Zappos offers customers a huge selection: four million pairs of shoes (and other items, such as handbags and apparel). According to MarketWatch.com, Zappos has been a competitor to Amazon's own online-shoe destination called Endless.com, believed to be losing money. But what makes Zappos.com more interesting is its quirky, unconventional and yet successful culture.
Numerous articles, explaining the importance for companies to not only focus on a "hot product" or "hip style" but also on something important to "stand for" in the long term, have commended Zappos.com in how it conducts its business and serves its customers. "It's the emotional connection that seals the deal", explains Bill Taylor, a former associate editor with the Harvard Business Review, when describing what sets Zappos apart. In his recent article commenting on the Amazon-Zappos deal, he further comments on how "everything about how Zappos does business is meant to reassure, surprise, amuse, and otherwise engage customers — even as it attends to the basics of price, selection, and shipping."
Hseih's focus on lending a high touch (or give a "WOW" effect to)customer service like its popular free delivery service, or the "surprise upgrade" for its loyal customers - is remarkable! In one of my classes. I read about "servant leadership" (Read Robert Greenleaf's essay or authors like Stephen Covey) - and what I see in Zappos' culture, is a step ahead of that: they've gone above and beyond on their focus to "serve" their customers (and employees!) by adding a sensitive touch. Going back to the example of the "surprise upgrade" for its loyal customers - returning customers may make an order as late as 12am (midnight) and with the aid of overnight delivery, Zappos would surprise them with the order being delivered by 8am the following morning! Now, that would really set my morning off to a great start!
Zappos' unique approach extends its influence to its employees as well. They look for a very high level of energy in its employees, who undergo extensive training before being extended an offer for employment. Well, what's so great about that? Zappos pays a bonus and a salary for the amount they've worked during training to its new employees to quit the very day they're offered the job. By doing this, Zappos sort of tests the commitment of its new employees and bribes them to leave, so that only the truly committed stay behind.
A lot of concerns are voiced on whether Zappos would lose out on these singular traits - due to its acquisition - but that seems quite unlikely, owing to the fact that Amazon.com (with CEO Jeff Bezos) is also focused on similar long term goals as Zappos. Both companies are determined on providing quality service to its customers and both companies would highly benefit from the alliance: Zappos is now armed with the capabilities to leverage its services and expand its influence owing to the extensive resources and technological capabilities provided by Amazon and Amazon in turn bought over a competitor for a seemingly reasonable price
"According to Internet Retailer magazine, Zappos generated $600 million in revenue in '06 (up 62% year over a year), and generated $850 million in '07. This would imply a purchase multiple of well under 1x '09 sales," wrote Mark Mahaney of Citigroup in a note"
All in all, Zappos' culture is what most companies today should emulate. With the negativity and overall pessissm looming in the markets today, companies that are relatively stable, should focus on building customer loyalty and shareholder relationships by infusing a sense of genuine care, as Zappos has achieved. It's no wonder that Amazon, also emphasizing convenience and service for its customers, decided to acquire Zappos.
By honing this aspect, companies can elevate their positions and be successful players in the long term - even in the face of the downturn.
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