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Zappos.com is an online shoe and clothing retailer based in Las Vegas, Nevada.[1] The company was founded in 1999 by Nick Swinmurn and launched under the domain name Shoesite.com. In July 2009, Amazon acquired Zappos in an all-stock deal worth around $847 Million.[2][3][4][5]

Zappos.com
Zappos logo.png
Screenshot
Zappos.com screenshot.jpg
Type of site
Subsidiary
FoundedJuly 12, 1999; 19 years ago (1999-07-12)
HeadquartersLas Vegas, Nevada, U.S.
Warehouse: Shepherdsville, Kentucky, U.S.
OwnerAmazon
Founder(s)Nick Swinmurn
Key peopleTony Hsieh (CEO)
Alfred Lin (Ex Chairman, COO & CFO)
Fred Mossler
Steve Hill (Ex VP of Merchandising)
Arun Rajan (COO & ex CTO)
IndustryRetail
ProductsShoes, handbags, eyewear, accessories, clothing
RevenueUS$1 billion (2009)
Employees1,500+
ParentAmazon
Websitezappos.com

Contents

Company historyEdit

InceptionEdit

 
Zappos CEO Tony Hsieh

Zappos was founded in 1999 by Nick Swinmurn, who says that his initial inspiration came when he failed to find a pair of brown Airwalks at his local mall.[5] That same year, Swinmurn approached Tony Hsieh and Alfred Lin with the idea of selling shoes online.[6] Hsieh was initially skeptical, and almost deleted Swinmurn's voice mail.[7] After Swinmurn mentioned that "footwear in the U.S. is a 40 billion dollar market and 5% of that is already being sold by paper mail order catalogs," Hsieh and Lin decided to invest $2 million through their investment firm Venture Frogs.[7] The company was officially launched online in 1999 as "ShoeSite.com."[8]

In July 1999, the company's name was changed from ShoeSite to Zappos after "zapatos," the Spanish word meaning "shoes."[8] In 2000, Venture Frogs invested capital into the business and allowed Zappos to move into their office space.[9] In 2001, Hsieh came on board as co-CEO with Nick Swinmurn.[9]

GrowthEdit

 
Zappos.com former headquarters in Henderson

From 1999 to 2000, Zappos earned $1.6 million in gross sales.[8] In 2001, Zappos brought in $8.6 million, a significant increase from the previous year.[8] In 2004, Zappos reached $184 million in gross sales and received a $35 million investment from Sequoia Capital.[8][10] That same year, they moved their headquarters from San Francisco to Henderson, Nevada.[7] Over the next three years, Zappos doubled their annual revenues, hitting $840 million in gross sales. By 2007, the company expanded to include handbags, eyewear, clothing, watches, and kids’ merchandise.[11][12] In 2008, Zappos hit $1 billion in annual sales. One year later, they debuted at No. 23 on Fortune's Top 100 Companies to Work For.[13][14] In the early 2000s, Zappos made the decision to move away from its original business model wherein the company does not manage any inventory. Hsieh noted, "Even though it was hard to walk away from sales at a time when nobody is offering you money, we couldn't distinguish ourselves in the eyes of our customers if we weren't going to control the entire experience. We had to give up the easy money, manage the inventory, and take the risk."[15]

Amazon subsidiaryEdit

In 2009, Zappos announced an acquisition by Amazon.[16] Within Zappos’ board of directors, two of the five—Hsieh and Alfred Lin—were primarily concerned with maintaining Zappos company culture, whereas the other three wanted to maximize profits in a down economy.[7] Initially, Hsieh and Lin planned to buy out their board of directors, which they estimated would cost $200 million. In the midst of this, Amazon executives approached Zappos with the proposition of buying the company outright. After an hour-long meeting with Amazon CEO Jeff Bezos, Hsieh sensed that Amazon would be open to letting Zappos continue to operate as an independent entity, and started negotiations.[7] On July 22, 2009, Amazon announced that it would buy Zappos for $940 million in a stock and cash deal.[17][18][19] Owners of shares of Zappos were set to receive approximately 10 million Amazon.com shares, and employees would receive a separate $40 million in cash and restricted stock units.[19] The deal was eventually closed in November 2009 for a reported $1.2 billion.[17]

On June 22, 2012, Zappos announced it would be handing operations of its Kentucky warehouse to Amazon on September 1, 2012.[20] The outlet housed in the Kentucky warehouse remains open, but the name was changed to 6 pm outlet.[21]

2012 hacking incidentEdit

On January 16, 2012, Zappos announced that its computer system was hacked, compromising the personal information of 24 million customers. In response, the company required all of its customers to change their passwords on the site, though it noted that it was highly unlikely that password information was obtained due to encryption.[22] This incident led to a class action suit In re Zappos.com, Inc., Customer Data Security Breach Litigation, with plaintiffs claiming that Zappos did not adequately protect their personal information.[23]

New headquartersEdit

 
Old Las Vegas City Hall prior to renovation and becoming new headquarters

On September 9, 2013, Zappos moved their headquarters from Henderson, Nevada to the former Las Vegas City Hall building in downtown Las Vegas, after an effort to renovate the building.[24][25][26][27] CEO Tony Hsieh, at the time stated that he wanted "to be in an area where everyone feels like they can hang out all the time and where there's not a huge distinction between working and playing."[28] The move was lauded by Las Vegas mayor Oscar Goodman who said "This move will bring about a critical mass of creative persons to the inner core of Las Vegas in addition to causing a significant shot in the arm for the economy and for new jobs."[28][29]

ProductsEdit

 
The Zappos fulfillment center in Kentucky

As of 2010, shoes accounted for about 80% of Zappos' business.[30] As of 2007, Zappos had expanded their inventory to include clothing, handbags and other accessories, which accounted for 20% of annual revenues. Zappos executives stated that they expected that clothing and accessories would bring in an additional $1 billion worth of revenue, as the clothing market is four times the size of the footwear market.[30][31][32]

The company sells many different types of footwear, including vegan shoes.[33] In 2004, they launched a second line of shoes called Zappos Couture.[34]

Social mediaEdit

CEO Tony Hsieh encourages his employees to use social media networks to put a human face on the company and engage with customers, following their core value #6: "Build Open and Honest Relationships With Communication.".[35] Zappos employees maintain an active presence on:

  • Twitter: Zappos run its own Twitter microsite for its 500 employees registered on Twitter. Among them, Tony Hsieh is one of the most followed persons on Twitter with 2.75[36] million followers.[37] Employees are encouraged to use their Twitter accounts for casual communication rather than promotions or marketing pitches, in an effort to humanize the company, like when Hsieh tweeted before going onstage at a tech conference: "Spilled Coke on left leg of jeans, so poured some water on right leg so looks like the denim fade."[38]
  • YouTube
  • Facebook
  • Corporate blogs: Zappos runs several blogs[39] covering topics related to its business.

Corporate programs & sponsorshipsEdit

In 2008, Zappos launched Zappos Insights, a video subscription service aimed at Fortune 1 million companies that are looking to improve their company operations and customer service. The service allows participants to ask questions to and receive answers from Zappos employees.[40]

Zappos Insights also offers a three-day bootcamp where participants visit the headquarters and have meetings with Zappos executives.[41][42]

In 2007, Zappos acquired 6pm.com from eBags, Inc. The site sells shoes and accessories.[43][44]

Zappos sponsors the "Zappos Rock 'n' Roll Las Vegas Marathon and ½ Marathon," which draw 28,000 runners each year. They also sponsor the Zappos WCC basketball championships. During the tournament, Zappos hosts "Kidz Day," which outfits local Las Vegas kids with a new pair of shoes and an event T-shirt.

RecognitionEdit

Zappos was ranked 23rd on the Fortune magazine's list of "100 Best Companies to Work For" in 2009, 15th in 2010, sixth in 2011, dropping slightly to 11th in 2012.[14][45][46][47]

ReferencesEdit

  1. ^ Max Chafkin (2006). "How I Did It: Tony Hsieh, CEO, Zappos.com". Inc.com. Retrieved October 11, 2007.
  2. ^ "Amazon.com, Inc, Form 8-K, Current Report, Filing Date Jul 22, 2009" (PDF). secdatabase.com. Retrieved April 25, 2018.
  3. ^ Wauters, Robin (November 2, 2009). "Amazon Closes Zappos Deal, Ends Up Paying $1.2 Billion". TechCrunch. Retrieved January 28, 2010.
  4. ^ Hsieh, Tony (June 1, 2010). "Why I Sold Zappos". Inc. Retrieved June 8, 2010.
  5. ^ a b Jacobs, Alexandra. Happy Feet: Inside the online shoe utopia The New Yorker. September 14, 2009.
  6. ^ I Am CNBC Tony Hsieh Transcript Archived June 12, 2011, at the Wayback Machine CNBC. August 15, 2007.
  7. ^ a b c d e Hsieh, Tony. How I Did It: Tony Hsieh, CEO, Zappos.com Inc. Magazine. September 1, 2006.
  8. ^ a b c d e Staff, F. N.; Staff, F. N. (May 4, 2009). "Zappos Milestone: Timeline". Footwear News. Retrieved December 13, 2018.
  9. ^ a b Zappos Milestone: Q&A with Nick Swinmurn. Footwear News. May 4, 2009.
  10. ^ Marshall, Matt. Sequoia’s bet on Zappos. Silicon Beat. October 29, 2004.
  11. ^ Chessman, Kristin. Young Millionaires Who Made It Bigger. Entrepreneur. October 5, 2007.
  12. ^ McDonald, Duff. Case Study: Open Source at Zappos. Baseline Magazine. November 10, 2006.
  13. ^ Mitchell, Dan. Shoe Seller's Secret of Success. The New York Times. May 24, 2008.
  14. ^ a b 100 Best Companies to Work For. Fortune. 2009.
  15. ^ "Tony Hsieh: Redefining Zappos' Business Model". BusinessWeek. Retrieved May 23, 2015.
  16. ^ Staff, W. S. J. (July 22, 2009). "Zappos CEO's Letter to Staff". WSJ. Retrieved December 13, 2018.
  17. ^ a b Lacy, Sarah. Amazon Buys Zappos; The Price is $928m., not $847m. TechCrunch. July 22, 2009.
  18. ^ McCarthy, Carolone. Amazon to snap up Zappos. CNet News. July 22, 2009.
  19. ^ a b Letzing, John (July 22, 2009). "Amazon buys retailer Zappos in $807 million deal". MarketWatch. Retrieved July 24, 2009.
  20. ^ "Zappos sheds its Kentucky warehouses". Las Vegas Review-Journal. June 7, 2012. Retrieved July 12, 2018.
  21. ^ "Zappos shoe warehouse makes it possible to return from Louisville well-heeled". Pittsburgh Post-Gazette. Retrieved July 2, 2018.
  22. ^ Goldman, David. "Zappos hacked, 24 million accounts accessed". CNNMoney. Retrieved July 12, 2018.
  23. ^ Bell, Jennie (March 9, 2018). "Court Reopens 2012 Zappos Data Breach Litigation". Footwear News. Retrieved July 12, 2018.
  24. ^ Joe, Schoenmann (September 9, 2013). "Joe Downtown: Historic day for city's center as Zappos makes itself at home". Las Vegas Sun. Retrieved December 4, 2013.
  25. ^ Kozar, Matt. "New details emerging about Zappos's planned move to Las Vegas City Hall". KSNV NBC Las Vegas. Retrieved December 2, 2010.
  26. ^ Schoenmann, Joe. How Zappos’ move to downtown Las Vegas was sealed Las Vegas Sun. Dec. 6, 2010.
  27. ^ Landau, Blake. 4 Questions With Tony: What Other Businesses Can Learn from Zappos CMS Wire. December 13, 2010.
  28. ^ a b Medina, Jennifer. Las Vegas Gets New City Hall, and a Mullet. The New York Times. December 26, 2010.
  29. ^ Schoenmann, Joe. Zappos views Las Vegas City Hall as perfect fit for new headquarters. Las Vegas Sun. Nov. 29, 2010.
  30. ^ a b Cheng, Andria Zappos, under Amazon, keeps its independent streak. Market Watch. June 11, 2010.
  31. ^ Evans, Kate. Zappos posted strong profits in 2008. Digital Commerce 360, July 28, 2009
  32. ^ Mui, Ylan. Online Sales Shift: Apparel Outpaced Computers in '06. Washington Post. May 14, 2006.
  33. ^ Fox, Katrina. "Watch Out Jimmy Choo, Luxury Shoes Are Going Vegan". Forbes. Retrieved July 13, 2018.
  34. ^ Slatalla, Michelle. Style by Way of Grandmother’s Closet. The New York Times. October 7, 2004.
  35. ^ Palmer, Kimberly. Want the Best Deals? Check Twitter or Facebook. US News and World Report. July 15, 2009.
  36. ^ "Zappos (@zappos)". Twitter. Retrieved May 23, 2015.
  37. ^ "Who has the most Followers on Twitter? (Top 200)". Twitaholic. Retrieved May 23, 2015.
  38. ^ Chafkin, Max. The Zappos Way of Managing. Inc. Magazine. May 1, 2009.
  39. ^ Christoffersen, Trish. "Zappos Stories". Zappos.com. Retrieved May 23, 2015.
  40. ^ "Zappos Launches Insights Service | Adweek". web.archive.org. December 28, 2014. Retrieved April 23, 2019.
  41. ^ "smSmallBiz.com | Zappos.com Dips Toe Into Management Consulting". web.archive.org. May 7, 2010. Retrieved April 23, 2019.
  42. ^ Cheng, Andria. "Zappos's grand mission doesn't involve selling shoes". MarketWatch. Retrieved April 23, 2019.
  43. ^ Zappos Steps Up to Acquire 6pm.com. Internet Retailer. July 10, 2007.
  44. ^ Dilworth, Dianna. Zappos.com acquires 6pm.com for increased shoe retailing presence. Direct Marketing News. July 10, 2007.
  45. ^ 100 Best Companies to Work For. Fortune. 2011.
  46. ^ 100 Best Companies to Work For. Fortune. 2011.
  47. ^ 100 Best Companies to Work For. Fortune. 2012.

External linksEdit