If the shoe fits, wear it. If not, Zappos.com will gladly take it back at no cost to you. Zappos.com has become the #1 seller of shoes online (ahead of J.C. Penney) by stressing customer service. It stocks 3 million pairs of shoes, handbags, and apparel and accessories, specializing in some 1,000 brands that are difficult to find in mainstream shopping malls. Through its website (and 7,000 affiliate partners), Zappos.com distributes stylish and moderately priced footwear to frustrated and shop-worn customers nationwide. The company was founded by its former chairman, Nick Swinmurn, following a botched mall-based shoe quest in 1999. A decade later, Zappos.com was acquired by online giant Amazon.com.
Zappos.com was purchased by Amazon in November 2009 in an all-stock deal valued at about $890 million. The online footwear and apparel retailer's employees received $40 million in cash and restricted stock. As part of the deal, Amazon retained Zappos.com's existing management, its brand name, and its Las Vegas headquarters. By buying Zappos.com, Amazon became an expert in online shoe sales overnight. For the shoe e-tailer, being part of the giant Amazon organization fuels its future growth prospects.
In addition to its namesake website, the e-tailer operates these specialty sites: Couture.zappos.com, Outdoor.zappos.com, Rideshop.zappos.com, and Running.zappos.com.
Despite its commitment to customer service, Zappos.com in early 2011 cut off its Canadian clients due to high brokerage fees and confusing shipping policies for cross-border orders. As a result, the shoe retailer, which also operated the canada.zappos.com website, ceased selling in Canada in April. Also, Zappos plans to move its headquarters in 2013 to the former city hall building in downtown Las Vegas.
In its 10 years in business before being bought by Amazon, Zappos.com's sales increased from about $1.6 million in 2000 to almost $1.2 billion in gross sales in 2009. The firm has moved way beyond shoes to boost sales with the aim of becoming an e-tailer that sells "anything and everything," adding apparel, bags, jewelry, watches, ties, eyewear, and even electronics to its online store. While Amazon does not break out Zappos.com's sales, the CEO of Zappos, Tony Hsieh, says business is booming, with a 50% increase in sales vs. the prior year in the first quarter of 2010. The firm also hired about 2,000 employees (seasonal and full-time) in 2011.
Under Amazon, Zappos.com is continuing to leverage its unique culture and crazed devotion to customer service to succeed and grow. While the company has maintained a quasi-independent status, it has joined forces with its giant parent where it makes sense to do so. In 2011 it integrated its operations with Amazon's warehouse management system and in 2012 opted to allow Amazon to take over its Kentucky fulfillment center operations rather than build a new warehouse there. – less