Zappos shoes: a service-led business model

Zappos started out selling shoes online in 1999 at the end of the dotcom boom. To compete against existing mail order and home shopping companies the US-based company had to revolutionise its business model around excellent customer service, to craft an engaging culture and develop unique operational features. Three organisational components turned out to be critical: creating a team with diverse strengths, to have the courage to follow their convictions, what employees think is ‘right’, and a passionate approach to work. The highly competitive online market meant that the company had to demonstrate its flexibility to adapt and rapidly learn from its mistakes.
Online retailers can focus their resources on marketing and creating easy user experiences that make their websites more appealing to customers.
Zappos’ success has typically involved a trial and
error approach to improving processes and maximising its customer service. In taking over their Fulfilment Centre and responsibility for the distribution of the product ranges, the company demonstrated its customer-centric practices to deliver products and services as efficiently as possible. For customers this means free returns, sending out a replacement order before the return comes back, honouring returns up to 365 days from date of purchase and other customerfocused activity.
The company found that some its values were known when it started out but others have been discovered on the way: they are both implicit and explicitly stated and employees are not restricted by scripts and rules. The ‘Zappos experience’ replaces selling with an adherence to business precepts: serve a perfect fit, make it effortlessly swift, and play to win (Michelli, 2012).

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