Zappos.com is a privately held online retailer with an extensive product category mainly including apparel, footwear, handbags, and watches. Headquartered in Nevada, it primarily operates in the US with about 1,300 employees and revenues mounting to $635M in 2008. Thanks to its strength in offering an outstanding customer shopping experience and strong corporate cultures and values related to customer service, it was the largest online shoe retailer in 2008, with a positive growth outlook. However, in the face of possible economic downturn, its underlying insufficiencies in supply chain management and operations may pose a threat to the company’s long term profitability. Nevertheless, the opportunity of possible international expansion may well be exploited to improve sales and expand the business, but such decision still needs critical evaluation and feasibility assessment in whether Zappos can sustain its focus on outstanding customer service levels in such scenario.
When Zappos first launched in 1999, there was a great deal of reluctance about the notion of selling shoes online. Shoes are a product in which fit is essential, and most entrepreneurs and investors feared that people would never buy shoes that they could not try on first. Zappos founder Nick Swinmurn was able to convince investors Tony Hsieh and Alfred Lin that because 5 percent of shoe buyers purchase from catalogs, the Internet represented a huge opportunity to capture a virtually untapped market. The unique selling propositions of Zappos included 1) the ability to buy from a much larger selection of styles, sizes and colors than in brick and mortar stores; 2) the ability to receive free overnight shipping; 3) the provision of detailed information and visual access to the shoes; and 4) the “WOW” experience of a customer service call center whose passionate employees were trained to go above and beyond.
What Zappos does is keep delivering happiness to its customers...