1. Zappos: Happiness in a Box Case Study: Stanford School of Business CSUCI BUS 550 The Contemporary Firm Jon Hollister
“Marketing raises brand awareness, but customer experience builds brands”

2. Zappos: Happiness in a Box Case Study: Stanford School of Business CSUCI BUS 550 The Contemporary Firm Jon Hollister
Founded in 1999 by Nick Swinmum in San Francisco, CA
Swinmum couldn’t find a pair of Airwalks he wanted at the local mall
Received $2.0M in venture capital from Venture Frogs
Tony Hsieh – became CEO
Alfred Lin – became COO/CFO

3. Zappos: Happiness in a Box Case Study: Stanford School of Business CSUCI BUS 550 The Contemporary Firm Jon Hollister
Business model:
E-commerce distribution channel for the footwear industry
Offer a wide selection of shoes
Have exceptional customer service and experience
Drop ship – no inventory risk

4. Expanded from footwear in early 2000’s into:
Zappos: Happiness in a Box Case Study: Stanford School of Business CSUCI BUS 550 The Contemporary Firm Jon Hollister
Expanded from footwear in early 2000’s into:
Handbags, eyewear, jewelry, watches, clothing, travel accessories.
Switched from drop ship to holding inventory in 2002
Currently the largest footwear retailer with sales > $1.0B
Handle 5,000-6,000 calls and 1,200 s/day
1,500 employees, headquartered in Las Vegas, NV
75% of customers are repeat customers
Acquired by Amazon in 2009 for $1.2B.

5. Zappos: Happiness in a Box Case Study: Stanford School of Business CSUCI BUS 550 The Contemporary Firm Jon Hollister
Company Ethos
Brand – focus on customer service (your customer is your brand)
Culture – One rule: “Be real and use your best judgment”
Pipeline – Offer personal and professional growth opportunities
If you get the culture right, the other stuff will happen naturally”, Tony Hsieh, CEO Zappos

6. Zappos: Happiness in a Box Case Study: Stanford School of Business CSUCI BUS 550 The Contemporary Firm Jon Hollister
Zappos success due to:
Excellent customer service
Strong corporate culture
Large selection of footwear
Fast distribution
Wide social media presence

7. Zappos: Happiness in a Box Case Study: Stanford School of Business CSUCI BUS 550 The Contemporary Firm Jon Hollister
Customer service
Zappos strives to be the industry leader in customer service
700 + customer service team
365 day return policy
Free shipping both ways
24/7/365 customer service
Go above and beyond – “WOW’ing” the customer
Forbes: The 10 Most Customer-Obsessed Companies In 2018

8. Zappos: Happiness in a Box Case Study: Stanford School of Business CSUCI BUS 550 The Contemporary Firm Jon Hollister

9. Social Media Encourages employees to use Twitter
Zappos: Happiness in a Box Case Study: Stanford School of Business CSUCI BUS 550 The Contemporary Firm Jon Hollister
Social Media
Encourages employees to use Twitter
Tony Hsieg has 2.5M followers
Encourage customer feedback on social media

10. Zappos: Happiness in a Box Case Study: Stanford School of Business CSUCI BUS 550 The Contemporary Firm Jon Hollister
Distribution
Close relationship with shipper (UPS)
Fast free shipping considered a marketing expense
Located D.C. close to UPS main airfreight hub in Kentucky
Encourage returns to drive sales
Deliver fast (air), return slow (ground).

11. Multiple choice questions
Zappos: Happiness in a Box Case Study: Stanford School of Business CSUCI BUS 550 The Contemporary Firm Jon Hollister
Multiple choice questions
What product did Zappos start selling first?
Apparel
Auto parts
Shoes
Accessories
What is Zappos best known for?
Wide selection
Competative prices
Fast shipping
Excellent customer service
All of the above

12. Discussion questions:
Zappos: Happiness in a Box Case Study: Stanford School of Business CSUCI BUS 550 The Contemporary Firm Jon Hollister
Discussion questions:
How can Zappos remain competative when not competing on price (since they aren’t the cheapest)?
Can the transparency that Zappos expounds on social media potentially hurt them? If so, how?
What could be a potential disrupter?

13. Zappos: Happiness in a Box Case Study: Stanford School of Business CSUCI BUS 550 The Contemporary Firm Jon Hollister
Bibliography:
Zappos: Happiness in a Box. Stanford Graduate School of Business, Sept, 2010