Zappos: Online Clothing & Shoe Company Established in 1999

Paper Type:  Essay
Pages:  7
Wordcount:  1883 Words
Date:  2023-05-30

Zappos is an online clothing and shoe company. It bases in Las Vegas, Nevada, in the United States of America (Warrick, 2017). Its founder is Nick Swinmurn, who established and launched it under the name domain of (Burke, 2016). Alfred Lin and Tony Hsieh accompanied Nick Swinmurn in the launching of the company. The duo invested $2 million in the company via its other investment firm, known as Venture Frogs (Golden et al., 2017). In July of 1999, the name of the company changed to Zappos from ShoeSite. The new name Zappos extracted from a Spanish word Zapatos, which means shoes (Yugendhar & Ali., 2017). In 2000, the Venture Frogs firm invested in Zappos. Zappos then moved into their office spaces. In 2001, Tony Hsieh became Nick Swinmurn's co-CEO (Warrick, 2017). Zappos earned a gross sale of $1.6 million from 1999 to 2000 alone (Golden et al., 2017). The company then channeled in $8.6 million in 2001 (Warrick, 2017). The amount was the previous year's significant rise. Later in 2004, Zappos attained a gross sale of $184 million and received an investment from Sequoia Capital worth $35 million (Burke, 2016). The paper is a case study about the organizational details of the Zappos shoe company.

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The Changes that the Zappos Company has Experienced

As the then ShoeSite mall, Zappos actualized the idea of implementing the internet in the online shoe retail in 1999 (Golden et al., 2017). The founder of Zappos Nick Swinmurn generated the idea of selling a vast variety of shoes and other footwear online by realizing that the Chuka boots, which were his favorite types of shoes, were lacking in the market (Eremina & Puhakka, 2017). His inability to find them at the local mall in San Francisco made him actualize the idea of investing in the online business of shoe retail. He, therefore, implemented the idea of selling a wide variety of shoes that were lacking in the American markets under the (Kumar & Mukherjee, 2018). After many failed attempts in meeting a partner for the business, he eventually met Tony Hsieh, who agreed to invest in the shoe company (Golden et al., 2017). Through his investments from the Venture Frogs firm, Tony invested in Nick's idea of online shoe retailer, a fact that has seen Zappos where it is today (Burke, 2016).

In 2002, Zappos partnered with the UPS to initiate the expedition of footwear delivery (Eremina & Puhakka, 2017). The Zappos warehouse was 825,000 square feet and located about 17 miles from the World port of the UPS (Warrick, 2017). It was their global hub for air freight and was at Louisville in the Airport of Kentucky. An estimation of about 40,000 units was processed in every shift at that time, using the system of carousel in the United States of America (Yugendhar & Ali, 2017). It accumulated about 1.5 million large merchandise pieces (Warrick, 2017). In 2003, when Zappos turned for years old, it implemented a free return policy of 60 days (Golden et al., 2017). The approach permitted many customers to buy many pairs of various shoe sizes and returned at no cost those that did not fit them well. Zappos has stood strong in the online retail of footwear, unlike other businesses, because they provide the best customer service. The company spent more on the shipping of both orders and returns, but the decision has seen them retain their customers longer. By the end of 2003, the company decided to offer to their customers 365 days to return their shoes so long as they looked a bit new and in their original boxes of purchase (Yugendar & Ali, 2017).

In 2004, the Zappos company relocated to Nevada (Golden et al., 2017). It was Hsieh's decision after a brief discussion with the company's employees during the lunch hour. It became progressively tough to hire personnel for the customer service in San Francisco as many of its residents viewed it as a temporary job. Tony Hsieh, however, knew that the quality of customer service in the business was fruitful and of great benefit, as it facilitates a company's growth into different heights of success (Burke, 2016). The decision to move the company to Nevada in Henderson from San Francisco shocked many of the company's employees. It made a population of 70 out of 90 original workers to move to the desert. The 70 workers hanged around in their own company in the new location in Nevada, Henderson, since they were strangers there (Kumar & Mukherjee, 2018). The decision taught the culture of work among the employees. It aided the building of the company's brand in its new location, a fact that improved its customer services.

Zappos later broadened its duration of services to 24 hours in a day, seven days in a week, and 365 days in a year, shortly after its relocation to Henderson in 2004 (Burke, 2016). It adopted the technique of service delivery via its employees through the Zappos' Customer Loyalty Team (CLT). The company then managed to hire a range of 5 to 10 fresh agents after every fortnight (Golden et al., 2017). The rapid growth facilitated the employment of 100 workers in the customer service section, among the overall 400 workers (Warrick, 2017). The customer service, therefore, became unique as there were neither limits of phone calls nor scripts. An interaction calls between the Zappos' Customer Loyalty Team and a customer lasted for even as long as 6 hours (Burke, 2016). The conversation, however, could not be about shoes the entire time. Still, it did create strong and emotional ties with customers; any topic of conversation tolerated for the sake of gaining customers' trust and loyalty.

In 2005, the Zappos Company created a program referred to as the boot camp for the service of the customers, and it still applies as a necessity in the orientation of the new employees in the organization (Golden et al., 2017). In the course of the beginning three weeks of the program, new workers absorb the culture of the company, the program for the customer service, the system of inventory management, as well as work with the experienced colleague in the center of customer contact. In the final week of the program, employees go to the company's fulfillment center. Here, they pick, pack, and ship orders and engage themselves in other management tasks related to the inventory. After the boot camp, each employee receives $100 to quit (Eremina & Puhakka, 2017). According to the company's CEO Tony Hsieh, the extra cash and the boot camp facilitates the entire company to release those workers who cannot be of long-term cultural fit. Zappos offered new employees an amount equivalent to a month's salary to quit in the program of the customer service boot camp (Yugendhar & Ali, 2017).

In 2006, Swinmurn, Hsieh, and Mossler all took every candidate for the job through interviews (Kumar & Muhherjee, 2018). It aimed at ensuring that each new employee that is hired by the company is suitable and fit to work for them. As time went by, the company in Henderson experienced rapid growth and interviewing new candidates for the job wasted a lot of time. A member of the Zappos legal department emerged with an opinion of the creation of core values to act as the guiding principles in the encounter of hiring new employees. Tony Swinmurn consulted all the workers at the Zappos company for opinions towards their input on the company's core values. Out of all the suggestions made by the employees, 37 beliefs emerged and refined. Out of that, ten core values for the Zappos company were born on the 14th of February in 2006 (Golden et al., 2017).

The Stakeholders in the Zappos Company

The major stakeholders of the Zappos shoe company are inclusive of its founder Nick Swinmurn, its investors Tony Hsieh and Alfred Lin, and other members like Fred Mossler. Nick Swinmurn founded the ShoeSite company, which is now the Zappos company (Burke, 2016). He generated the idea of venturing into the business of online retail of shoes in 1999 after spending a whole day looking for specific types of boots in the entire San Francisco when his motive for finding them became unsuccessful (Warrick, 2016). He had visions that the business would also incorporate online sales, and 30% of the entire transactions in the United States of America would be online. He also intended to make the business have the best service possible as well as offering the best selections of products. He had planned to make it an online store. He intended to appeal to the customers about the first acknowledgment regarding the power of selection of product brands.

Tony Hsieh is another active Zappos stakeholder who had enabled the prosperity of the current Zappos company into a renowned global investment as opposed to when they started it about twenty years ago. He gave a hand to Nick during the launching of the then ShoeSite as invested in Nick's idea with an amount worth $2million from his other investment firm called Venture Frogs (Golden et al., 2017). Alfred Lin also took part in investing in the business by complementing Hsieh's contribution from the Venture Frogs into launching Nick's idea (Burke, 2016). Fred Mossler is a former vice president of Merchandise in the company who executed his roles in seeing Zappos grow into what it is now (Warrick, 2017).

External Factors that Necessitate the Growth and Success of Zappos Company

Zappos operates at a design of sustainability (Golden et al., 2017). Zappos believes that sustainability is essential to the business as well as the planet. The downtown headquarters of Zappos in Las Vegas made to establish the blending of Zappos' outstanding culture of customer service with one of the Urban communities in Las Vegas, while at the same time putting into consideration the environmental effects of its presence in the Southwest. Zappos has a focus on connectivity with the community (Warrick, 2017). In a city known for its overindulgence and neon, the company's downtown branch redirects its concentration back to the responsibilities concerning the environment and social being, by emphasizing on urban density and connectivity of the community. The company also focuses on the conservation of energy (Burke, 2016). Its downtown headquarters performs better because of its re-designation, thus branch with efficient energy. Its location at the heart of the urbanized place, the retrofitted branch, is lately incorporating many features that lower the consumption of fossil fuel.

Zappos company also focuses on the issues concerning the conservation of water (Eremina & Puhakka, 2017). Due to its consciousness about its branch location in the Desert of Mojave, its renovation is intending to increase water efficiency as well as reduce the burden on water supply by the municipal and systems of wastewater. The company's headquarters received six credits in total, inclusive of the bonus one, under the category of the LEED water. The company focuses on the choice of materials. The company decided great importance by reusing an existing building of about 300,000 square feet building for its branch (Burke, 2016). Adopting the strategy of reuse effectively lowered the potential emissions of the greenhouse gas that result from the new constructions and demolition. Besides, the execution of the project conformed to the framework of LEED materials and resources, which is inclusive of environmentally concerned options regarding furnishings and carpeting, as well as cleaning products and paints (Eremina & Puhakka, 2017). The company also focuses on recycling and the health of air quality, among others.

Internal Factors that Has Necessitated the Growth and Success of the Zappos Company

The internal organizational factors also facilitate the current success of the Zappos Company. It h...

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Zappos: Online Clothing & Shoe Company Established in 1999. (2023, May 30). Retrieved from

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