“Brick and mortar stores are limited in how much inventory they can carry; therefore, they are limited in the number of brands, number of styles per brand, and number of sizes and widths they can carry” (Zappos.com: The Zappos Family Story).
In 1999 Nick Swinmurn started Zappos with the vision: one day, thirty – percent of all retail transactions in the United States will be online, people will buy from a company with the best service and best selection, and Zappos will be that online store (Zappos.com: The Zappos Family Story).
In 2009 Zappos announced its plans to join the Amazon.com family. This acquisition came about as a result of their strong shared passion for customer service (Zappos.com: The Zappos Family Story). One year later Zappos restructured into ten separate companies under the Zappos Family umbrella.
“We believe that the most important key to our success will be our service – oriented culture, and we spend a lot of time and effort on ways to constantly improve our culture” (Zappos.com: The Zappos Family Story). Zappos views shoes as simply their base. With their customer service, they believe expanding into almost any category is possible.
Challenges & Benefits
Zappos is a unique organization. Tony Hsieh, the CEO, believes in and has studied happiness and motivation and uses these as the backbone to the company’s philosophy. Hsieh has core beliefs that have built the company into the empire it is, going from zero to $1 billion in sales in only ten years. Hsieh’s ideas can be summed up as seven principles (WordofMouth.org).
1. Culture is what makes a great brand
2. It doesn’t matter which core values you choose
3. Chase the vision, not the money
4. There’s a difference between motivation and inspiration 5. Measure what matters
6. Who do you want to be when you grow up?
7. Watch Tony’s video
Motivating employees is good, but keeping them happy is the real secret. Hsieh’s motivation starts the moment you join the company. As soon as a new employee has completed training the company tries to get you to leave. Every employee is offered an exit “package” that consists of $2,000. The goal is to only keep those that have the same beliefs and desire to be a part of the company. Companies do not often follow this corporate culture. Given the high cost of recruiting individuals and training, most companies invest; it would cost more money to get them to leave. The recruitment cycle would then begin again. The benefits are endless. If you have the right balance of incentives and motivation, a positive work environment can keep employees happy and more productive.
When Amazon acquired Zappos, Amazon became the only shareholder of the stocks at Zappos. When the acquisition took place, employees at Zappos became concerned with employment status, cultural changes, and vision changes. Before the acquisition was announced, the CEO, Tony Hsieh, made sure to compose a company-wide email to address concerns he felt the employees would have and to validate the acquisition and why the acquisition was taking place. The organization thrives on communication and he felt the need to communicate with the employees before any announcement was released.
Hsieh emphasized early in the email: “We plan to continue to run Zappos the way we have always run Zappos -- continuing to do what we believe is best for our brand, our culture, and our business. From a practical point of view, it will be as if we are switching out our current shareholders and board of directors for a new one, even though the technical legal structure may be different.” . In the email, CEO Hsieh emphasize that Amazon supports Zappos and will share the growth vision and to maintain the culture Zappos built. He apologized for not letting employees know sooner of the acquisition, but, Amazon is a public company and there were security measures set in place that could not be...
Cited: 6 tips from Tony Hsieh on how Zappos delivers happiness | WordofMouth.org. (2012, March 27). Retrieved from http://wordofmouth.org/blog/6-tips-from-tony-hsieh-on-how-zappos-delivers-happiness
Bauer, Talya & Erdogan, Berrin
CNN Money: 100 Best Companies to Work For. (2012). Retrieved from
Hsieh, T. (2009, Juy 22). CEO LETTER. Retrieved from Zappos.com: http://blogs.zappos.com/ceoletter
Zappos.com: The Zappos Family Story. (2013). Retrieved from
Zappos.com: Our Unique Culture. (2013). Retrieved from
Zappos.com: Jobs in the Zappos Family. (2013). Retrieved from
Please join StudyMode to read the full document