P. 1
Zappos Dot Com

Zappos Dot Com

|Views: 790|Likes:
Published by animalejo
modelo de negocio de zappos.com
modelo de negocio de zappos.com

More info:

Published by: animalejo on Jun 17, 2008
Copyright:Attribution Non-commercial


Read on Scribd mobile: iPhone, iPad and Android.
download as PDF, TXT or read online from Scribd
See more
See less







Atrás 3 página o páginas que se imprimirán.

Registro: 1
Título: Autores: Fuente: Tipo de documento: Descriptores: A Step Ahead. Coster, Helen Forbes; 6/2/2008, Vol. 181 Issue 11, p78-80, 2p, 2 color Article *ELECTRONIC commerce *CHIEF executive officers *CORPORATE profits *CUSTOMER services *BUSINESS enterprises SHOE stores ZAPPOS.COM Inc. NAICS/Industry Codes425110 Business to Business Electronic Markets 454111 Electronic Shopping 448210 Shoe Stores Gente: Resumen: HSIEH, Tony C. The article presents a profile of Zappos, an online shoe retailer. Commentary is provided by Zappos' chief executive officer, Tony C. Hsieh. The article discusses the company's emphasis on customer service, its business practices, and its revenue growth from 1999 through 2007. Special focus is given Zappos' customer service personnel and policies. INSET: FINDING THE RIGHT FIT. 0015-6914 32113403


ISSN: Número de acceso:

Base de datos: Business Source Premier Sección: Entrepreneurs BRANCHING OUT ONLINE

A Step Ahead
Zappos' Tony C. Hsieh doesn't know a darn thing about shoes. But he knows how to sell them. Look out, Amazon Strolling into a big lower Manhattan shoe store, Tony C. Hsieh is horrified by its bored-looking employees and deafening hip-hop music. None of the six salesfolk make a move to assist Hsieh, 34, even when he picks up a brown men's sandal. "I have no idea what makes this stylish or how it's different from anything else here," he says. Hsieh is chief executive of Zappos.com, an online shoe vendor with an inventory of 4 million shoes in 200,000 styles from 1,200 shoemakers, including Bruno Magli, Nike and Ugg. Even so, he says he knows very little about the products he sells. What he does know is customer service, something missing in the Manhattan store but a Zappos hallmark, and one that may help it sell more than footwear. The privately held Las Vegas company (whose name comes from the Spanish word for shoe) gets raves from shoe lovers for its fast, free shipping--90% of orders arrive the next business day--and a 365-day return policy that allows footwear fans to order a bunch of shoes, try them on and return those that don't suit or fit. Three-quarters of sales are from repeat customers. Zappos keeps its inventory handy in two warehouses, totaling 1 million square feet, in Shepherdsville, Ky., just a 15-minute drive from UPS' world shipping hub. Trucks ferry all types

1 of 3

12/06/2008 08:30 p.m.



of kicks, from Crocs to Christian Lacroix stilettos, to and from the UPS hub all day and night. Shipping, which cost $100 million last year, eats into margins--the nine-year-old company didn't turn a profit until 2007--but Hsieh insists it's worth every penny. "It creates a 'wow' experience and generates positive word of mouth," he says. The wow factor has helped Zappos grow quickly since Hsieh joined the company in 1999. (He's been running it solo since 2006.) Last year it made $10 million pretax on $528 million in revenue after returns. He wasn't kidding about the easy return policy. Gross sales were $840 million. Emulating Amazon, Hsieh has expanded Zappos into clothes, cookware, electronics, bedding and toys. Pickings are slim in some of these departments. For now, folks interested in athletic accessories can buy only gloves, listed for $35 to $55; those who want to explore TV and home theater products will find only a Vudu video receiver for $295. Can Zappos break out of the shoebox? Product diversification is the best way for Hsieh to keep Zappos ahead of rivals that have popped up in the $1.4 billion online shoe business. They include Piperlime, an online shoe site created by Gap 19 months ago that offers a similar shipping and return policy as Zappos. And then there's Endless, a similar outfit started by Amazon. These sites offer many of the same styles and brands. Prices are sometimes higher on Zappos, where they fluctuate based on supply and demand. (It maintains a separate discount site, 6pm.com, where as much as 20% of its leftover inventory goes throughout the year. Shoes that don't sell there go to five outlet stores the company operates.) Hsieh, who owns ten pairs of shoes and can't recall more than two of the brand names, insists Zappos' corporate personality gives it an edge on copycats. He goes out of his way to hire customer-service phone reps who are outgoing, open-minded and creative. It seems to work. During one recent call a shopper wanted to know when her size in a certain formal shoe she wanted for her wedding would be available. The Zappos customer-service rep helped her scan rival Piperlime and Endless sites for the shoe. They didn't have the right size, either, so the Zappos rep passed along the phone number for the other companies' customer-service departments before taking time to chat about her own wedding and shoes. Another time, a recently widowed woman called to see if she could return some shoes she had ordered for her husband, who had died a short time after receiving them. A Zappos rep accepted the shoes--and sent the customer flowers. Not long ago Hsieh created a "cultural fit interview" for prospective hires. It includes questions such as: "On a scale of one to 10, how weird are you?" "If they say 'one,' we won't hire them," says Hsieh. "If they're a 10, they're probably too psychotic for us. We like 7s or 8s." (Hsieh, who says he pretty much lives on a diet of Slim Jim jerky sticks and Diet Red Bull, figures he's an 8.5.) To keep "Zapponians" in the right spirit once they are hired, he throws a weekly costume party at the main office. Hsieh figured out online retailing on the job. Previously, the Harvard graduate created Internet ad company LinkExchange, a banner-swapping network for small businesses. Microsoft bought the company for $265 million when Hsieh was only 24. He then started a venture firm called Venture Frogs with college pal Alfred Lin, who's now chief financial officer of Zappos. They invested in Internet companies, including AskJeeves. In 1999 Hsieh invested $500,000, a combination of his own money and his fund's, in Zappos, then a struggling upstart known as Shoesite.com. Hsieh became co-chief executive with founder Nicholas Swinmurn in 2000. Swinmurn left six years later. Hsieh, who owns less than 50% of the company, is convinced the company's reputation for customer service can help it stand for more than footwear. It's certainly catching on in corporate circles: Virgin Group recently asked Hsieh to come in for a visit so they could pick his brain. His advice? "Chase the vision," he told them. "The money and profits will come." PHOTO (COLOR): Juggling act: Zappos Chief Executive Tony C. Hsieh wants to sell lots more than footwear.

2 of 3

12/06/2008 08:30 p.m.



By Helen Coster

FINDING THE RIGHT FIT We ordered a pair of Belle by Sigerson Morrison ballet flats from three online vendors to compare their prices and customer service. Nordstrom's shoes arrived in Manhattan four hours earlier than the others, but, with taxes and a $25 overnight shipping fee, they cost 12% more than Zappos, the least expensive (and most entertaining) vendor. NORDSTROM.COM Total cost: $329.78 (including $25 shipping fee) Customer experience: Good. A four-minute wait for a telephone sales rep seemed long, but, once she picked up, a salesperson was happy to see if Nordstrom stores carried more colors in the flats. She signed off with a perky "Enjoy your shoes!" Returns: Customers can return items whenever they want. Sending shoes to the Nordstrom warehouse via the U.S. Postal Service costs $6. Shoes ordered online can be returned free of charge to a Nordstrom store. PIPERLIME.COM Total cost: $317.69 (including $15 shipping fee) Customer experience: Fair. The shoes we wanted were available only in white. Our credit card was mysteriously denied. Placing the order took five minutes. Returns: Free if customers take their shoes to a UPS shipper. ZAPPOS.COM Total cost: $294 Customer experience: Fun. Gladys Knight and her husband recorded Zappos' welcome message with a few lines of "Midnight Train to Georgia." We even took time to listen to a "Joke of the Day" before ordering our shoes in white, the only color said to be available. When we asked about black, the phone rep found them on Nordstrom.com. Two days later we were told that Zappos did have one black pair in our size in stock. The rep offered to send them immediately without double-charging our credit card, if we returned the white pair within two weeks. Returns: Free. Customers can either print out a mailing label or receive one by mail.


Copyright of Forbes is the property of Forbes Inc. and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. Atrás

3 of 3

12/06/2008 08:30 p.m.

You're Reading a Free Preview

/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->