Blue Dots Partners

In 1998, Nick Swinmurn was frustrated because he could not put his hands on a pair of brown Airwalks that fit him at his local mall in San Francisco. Some stores had the wrong color, others the wrong size. He came back home with no Airwalks. A few months later, he discussed with Tony Hsieh and Alfred Lin about the idea of selling shoes online and shortly after, Shoesite.com was born. Inspired by the name Amazon, that did not restrict Jeff Bezos to sell other things than books, the name of the company was quickly changed to Zappos. Interestingly, if you go to www.shoesite.com, you are automatically directed to guess what? Yes, Zappos indeed! Imagine Amazon being initially called Booksite.com?

The word Zappos come from the Spanish word zapatosfor shoes. A second “p” was quickly added to make sure people would not pronounce it zay-posand the rest is pretty much history.

Today, Zappos has extended its business beyond footwear. The site offers bags & handbags, clothing, accessories, jewelry, watches, sunglasses, travel accessories and luggage. Like Amazon that quickly expanded from its initial focus on books, Zappos extended its business outside its initial focus on shoes.

In January 2000, a letter arrived at the Zappos office. No, it was not a complaint, but a delighted customer who was singing the praises of the phone call she just experienced with a Zappos representative. While the two pairs of shoes she was interested in were not available, the efficiency and kindness of the Zappos Customer Loyalty Team really made an impression on her plus a gift certificate and a t-shirt that was sent to her for the inconvenience. The “Zappos way” was born.

In early 2005, Tony Hsieh asked ever single employee what the core values were at Zappos and distilled the 37 ideas that he gathered into what is known now as the “10 Core Values.” Here is what they are:

1. 1.    Deliver Wow Through Service
2. 2.    Embrace and Drive Change
3. 3.    Create Fun and A Little Weirdness
4. 4.    Be Adventurous, Creative, and Open-Minded
5. 5.    Pursue Growth and Learning
6. 6.    Build Open and Honest Relationships with Communication
7. 7.    Build a Positive Team and Family Spirit
8. 8.    Do More with Less
9. 9.    Be Passionate and Determined
10. 10.  Be Humble

In November 2009, in an unsurprising move given the natural fit, Amazon acquired Zappos for close to $900 million. Alignment between the two companies along shared goals and the relentless obsession for a delightful customer service sealed the marriage. In a smart move, Amazon agreed to let Tony run the company independently and keep its culture and way of engaging with customers intact.

In his email to all employees on July 22, 2009, Tony wrote:

“Amazon focuses on low prices, vast selection and convenience to make their customers happy, while Zappos does it through developing relationships, creating personal emotional connections, and delivering high touch (“WOW”) customer service.”

The transaction was motivated by a strong belief from management and the Board that it will accelerate the growth of the Zappos brand and help them fulfill their mission of delivering happiness faster. Indeed, growing and spreading happiness is the mission of the company.

From a tiny apartment in San Francisco to the former City Hall in downtown Las Vegas, the 1,500 Zappos employees work shoulder to shoulder to deliver the best customer experience and have demonstrated that a large and growing business can grow pretty much entirely on the productization of the A3 axis of alignment: the alignment between the purchase process and the sales process via an easy, friendly and exciting way of product acquisition.

It’s part of the company’s DNA to put the customer front and center. In fact, if you visit Zappos’ headquarter in Vegas, the entire office space is designed around the “heroes”, the customer support agents. The ones who don’t mind spending time with customers to really listen and make them as happy as possible. The ones who are not scripted and can connect with customers with their own style and personality. Tony Hsieh sits in the same size cubicle as everyone else and in the middle of his team.

On June 10, 2016, Zappos customer support employee Steven Weinstein broke an unprecedented record and spent 10 hours and 43 minutes. The call started with some help on placing an order and expanded into a long chat covering all kinds of topics like vacation, restaurants, places they visited. Weisntein took only one break and his colleagues made sure he had water and food.

What’s unique about Zappos is that the product is not the shoes, it is not their eCommerce website. It is the way customers are handled, it is the pre- and post-sales support. This is what Zappos is all about. Few companies understand the criticality of the A3 axis alignment in our methodology. Zappos pushed it very far and it is, no doubt, the key reason for their success.