Zappos.com Update - March 11, 2010

I sent the following email to our "Friends of Zappos" mailing list today:

Dear Investors, Employees, Partners, and Friends of Zappos:

It's been awhile since I last sent an update to our "Friends of Zappos" list. So much has happened over the past year!

Despite a tough economic environment, we continued growing in 2009, finishing the year doing nearly $1.2 billion in gross merchandise sales.

As many of you know, back in July 2009 we announced that Amazon was acquiring Zappos:  http://blogs.zappos.com/ceoletter

The transaction officially closed on November 1, 2009. True to their word, Amazon has continued to allow us to run Zappos independently, with our own unique culture, brand, and way of doing business. From our point of view, it's been as if we swapped out our previous board of directors with a new one, but we now have access to a lot more resources so we can continue to build the Zappos business even faster. In fact, over the past few months, we've actually seen our growth rate accelerate compared to the prior year.

In January, we were excited to learn that we made Fortune magazine's "Best Companies to Work For" list again, moving up 8 places to the #15 spot!

A few weeks ago, I had the opportunity to present to about 2000 people at Amazon's "All Hands" meeting in Seattle, in which I talked about our focus on the 3 C's at Zappos:

- Clothing

- Customer Service

- Company Culture

As many of you know, we're making a big push into apparel (which is 4 times the size of the footwear market) as well as other product categories including bags, accessories, and housewares. We think we're just at the tip of the iceberg of what's possible as we continue to build the Zappos brand to be about the very best customer service and the very best customer experience.

The slides from my talk at Amazon are available here:

http://www.slideshare.net/zappos/zappos-amazon-022510

Our sister web site, 6pm.com, has been growing even faster than Zappos.com. From a business perspective, it's been a great way to clear out the older and discontinued inventory that we didn't sell through on Zappos.com.

You can take a look at the 6pm site here: 

http://www.6pm.com

Over the past year, we've made many, many improvements to the Zappos.com web site. If you haven't visited us recently, I would definitely encourage you to play around with the latest incarnation of our web site:http://www.zappos.com In addition to better navigation and a new look and feel, in 2009 we added over 10,000 video product descriptions to the site, and we plan on adding over 50,000 more this year.

We also relaunched our couture web site:

http://couture.zappos.com 

And we relaunched our Zappos Insights web site, where we share how to build strong company cultures with other businesses: http://www.zapposinsights.com

I'm also excited to announce that we have just started a new TV ad campaign, featuring puppets and real phone calls to our (unsuspecting) Customer Loyalty Team:

http://www.nytimes.com/2010/03/05/business/media/05adco.html 

Here's the first of our TV spots (with more to come):

http://www.youtube.com/watch?v=KXbhw3TJhoM

Probably the biggest question I've gotten lately has been "How's the Amazon acquisition been? How have things changed?"

The truth is, there have been a couple of minor annoyances. We're now part of a public company, so moving forward, we aren't able to disclose our financial numbers as freely as we were able to do before (but that would have happened anyway had we gone public on our own). We also have more travel restrictions for various legal and tax reasons.

On the flip side though, we've retained our independence and our culture is as strong as before the acquisition. We've been learning a lot from each other and the new partnership has enabled us to move even faster towards the Zappos vision of delivering happiness to the world.

Over the next several months, I'll be focusing a lot on a personal project of mine: the launch of my first book, "DELIVERING HAPPINESS: A Path to Profits, Passion, and Purpose". The official launch date is June 7, 2010, but I'll be traveling around the country to promote the book both before and after the launch date.

If you're interested in keeping up with the progress of the book, you can visit the book's web site and sign up to receive updates by email and/or Twitter: http://deliveringhappinessbook.com You can also pre-order the book on Amazon: http://amazon.com/deliveringhappiness

The goal of the book is to inspire other companies to think about how to they can use happiness as a guiding principle to make customers happier (by focusing more on customer service) and employees happier (by focusing more on company culture), which ultimately can lead to sustainable profits and long-term financial performance.

It's hard to believe that Zappos will turn 11 years old this year. Going through the process of writing the book made me realize how much we've been through, yet things are as exciting as ever because there's so much growth and opportunity ahead.

Thank you everyone for all your support through the years. We couldn't have gotten this far without you -- there's a lot more to come!

---------------------

Tony Hsieh

CEO - Zappos.com, Inc.

Comments

471714618's picture
Mar 11, 2010 at 6:49 pm TomS4324 said:

Great job Tony. I loved working for your company. Since leaving I have slowly started to re-build my own business with more emphasis on customer satisfaction. I feel strongly that this time my business will be more of a success as long as I remember the core values that I learned while employed at the KY distribution center. Thank you for being an inspiration and role model for other companies to learn from & live by.

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Mar 12, 2010 at 8:08 pm commentbug said:

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468625407's picture
Mar 12, 2010 at 10:18 pm ZC26494 said:

congrats on the book! Looking forward to reading it. One thing though...I heard Zappos started charging for office tours. Doesn't that go against the whole idea of impressing customers to retain customers? When a group of people walk around Zappos for free, see the culture and the amazing company and all their products, they're usually more likely to give that company their business. By charging people for just a tour, doesn't that go against the core value of delivering wow through service a bit?

470723932's picture
Mar 15, 2010 at 8:51 pm Robert Richman said:

You're right! Free tours do WOW customers. That's why we still do them. :)

But some people wanted more. They wanted time to ask more questions and they wanted to schedule tours when they are available (since our free tours are at set times and sometimes get filled up).

The most common feedback we got on our tours was "I wish I could create this kind of culture at my workplace!" And that's why we created advanced tours, meetings with our staff, 1-day trainings, and a 2-day bootcamp in culture.

We consider everyone customers (our buyers, employees, vendors, and tour takers). We always listen to our customers so when they said they wanted more, we gave it to them!

More about all of that here: http://www.zapposinsights.com

Thanks for your note!

473126517's picture
Mar 24, 2010 at 4:23 am Mike Walsh said:

I'm looking forward to watching Zappos grow over the next few years and can't wait to read the book!

40822007's picture
Mar 29, 2010 at 4:50 pm TimT5387 said:

I just returned from Haiti after wotrking in relief of the earthquake victims from Port au Prince. I worked at a small 65 bed hospital in the North of Haiti called Hopital Sacre Coeur. I have a number of young men and women who have lost their legs or other limbs in the quake and the one thing they seem to keep asking me for is a pair of tennis shoes. As a customer of Zappos I thought I would put the word out that we could use a little help with this request. Can you please tell me who I can contact regarding this matter?

Thanks,

Tim Traynor Emergency Ground Coordinator Hopital Sacre Coeur Milot, Haiti

473640320's picture
May 13, 2010 at 5:20 am CraigP8531 said:

Great job on the book Tony. Looking forward to reading the book but I can say that we have had in place several of your 10 major thoughts. Just require better execution. But have had a record year of sales with our new understanding of the word WOW.

http://www.cheapertravelcom

Craig Pavlus

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Jul 15, 2010 at 11:49 pm SerenaM13199 said:

I love love love the 6pm.com outlet here in Kentucky. My husband works there! I am glad to see the company expanding into apparel but I have one complaint-not everyone is a size 4!! Please bring in more women's clothing in bigger sizes. I am not huge, between a 12-14 but shopping at that store makes me feel like a cow because everything there is soooo small! Other than that, keep up the great work!

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