went home empty handed. It was unfortunate and a disappointment for him but this is what inspired him to open an online retail store. His idea was simple yet motivational. Swinmurn wanted to open an online retail shoe shop that sold the best selection of shoes in terms of brands, styles, colors, sizes, and width. Swinmurn also wanted to give great customer service while at it. With his hard work and dedication to make Zappos’ market offering, value proposition, and customer relationship the best, Swinmurn achieved to have one of the most successful and fastest growing businesses online. Zappos is very generous when it comes to their market offering. The online retailer store offers a 365 day return policy, fast and free shipping, free returns, and a 24 hours customer service line. With Zappos’ polite and helpful customer service, it allows their customers to be happy and have the best shopping experience. Compared to other online retailer shops, most do not have a 365 day return policy, fast and free shipping, free returns, or a 24 hour customer service line. By doing what Zappos does best, this makes their business stand out and have the best reviews. Also, when Zappos give great customer service, it is more...
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...quickly become a leader in online apparel and footwear sales by striving to provide shoppers with the best possible service and selection, with gross merchandise sales exceeding $1 billion annually. Zappos’ company culture delivers happiness. Zappos’ CEO says, “It’s a brand about happiness, whether to customers or employees or even vendors.” Zappos’ zany corporate culture and focus on customer satisfaction has made it both successful and a model for other companies. In 2010, Amazon bought the company for $1.2 billion. Although Hsieh had rejected an offer from Amazon in 2005, he believed that this buyout would be better for the company than management from the current board of directors or an outside investor. Amazon agreed to let Zappos operate independently and to keep Hsieh as CEO. Hsieh made $214 million from the merger, and Amazon set aside $40 million for distribution to Zappos employees. After the merger, the company restructured into 10 separate companies organized under the Zappos Family. In spite of merging, Zappos intends to continue to deliver happiness their customers. This paper examines how Zappos’ focus on happiness has contributed to its success. First, I examine the strategies of Zappos, its core values, and its unique business model. Next, I figure out Zappos’ a unique strategy in a competitive environment. Third, I analyze SWOT of Zappos and other two companies. First of all, we can find Zappos’ mission statement. As grow as the company, it has become more and...
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...Berggren 11/2/15 Zappos Case Study: Happiness and Company Culture To Zappos, service is not just a value held on the corporate plaque or something they like to talk about. At Zappos, delivering exceptional service is a way of life. Zappos is a large online clothing and shoe shop who has made service, not shoes, their business. In 2009 Zappos was acquired by Amazon for an all-stock deal, valued at $1.2 Billion. While many factors contributed to the success of Zappos, the biggest contributors were the leaders, Tony Hsieh and Alfred Lin. Hsieh and Lin understood that the happiness of their employees, partners, and customers was key to Zappos business. Everyone inside Zappos, knew the link between the culture of happiness and the positive performance, attributed to the success of the company. Since the creation of Zappos in 1999, the Zappos brand has upheld its “wow” customer service positioning and a distinct corporate culture. At the time there was no other big online footwear retailers, so Nick Swinmurn, founder and CEO of Zappos, created an online footwear site, containing many varieties of shoes in different colors, styles and sizes. At the time there were not a lot of online shoe retailers, so they were primarily competing with brick and mortar shoe stores. Initially, Zappos received inventory through independent shoe stores but by 2000, they had secured relationships with the shoe manufacturers themselves and were able to offer over 100 brands. In a year, Zappos began offering...
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...Zappos’ primary selling base is shoes, which accounts for about 80% of its business. There are currently about 50,000 varieties of shoes sold in the Zappos store, from brands like Nike, Ugg boots, ALDO Shoes, and Steve Madden heels. They also serve the niche shoe markets, including narrow and wide widths, hard-to-find sizes, American-made shoes, and vegan shoes. In 2004, they launched a second line of high-end shoes called Zappos Couture. In 2007, Zappos expanded their inventory to include clothing, handbags, eyewear, watches, and kids’ merchandise, which currently account for 20% of annual revenues. Zappos expects that clothing and accessories will bring in an additional $1 billion worth of revenue by 2015, as the clothing market is four times the size of the footwear market. Hsieh states that "our whole goal is we want to build the best brand of customer service. Hopefully, 10 years from now, people won’t even realize that we started selling shoes.”(Zappos, 2014) Zappos uses a loyalty business model and relationship marketing. The primary sources of the company's rapid growth have been repeat customers and numerous word of mouth recommendations. Of its customers, over 75% are repeat buyers. The company's customer service reputation has been augmented through viral spreading as well: "Shoe merchant Zappos has benefited from Internet wildfire. When Zappos offered special return shipping assistance, beyond their company policies...the good word about the company spread quickly...
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...the business of Zappos and what are its critical success factors (CSF’s)? [lists] • Business: Largest Online Shoe Retailer with fast efficient order fulfillment. • CSF’s: o Operational Excellence. Primary focus is selling a wide variety of shoes, but also sell other goods such as handbags, clothes and accessories o Focus on customer satisfaction o 4 week Employee training, will full pay o Employee retention, Zappos offered the employees “the offer” after first week of training, which was a 3,000K payout if they chose to quit. o Stocking of a vast inventory of all makes, styles, colors, and sizes, displayed and sold through the enabling power of Web 2.0 o Focused on fast and accurate order processing and speedy delivery to the customer. Website orders are fulfilled fast and efficiently o Zappos owns warehouses and fulfillment centers with an excess or 3+ million shoes, handbags, clothing and accessories, offering the best selection of shoes available anywhere (one stop shop) o Uses eCommerce for the transaction between business to consumer o Best customer service experience, employing approximately 1,600 workers o Offers free delivery and returns as well as a guaranteed 4-day delivery window and a 365-day return guarantee. o Innovated Company that kept culture and work environment ‘fun’ and relaxed. 2. Please complete the following table. Identify the key information systems and the related IT infrastructure investments that enable Zappos’ core business processes: ...
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...Questions of Case #1 (Zappos) Zappos.com is an online shoe and clothing shop currently based in Las Vegas, Nevada. In July 2009, the company announced it would be acquired by Amazon.com in an all-stock deal worth about $1.2 billion. Since its founding in 1999, it has become one of the world's largest online shoe stores. After reading the Zappos case and other relevant materials, your group can answer the below questions while applying some content learned from lectures. 1. Overall, what type of leadership characteristics does Hsieh, CEO of Zappos, have? We have learned the three types of leadership: effective, influential, and responsible? Why do think that Hsieh has that kind of leadership? Provide your opinion and some evidence on the specific leadership. 2. Is Hsieh a transactional leader or transformation leader? If you think he is a transactional or transformational leader, why do you think so? Provide the detailed evidence on your argument. 3. The major terminal value of Zappos is happiness. What kind of instrumental values does Zappos use to demonstrate the Zappos happiness to customers, employees and partners? Please specify detailed components or activities of each instrumental value. 4. Zappos’ CEO pursues empowerment through various tools when employees communicate with customers. For example, the policy to guides external communication was “use your best judgment.” Why is empowerment so successful at Zappos? Do you think this empowerment can work...
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...Professor McCammon 4/8/2013 Zappos’ Case Analysis 1. What are Zappos’ core competencies and sources of competitive advantage? How sustainable are they? What role does corporate culture play in these questions? I identified quite a few core competencies within Zappos that allow them to distinguish themselves from their competitors. First off, they have a very unique return policy, such that they allow the customer 365 days to return the product, in addition to paying for the customer to ship the item back to them. They also have a much faster web interface, as well as extensive online product information. Adding to the technical side of things, Zappos’ also has trained call center operators, and the ability to call toll free. Aside from all those traits, Zappos has really focused on their customer service, and being “a service company that sells shoes.” They are always striving to WOW their customers, or just make sure every customer they deal with is more satisfied with their company as opposed to another. The CRM that Zappos is using is also very successful in making the customers say WOW. Such a strategy of using technology to organize and synchronize sales, marketing, customer service, and technical support helped Zappos get a 75% repurchase rate with their customers, which is another reason their sales are constantly improving. The company’s culture is about growth, both personally and professionally. Because of this company culture, Zappos executives are continuously...
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...Zappos Case Study Amber Jennings May 05, 2016 OAD 31863: Principles of Marketing Ottawa University Zappos Case Study Who does not love shopping? Better yet who does not love shopping while sitting at home? Online shopping is a growing trend that has made shopping easy to do from the convenience of your home. Zappos is an online shoe and clothing shop based in Las Vegas, Nevada. It has grown tremendously over the past 17 years and leaves customers striving for more on a daily basis. The unique customer service emphasis offered by Zappos keeps customers coming back for more. Timeline of Zappos * 1999- Zappos was founded by Nick Swinmurn * 2004- Gross sales of Zappos doubles to more than $184 million * 2006- Nick Swinmurn leaves Zappos * 2007- Zappos expand its product categories to include eyewear, handbags, clothing, watches, and kid’s merchandise * 2008- Gross sales at Zappos hit $1 million * 2009- Sold to Amazon.com for $1.2 billion (Zappos, 2016) Market Offering Zappos is one of the few companies that offer free shipping, 365-day return policy, and 24/7 customer service. Zappos offers many different popular brands of shoes, clothing, and handbags. While Zappos is not always the cheapest retail store the service makes up for the price difference. The main target customer of Zappos would be an online shopper. Zappos strives for the best customer experience and do whatever they can for customers to get the best out their shopping experience...
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...Zappos “More than shoes” An Assignment Submitted by Luis Mendoza Jesus Lopez James “Al” Gonzalez University of La Verne Table of Contents 1. Introduction…………………………………………………………………………3 2. Industry Environment…………..………………………………………………..….4 3. Organizational Mission/Vision and Goals………………………………………….6 4. Organizational Strategy……………………………………………………………..6 5. Zappos Structure………………………..………………………………….……….8 6. Control Features………………………………………………………...…………..9 7. Organizational Culture………………………………………………………...…..10 8. SWOT Analysis …………………………………………………………………...11 9. Conclusion and Recommendations………………………………………………..12 References………………………………………………………………………...13 1. Introduction. The term “E-commerce” has roots in the 1970’s with the development of Electronics Funds Transfer (EFT) and the introduction of the Automatic Teller Machines (ATM) in the 1980’s. With the development of the Secure Socket Layer (SSL) standard in Mosaic web browser and the explosion of the Internet in 1990’s the term has been universally accepted as the ability to buy and sell via the Internet (Graham, 2008; p. 776). Zappos.com is an online shoe and apparel shop that was found in 1999 by Nick Swinmurn and developed into the largest online shoe store. Today this online retailer “offers 500 brand names and 90,000 styles and stocks over 2 million pair of shoes” (Lamb; 2011; p. 97). Currently, the headquarters of the company is based in Henderson, Nevada. Its products include shoes, apparels, handbags...
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...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...
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...Acquisitions | Acquisition Case Study: Amazon’s acquisition of Zappos, November 2009 | | Stephen Greening | 26/04/2014 | WORD COUNT: 2489 Contents Executive Summary 3 Introduction 4 Amazon Overview 4 Amazon’s Previous Acquisitions 5 Zappos Overview 6 Acquisition of Zappos 9 Strategy 11 Why Amazon wanted to acquire Zappos 11 Regulation 14 Valuation 15 Comparable Company Analysis (Comps) 15 Discounted Cash Flow (DCF) Analysis 16 Precedent Transactions Analysis 16 Historical Stock Price & Next Twelve Months (NTM) Analysis 17 Financing 19 Defence Tactics 21 Implementation 23 Risk 25 Conclusion 26 References 27 Books 27 eBooks 27 Journals 27 Online Images 27 Presentation 28 Reports 28 Websites 28 Executive Summary In November 2009, ‘Amazon, Inc.’ (Amazon) completed the acquisition of ‘Zappos.com, Inc.’ (Zappos) in a deal worth around $1.2 billion. Amazon announced in July 2009, that it had reached a deal to acquire Zappos in a deal worth $847 million. The deal was financed by 10 million shares of Amazon common stock (worth around $807 million) and $40 million of Cash and Restricted Stock units on the balance sheet. Amazon is an American international electronic commerce (e-commerce) company, while Zappos is an online shoe and clothing shop. The acquisition of Zappos by Amazon was a friendly takeover; the public announcement, negotiation and acceptance of...
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... Term Paper Zappos by Daniel Silberberg – ID 329655716 Lior Stern – ID 201263910 Nimrod Stern – ID 302328992 February 23rd, 2014 Lecturer: Dr. Galit Dayan TA: Einat Brainin Organizational Behavior Part A. Introduction 1. We chose Zappos.com, an innovative and adaptive online shoe and clothing shop, due to its unique positive company culture, sky-high employee satisfaction and fascinating CEO, Tony Hsieh. Zappos is an organization that has committed itself to a fun, inspired and qualitative culture. The company CEO genuinely believes in delivering happiness to all employees, and working in an gratifying office environment. Tony Hsieh has built a remarkable reputation for himself by being an inventive leader unafraid to equip his staff with responsibility and control. 2. Zappos is one of the largest online shoe and clothing shops. Zappos offers approximately 50,000 types of shoes, providing a large variety of brands, sizes and colors. Their inventory also includes clothes, watches and kids’ merchandise. The concept is simple; it is a traditional eCommerce corporation. Orders are made online and transferred to their warehouse in Shepherdsville, Kentucky. The products are then packed and the order is updated with a tracking number and shipped to the customer. Zappos is especially known for their generous shipping policies. Indeed, the shipping and return costs are free, with a return policy of 365 days for every product. Zappos works closely with...
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...Operations Management BUS430 February 26th, 2015 Managing inventories is integral to a company’s success. Having too much inventory can cost the company a lot of money and having too little can be costly by losing out on customers. It is a juggle for managers to find the right balance in accurately managing inventory. Not only do they have to make sure that they can meet the demand of the customer but they also have to cost effective. Two companies that manage inventory well and still make a profit are Amazon.com and Zappos. Amazon.com is an online company that was founded by Jeff Bezos in the 90’s. Amazon.com sold books online during the early internet years. In a short amount of time it was a success. At the beginning, “Amazon.com carried only about 2,000 titles in stock in its Seattle warehouse”. (Amazon.com, Inc., 2015) Their inventory at that time was very simple compared to how it is now. To stay on top of the competition, Amazon diversified from just selling books online to other products like DVDs, toys, clothing, electronics and just about anything you can think of. Having multiple merchandise requires a strategic central location where the items can be shipped to the customer. Amazon houses their inventory in different states across the country. In order for them to have a variety of items to sell, they have other companies sell their products through the Amazon website and Amazon will fulfill the orders. Amazon has fulfillment centers that house the inventory of businesses...
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...these visions: • One day, 30% of all retail transactions in the US will be online. • People will buy from the company with the best service and the best selection. • Zappos.com will be that online store. With improving technologies locally and nationally, increasing gas price, the time and effort needed to get to traditional stores as well as the time crunch that most people face with demand from the job and needing to spend quality time with the family, it can easily be seen how 30% of all transactions in the U.S will be online. Online shopping is becoming increasingly popular and provides an excellent option for many busy shoppers. Some of these benefits include convenience, since it allows consumers to shop at a time that is convenient to then as orders can be place twenty four hours a day, from their computer whenever they have time available. Another benefit of online shopping is that it allows comparison shopping capabilities so that less time is spent running around from store to store and trying to remember the prices seen at all the stores or at different locations. Another benefit of online shopping is that it provides the use of express shipping options especially for those shoppers who wait until the last minute. Although express shipping comes at an additional cost, there is the peace of mind that the gift will get to its intended party at the time needed. Online shipping also offers gift receipts as well as gift wrapping services which cuts down...
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...Project Report for Understanding and creating the busienss potential for Zappos keeping in view the E-commerce Footwear retail business in india Synopsis: Having seen the potential of e-commerce business in India, the internet user base is on the growth path. India being one of the fastest growing e-commerce markets shows a sign of business success. Both Brick and Mortar and Online business have its own pros and cons however online business in on a trajectory growth trend. The market assessment talks positive about the online Footwear Business. It would be worthwhile to say Zappos has a right time to enter into the Indian market scenario as though he cannot enjoy the “ first mover advantage” , however it can capitalize the unknown and expected potential from e-commerce trade in India. The USPs which are tried and tested at other part of the globe can be replicated in Indian scenario with a clinch of Indian localization. In the report, we have said that Zappos should opt for a “wholly owned subsidiary” with 50:50 debt equity ratios. Various models of revenue like Sales, affiliate, transaction, subscription and sales revenue have been suggested to increase the overall revenue base. The wide policies will be Free Shipping & returns (365 days) and creation of ZCLT (Zappos Customer Loyalty Team). Keeping in view the emerging retail trends worldwide where Nike is creating Nike Runner's Lounge for athletes, Rocky debuts the shoes for nursing professionals, Road Runner...
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