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SW3 - Marketing, Sales & Promotions
Identify a company that uses the Internet for marketing, sales, and promotions. Answer the
following questions for the company of your choice.
1. What is the name of the company? Provide the company logo.
2. What is the URL of the company home page?
ZAPPOS.COM
3. History:
-- -- - a. Who founded it and when?
Nick Swinmurn: Zappos' silent founder
The year was 1998, and Zappos.com founder Nick Swinmurn was walking around a mall in
San Francisco looking for a certain pair of shoes.
One store had the right style, but not the right color. Another store had the right color, but
not the right size. Nick spent the next hour in the mall, walking from store to store, finally
going home empty-handed and frustrated.
Nick didn’t have any more luck at home, because although there were a lot of mom-and-
pop stores selling shoes online, there were no major online retailers that specialized in
shoes. Seeing both a need and an opportunity, Nick quit his day job and started an online
shoe retailer, Shoesite.com. Not wanting to prevent the business from being able to expand
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into other product categories, Shoesite.com needed a name change. “Nick also asked me
what I thought of “Zapos” as the name for the company, derived from zapatos, which was
the Spanish word for “shoes,” recalls Zappos CEO Tony Hsieh. “I told him that he should add
another p to it so that people wouldn’t mispronounce it and accidentally say ZAY-pos.” It
was 1999, and Zappos.com was born.
-- -- - b. Initial products/services and markets?
Products
Zappos’ primary selling base is shoes, which accounts for about 80% of its
business. [32] Currently about 50,000 varieties of shoes are sold in the Zappos store. Zappos
sells many different types of footwear and niche shoe markets, including narrow and wide
widths, hard-to- find sizes, Made in USA shoes, and vegan shoes. In 2004, they launched a
second line of shoes called Zappos Couture. [33]
In 2007, Zappos expanded their inventory to include clothing, handbags, eyewear, watches,
and kids’ merchandise, which currently account for 20% of annual revenues. Zappos
expects that clothing and accessories will bring in an additional $1 billion worth of revenue
by 2015, as the clothing market is four times the size of the footwear market. [32][34][35]
Customer service
On average, Zappos employees answer 5,000 calls a month, and 1,200 e-mails a week
(except in the holiday season, when call frequency increases significantly). [10] Call center
employees don't have scripts, and there are no limit on call times. [36] The longest call
reported is 10 hours 29 minutes. [37]
Zappos employees are encouraged to go above and beyond traditional customer
service. [38][39] In particular, after a late night of barhopping and closed room service, Hsieh
bet a Skechers rep that if he called the Zappos hotline, the employee would be able to locate
the nearest late-night pizza delivery. [40] The call center employee, although initially
confused, returned two minutes later with a list of the five closest late night pizza
restaurants. Inc. Magazine notes another example when a woman called Zappos to return a
pair of boots for her husband because he died in a car accident. The next day, she received a
flower delivery, which the call center rep had billed to the company without checking with
her supervisor. [41]
Zappos often gives "surprise" free upgrades to overnight shipping for
customers, [42][43][44] though their website reports that delivery will take two to five business
days.
--- -- c. Private or public?
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ZAPPOS is a public company.
Zappos.com is an online shoe and clothing shop based in Las Vegas, Nevada. In July 2009,
the company announced that Amazon.com would acquire it in an all-stock deal worth about
$1.2 billion.
-- -- - d. E-company or brick and mortar? (E-company: purely online business // brick and
mortar: with a physical store/office but maintains online presence)
Zappos is a brick and mortar company.
sites such as nordstrom ran both brick-n- mortar plus e-commerce
- make room for shoes campaign using tv,print ( targeted busy professional women who
had little time to shop in stores)
- in store/online returns
4. Financials:
-- -- - a. Most recent year’s revenues?
Zappos Earned $11 Million On $635 Million Of Sales Last Year
No more guessing: We know e xactly what online shoe store Zappos is making, thanks to
an Amazon (AMZN) SEC filing. Amazon bought the company last week in a stock deal worth
roughly $900 million.
Zappos earned $10.7 million last year on $635 million of net revenue, an improvement over
2007, when it made $1.8 million on $527 million of net sales. In the first quarter of this
year, the company made a $221,000 profit on $144 million of net revenue -- an 8.4% year-
over-year growth in sales. Those are the "wafer thin" margins Wall Street was expecting,
given Zappos' liberal return policy and free shipping.
Still, a great brand, a solid deal, and an opportunity for Amazon's massive size to drive
growth -- and bargaining power -- to Zappos.
Meanwhile, TechCrunch's Sarah Lacy scouredAmazon's SEC filing and figured out that
Zappos' founders Tony Hsieh and Alfred Lin got rich off the deal, especially CEO Hsieh.
CEO Hsieh owns 29.4% of the common shares, CFO Lin owns another 2.7% and Venture
Frogs– the firm they started and jointly manage– owns another 39.9% of the shares.
