Zappos Case 1 Essay

Submitted By adrinkhachik
Words: 943
Pages: 4

Singh d n a n n&A a i k i h c in Kha r d
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Case:1

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ss e n i p p Ha g n i r e Deliv

Agenda
History
Key Facts
Products
Company Culture
Core Values & Business
Model

Zappos Marketing
SWOT
Industry Competitors
The Future

History
YEAR
1999

- Found by Nick Swinmurn

Milestones

2000
2001
2002
2003
2004
2005

- A variation of the Spanish word Zapotos which means “shoes.”
- Zappos records $1.6M in gross sales - Zappos had 150 brands and 400.000 pairs of shoes
- Nick Swinmurn and Tony Hsieh as Co-CEOs of Zappos - Sustained effort produces $8.6 million in gross sales
- The brand elevate gross sales to $32M
- Gross sales Zappos rise to $70M
- Gross sales Zappos more than double to $184M
- Sequoia increases its investment in Zappos to a total of $35M
- Alfred Lin, cofounder of venture frogs, join Zappos as CFO - Gross Zappos sales increase to $370 million

2006

- Zappos moved its headquarters to Las Vegas
- Nick Swinmurn leaves Zappos

2007

- Gross sales at Zappos climb to $597M
- 6pm.com is acquired by Zappos
- Zappos expand its product categories to include eyewear, handbags, clothing, watches and kid’s merchandise

2008

- Gross sales at Zappos hit $840M
- Gross sales at Zappos hit $1B
- Zappos net Revenue of $635M and net income of $10.8M

Company Facts
Rapid growth since inception- average sales growth of 100% YOY
Purchased by Amazon for $1.2B in 2009
Over 4,000 employees
Revenue of $2B in 2011, 24 million customers, 75% repeat buyers
Recognized by FORTUNE as one of the “Best 100 companies to work for” in 2009 – 2014
Zappos offers new hires $2,000 to quit after training (>1% take the deal)
All employees are paid $11/hour for the first 90 days. After 90, $13/hour
Very transparent company
“It’s a brand about happiness, whether to customers or employees or even vendors.” – Tony Hsieh, CEO

Products
Primary
Primary Product:
Product:
Shoes
Shoes

Accessories
Accessories

Men,
Men, Women,
Women, &
& Children’s
Children’s Apparel
Apparel

Company Culture
Differentiator that gave the company competitive advantage
Build a positive team & family spirit
Managers spent up to 20% of their time bonding with team members outside of work
Zappos employees compile an annual culture book
200 hours of core training & 160 hours initial/new hire training
Unorthodox company culture and wacky atmosphere
Office parades, donut eating contests, Nerf Wars, employee nap rooms
Additonal 39 hours: Inspiring Great Teams, Leadership Zappos Style &
Cultivating Culture
“I’ve seen a lot of companies, and I have never seen a company with a culture like Zappos” – Jeff Bezos, CEO Amazon.com

Core Values
1. Deliver WOW Through Service
2. Embrace and Drive Change
3. Create Fun and a Little Weirdness
4. Be Adventurous, Creative, and Open-Minded
5. Pursue Growth and Learning
6. Build Open and Honest Relationships With
Communication
7. Build a Positive Team and Family Spirit
8. Do More with Less
9. Be Passionate and Determined
10.Be Humble
The customer is more powerful than paid advertising. – Alfred Lin, CFO/COO

Business Model
Customer-Focused Business Model
Developing long-term customer relationships

Does not compete on price
Create a unique shopping experience
Employees make short videos highlighting product features

Free shipping, full refunds on returns, great customer service
Warehouses operate around the clock (faster service/shipping)
Need to “WOW” the customer
…At Zappos, we want people to call us. We believe that forming personal, emotional connections with our customers is the best way to provide great service.” – Tony Hsieh, CEO

“We asked ourselves what we wanted this company to stand for. We didn't want to just sell shoes. I wasn't even into shoes - but I was passionate
about