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 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.
Sure enough, as Zappos has grown, so has its selection. Founded in footwear, today’s offerings continue to evolve and include clothing, accessories, housewares, beauty, and more. And while the original idea was to offer the best online selection, something happened to sharpen the company’s mission. That something was what is now known as the first WOW letter.
In January of 2000, a customer emailed to describe her recent Zappos shopping experience. She tried ordering two different pairs of shoes, both of which were unavailable, but that wasn’t why she contacted us. It was the fast, courteous response of the Zappos Customer Loyalty Team as well as receiving both a gift certificate and a t-shirt for the inconvenience that WOW’ed her. That feedback changed things for Zappos: What if the company focused not solely on what it sold, but how it sold it? What if Zappos focused on WOWing its customers? “We asked ourselves what we wanted this company to stand for,” said CEO Tony Hsieh, “we didn’t want to sell just shoes. I wasn’t even into shoes - but I was passionate about customer service.”
As the company grew, it became important to find a way to maintain its culture with each new hire. In January of 2005, Tony polled every employee on what they thought Zappos’ core values should be, which resulted in a list of 37 culture ideals. This list provided the foundation and on Valentine’s Day, 2006, Zappos’ 10 Core Values were introduced to the company. The 10 Core Values continue to guide the Zappos culture today in everything from hiring to firing.
In July of 2009, Zappos announced its plan to join the Amazon.com family, and in November of 2009, the acquisition became official. This partnership not only represents a shared goal of offering the best customer service possible, but also provides Zappos the opportunity to grow while staying true to its culture and roots.
In October of 2013, Zappos said goodbye to its home in Henderson, NV and moved into the former City Hall in downtown Las Vegas. With a long-standing focus on clothing, culture, and customer service, Zappos added a 4th "C" with this move: Community.
Rather than having an insular campus, Zappos wanted to relocate into a space where it could be part of the surrounding community. Not only does this new campus allow for the growing needs of the company, but it also provides a venue to regularly hold events open to its new neighbors. Its open-office design encourages interaction and “collisions” between employees to spur creativity and keep the company connected. Daily tours are free and open to the public.
With continual rapid growth comes its own set of challenges. In May of 2013, a small pilot group at Zappos started using Holacracy, a platform of self-organization. Designed to empower everyone in the company and give each employee a voice, Holacracy was then rolled out to the entire company in January of 2014. CEO Tony Hsieh explains how Holacracy can help companies structure and scale for growth: "Research shows that every time the size of a city doubles, innovation or productivity per resident increases by 15 percent. But when companies get bigger, innovation or productivity per employee generally goes down. So we’re trying to figure out how to structure Zappos more like a city, and less like a bureaucratic corporation. In a city, people and businesses are self-organizing. We’re trying to do the same thing by switching from a normal hierarchical structure to a system called Holacracy, which enables employees to act more like entrepreneurs and self-direct their work instead of reporting to a manager who tells them what to do.”
A “bureaucracy buster”, this new platform drives fresh ideas by removing roadblocks and encourages innovation to come from anywhere within the company.
Tony Hsieh often refers to a quote that says, "a great brand is a story that never stops unfolding." Driven by culture, Zappos can’t wait to see how the next chapter unfolds!