Zappos is one of thousands of online shoe retailers, but what makes them stand out is high customer service values. Nick Swinmurn founder of the company was born in England, but raised in the United States.
Attended and graduated from UC Santa Barbara where he majored in film studies. While out shopping for shoes in a local in a mall. Nick thought to himself why not sell shoes on the web? Since 5% of all shoes sold were through the mail order back in 1998, which is one in every 20 pairs sold.
The original idea was to design a web site that offered the best selections of shoes based on brand, style, color size and width. Mr. Swinmurn created Shoesite in 1999. The site was gradually picking up business, but it was not a distinctive brand.
Back to the name drawing board. The idea of using the Spanish word Zapotos, (which means shoes) was tossed around, but Nick though to add an extra "p" and Zappos was created.
Nick got Tony Hsieh and Alfred Lin interested in his online shoe store and they immediately invested their money into the company.
The company's primary selling base is shoes, which accounts for about 80% of its business. There are about 50,000 varieties of shoes sold. From brands like Nike, Ugg boots, and
Steve Madden. They also service the niche shoe markets, including narrow and wide widths, hard-to-find sizes, American-made shoes, and vegan shoes. In 2001 sales quadrupled their yearly sales to $8.6 million. In 2002, they opened a fulfillment center in Shepherdsville, Kentucky.
Advertising costs were minimal, and the company grew mostly by word of mouth. At this time Hsieh and the executives set long-term goals. They wanted for the year 2010 to achieve $1 billion in sales and receive inclusion on Fortune’s list of The Best Companies to Work For.
Zappos uses a loyalty business model with relationship marketing. The primary sources of the company's continued growth has been repeat customers and word of mouth. Of all its customers, 75% are repeat buyers.
Getting hired at the company is interesting applicants go through two interviews: one for their professional aptitude and one for their personality. In the personality interview, they are asked questions to see
if they would fit in with the Zappos culture. They are asked questions like, "how weird are you on a scale from 1–10" and "what is your theme song?"
All new hires except those at the Kentucky Fulfillment Center, even executives, are required to
undergo a 4-week customer loyalty training course. This includes 2 weeks of talking on the phone with customers in the call center.
After training, the new employees are offered $2,000 to quit. This process weeds out the people who would leave anyway. It shows that the ones who stay are commitment to their employer. Over 97% of the applicants turn down the offer.
Employees enjoy free lunches, no-charge vending machines, a company library, a nap room, and free health care. Each department has its own decor, ranging from rainforest-themed to Elvis-themed, and employees are encouraged to decorate their work spaces.
In 2009 Zappos was acquired by Amazon.com for 1.9 billion dollars. Both companies have the same philosophies regarding customer service and how the customer should be embrace. The joining of the two mega brands was a match made in on-line heaven.