Zappos Case
Kyle Canter
Service Marketing
Professor Yépez
CASE #2 — ZAPPOS.COM 2009:
CLOTHING, CUSTOMER SERVICE, AND COMPANY CULTURE
In 1999, Nick Swinmurn found himself walking through the mall, unable to find the right pair of shoes after visiting a variety of stores. Empty-handed, he went home to search online and found that there was no major online shoe retailer. A few months later, Swinmurn quit his job and started Zappos.com, an online store that carried the latest shoe styles, brands and colors. Over the past decade, Zappos has evolved to become one of the leading online clothing retailers centered on providing superior customer service.
1. Why was Zappos so successful in its first 10 years from 1999-2009? What evidence is presented in the case of the company’s success? What general, highlevel strategies can you identify that lead to their success?
Since it’s inception, Zappos has grown from a shoe-only retailer to grossing over $1 billion in sales from a variety of clothing items (Zeithaml, 2013, Exhibit 6). Initially called ShoeSite.com in 1999, Swinmurn later changed the name to Zappos, a play on the Spanish word for shoe, zapatos. The company initially purchased its inventory from independent retailers, but soon after, created lasting relationships with footwear manufacturers. This allowed Zappos to refrain from carrying inventory by having the manufactures ship directly to the customers (Zeithaml, 2013). By the end of 1999, Zappos instituted a free shipping policy that fostered immediate growth, which fueled the company towards a very prosperous decade.
At the start of the millennium, Zappos consisted of 150 brands and nearly 400,000 pairs of shoes. One of the main causes of Zappos early success was a $1.1 million investment of venture capital funding from Venture Frogs, “an investment and incubation firm that specialized in early-stage Internet, e-commerce, information and telecommunications technology” (Zeithaml, 2013, p. 500). This introduced Tony Hsieh
Service Marketing
Professor Yépez
CASE #2 — ZAPPOS.COM 2009:
CLOTHING, CUSTOMER SERVICE, AND COMPANY CULTURE
In 1999, Nick Swinmurn found himself walking through the mall, unable to find the right pair of shoes after visiting a variety of stores. Empty-handed, he went home to search online and found that there was no major online shoe retailer. A few months later, Swinmurn quit his job and started Zappos.com, an online store that carried the latest shoe styles, brands and colors. Over the past decade, Zappos has evolved to become one of the leading online clothing retailers centered on providing superior customer service.
1. Why was Zappos so successful in its first 10 years from 1999-2009? What evidence is presented in the case of the company’s success? What general, highlevel strategies can you identify that lead to their success?
Since it’s inception, Zappos has grown from a shoe-only retailer to grossing over $1 billion in sales from a variety of clothing items (Zeithaml, 2013, Exhibit 6). Initially called ShoeSite.com in 1999, Swinmurn later changed the name to Zappos, a play on the Spanish word for shoe, zapatos. The company initially purchased its inventory from independent retailers, but soon after, created lasting relationships with footwear manufacturers. This allowed Zappos to refrain from carrying inventory by having the manufactures ship directly to the customers (Zeithaml, 2013). By the end of 1999, Zappos instituted a free shipping policy that fostered immediate growth, which fueled the company towards a very prosperous decade.
At the start of the millennium, Zappos consisted of 150 brands and nearly 400,000 pairs of shoes. One of the main causes of Zappos early success was a $1.1 million investment of venture capital funding from Venture Frogs, “an investment and incubation firm that specialized in early-stage Internet, e-commerce, information and telecommunications technology” (Zeithaml, 2013, p. 500). This introduced Tony Hsieh
Cited: Frauenheim, E. (2009, September 25). Can Zappos ' Corporate Culture Survive the Amazon Jungle. Retrieved February 18, 2015, from http://www.workforce.com/articles/can-zappos-corporate-culture-survive-the-amazon-jungle Lacey, S. (2012, June 6). Zappos Hands Over Warehousing to Amazon, Focusing All Attention on the Great Downtown Vegas Experiment. Retrieved February 18, 2015, from http://pando.com/2012/06/06/zappos-hands-over-warehousing-to-amazon-focusing-all-attention-on-the-great-downtown-vegas-experiment/ Maestri, N., & Sage, A. (2009, July 22). Amazon.com buying shoe seller Zappos for $928 million. Retrieved February 19, 2015, from http://www.reuters.com/article/2009/07/23/us-amazon-zappos-idUSTRE56L6TQ20090723 Zeithaml, V., Bitner, M., & Gremler, D. (2013). Services Marketing: Integrating Customer Focus Across the Firm (6th ed.). Boston: Irwin/McGraw-Hill. Zumda, N. (2008, October 17). Zappos: Customer Service First -- and a Daily Obsession. Retrieved February 18, 2015, from http://adage.com/article/moy-2008/zappos/131759/