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, Zappos has grown to be the largest online shoe store.
Zappos was founded by Nick Swinmurn in 1999. The initial inspiration came when he couldn’t find a pair of brown Airwalks at his local mall. That same year, Swinmurn approached Tony Hsieh and Alfred Lin with the idea of selling shoes online. Hsieh was initially skeptical, and almost deleted Swinmurn’s voice mail. After Swinmurn mentioned that "footwear in the US is a 40 billion dollar market and 5% of that is already being sold by paper mail order catalogs," Hsieh and Lin decided to invest $500,000 through their investment firm Venture Frogs. The company was officially launched in June 1999, under the original domain name "ShoeSite.com.
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, 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 (including petite, big and tall, and plus sizes), handbags, eyewear, watches, and kids’ merchandise, which currently account for 20% of annual revenues. Zappos expects that clothing and apparel will bring in $1 billion worth of revenue by 2015, as the apparel 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 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, 75% are repeat buyers.
The company's customer service reputation has been augmented through viral spreading as well, as customer service expert Micah Solomon noted in 2010: "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 throughout the blogosphere.
Twitter: Zappos run its own Twitter microsite for its 500 employees registered on Twitter. Among them, Tony Hsieh is one of the 185th most followed person on Twitter with 1.85 million followers. Employees do not use their Twitter accounts to offer promotions or marketing pitches, but instead to show followers a little bit of the Zappos culture and to humanize the company. As an example, before going onstage for a tech conference, Hsieh tweeted: "Spilled Coke on left leg of jeans, so poured some water on right leg so looks like the denim fade. He also encourages customers to use Twitter to give positive as well as negative feedbacks.
YouTube aims to show how people works at Zappos. It helps its employees to “Create Fun and A Little Weirdness” (Zappos Core value number 3) and to “Build a Positive Team and Family Spirit” (Zappos Core value number 7). Zappos has increased its channel views five-fold to reach today 230K views. More than 2500 people have suscribed to the
Facebook allow to provide very rich contents -videos, photos, “behind the scene stuff”- to its 152,000 fans. Facebook helps fans to interact more easily than with the other networks (post some videos, comments, pictures). Zappos creates contests to get fans even more involved by giving away some products.
Corporate blogs: Zappos runs several covering all topics related to its business: CEO blog, COO blog, Couture blog, Fashion Culture blog, Inside Zappos blog. This blog culture allows even more the employees to show their passion and dedication to their job and helps customers to get Zappos' culture.
All the social networks are complementary for Zappos; none of them can be avoided. However, the "real" social media remains the telephone and the email, which are essential to get the best customer service.
In 2008, Zappos launched Zappos Insights, which aims to help other businesspeople refine their company culture and customer service. For $40/month, participants are offered access to a subscription video service that lets companies ask questions to Zappos employees. Zappos Insights also offers a two-day bootcamp where participants visit the headquarters and have meetings with Zappos executives.
In 2007, Zappos acquired 6pm.com, which has bargain shoes, clothing, and accessories.] In May 2010, 6pm accidentally priced all their merchandise at $49.95, including items like GPS navigators. They honored the pricing glitch, taking a $1.6 million loss.
Zappos sponsors the "Zappos Rock 'n' Roll Las Vegas Marathon and ½ Marathon," which draw 28,000 runners each year.They also sponsor the Zappos WCC basketball championships. During the tournament, Zappos hosts "Kidz Day," which outfits local Las Vegas kids with a new pair of shoes and an event t-shirt.
Zappos has been featured in many US based publications, including The New Yorker, USA Today, CNN, The New York Times, Inc. Magazine, The Washington Post, CBS News, The Los Angeles Times, The Chicago Tribune, and Forbes. They were named #23 to Fortune’s list of “Best Companies to Work For” in 2009, #15 in 2010, and #6 in 2011.
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