Please respond to the following:
From the Zappos articles, evaluate the different way(s) that Zappos creates a superior customer service experience. Describe how operations and management activities impact the management of goods and services that Zappos provides.
Compare the customer service experience at Zappos with the service provided at a store you shop from often, and highlight the differences in how the customer service is best delivered.
7/5/22, 5:18 AM EBSCOhost
Zappos Cofounder Tony Hsieh, 46: The entrepreneur cofounded Zappos
in 1999 and pioneered many of the online and corporate strategies in
WWD: Women’s Wear Daily. 11/30/2020, p3-3. 1/2p.
Hsieh, Tony, 1973-2020
Hsieh, a serial entrepreneur, cofounded Zappos in 1999 and grew it into
a blockbuster business before selling it to Amazon in 2009. In 2009,
Zappos was acquired by Amazon.com Inc. for 10 million shares of
Amazon stock, which, at the time of the deal, Hsieh said was valued at
about $1.2 billion. [Extracted from the article]
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Zappos Cofounder Tony Hsieh, 46: The entrepreneur cofounded Zappos in 1999 and
pioneered many of the online and corporate strategies in use today
Tony Hsieh, the Zappos.com luminary who revolutionized the shoe business and established a unique
corporate culture along the way, has died at age 46.
Hsieh’s family confirmed his death Friday night in a text message to friends, noting that Tony’s generous spirit
touched the lives of countless people and that he left an indelible mark on the world.
The executive died from injuries sustained in a Connecticut house fire, according to press reports citing a
7/5/22, 5:18 AM EBSCOhost
Hsieh, a serial entrepreneur, cofounded Zappos in 1999 and grew it into a blockbuster business before selling
it to Amazon in 2009.
Delivering happiness was the executive’s mantra. As he built Zappos, Hsieh’s chief goal was to redefine the
meaning of company culture. From the beginning, his singular vision set the company apart as a pioneer in
footwear e-commerce and corporate America.
“The world has lost a tremendous visionary and an incredible human being,” said Zappos chief executive
officer Kedar Deshpande in a note to employees on Friday. “We recognize that not only have we lost our
inspiring former leader, but many of you have also lost a mentor and a friend. Tony played such an integral part
in helping create the thriving Zappos business we have today, along with his passion for helping to support and
drive our company culture.”
Hsieh, who retired and stepped down from the Zappos helm this past summer, told WWD’s sister publication
Footwear News last year how much the company had evolved since it was founded two decades ago.
“A lot of our growth and innovation moving forward will be based on thinking about what we’re in the business
of differently,” Hsieh told FN last year, when Zappos celebrated its 20th anniversary. “We used to say we’re a
service company that just happens to sell shoes, and now it’s turned into: We’re a service company that just
happens to sell blank.”
The Zappos origin story is a familiar one — Hsieh shared it in his speaking engagements and in the pages of
his New York Times bestseller, “Delivering Happiness: A Path to Profits, Passion, and Purpose.” And the
100,000-plus visitors who have toured Zappos’ headquarters have been regaled with the tale of a fateful phone
After Zappos cofounder Nick Swinmurn latched onto the idea of selling shoes online, he left a voicemail with
Hsieh’s San Francisco venture capital fund, Venture Frogs, hooking him with one factoid: “It was the fact that 5
percent of a $40 billion shoe business was already being done through mail order,” Swinmurn told FN during a
2009 interview. “That was my big statistic. People were already buying shoes without trying them on.”
Then, after another call to the Nordstrom department store in San Francisco, Fred Mossler eventually jumped
on board, and together the new team set out to change the industry.
Zappos was a pioneer in free shipping and returns, and it didn’t take long for the concept to take hold as e-
commerce took off.
In 2009, Zappos was acquired by Amazon.com Inc. for 10 million shares of Amazon stock, which, at the time of
the deal, Hsieh said was valued at about $1.2 billion.
While many market watchers celebrated the marriage, they also speculated that the new parent could impose
its own culture on the new division. But true to the initial agreement, Zappos has continued to operate
separately from Amazon, maintaining its own leadership team and unique character.
Several years into the Amazon partnership, Hsieh launched The Downtown Project, an initiative to revitalize
downtown Las Vegas.
7/5/22, 5:18 AM EBSCOhost
The goal, Hsieh explained at FN’s 2013 CEO Summit, was to create a neighborhood that is walkable and
community-focused. The Downtown Project is even investing in individuals, helping them realize their dreams
of starting small businesses. “We are thinking of the city as a start-up,” he said. “We want it to be the anti-Strip
— with bars and coffee shops.”
In 2015, Zappos did away with managers in favor of a form of self-organization called holacracy.
In a blog post at the time, Hsieh wrote, “Like all the bold steps we’ve done in the past, it feels a little scary, but
it also feels like exactly the type of thing that only a company such as Zappos would dare to attempt at this
Since its early days, Zappos has functioned as something of an incubator for testing theories about corporate
culture and productivity — long before those ideas became the buzzwords they are today. Much of the credit for
that lies with Hsieh.
“His spirit will forever be a part of Zappos, and we will continue to honor his memory by dedicating ourselves to
continuing the work he was so passionate about,” Deshpande wrote in the note to employees. “Our thoughts
remain with him and his loved ones. Zappos is a family, and we will continue to hold Tony close in our hearts.”
PHOTO (COLOR): Tony Hsieh
By KATIE ABEL
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permission. However, users may print, download, or email articles for individual use. After Hsieh’s Death, Zappos Looks Ahead
Maheshwari, Sapna . New York Times , Late Edition (East Coast); New York, N.Y. [New York, N.Y].22 Mar
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It was never going to be easy to succeed Tony Hsieh, the celebrated chief executive of Zappos, who turned a tiny
online shoe seller into a $1 billion behemoth through an obsessive focus on corporate culture and happy
employees. But Kedar Deshpande took over at a particularly fraught time.
Zappos, which is owned by Amazon, was already navigating remote work and grappling with pandemic-driven
changes in how people shop when Mr. Hsieh abruptly retired in August after two decades, which led Mr.
Deshpande to be named C.E.O. Then in November, tragedy struck: Mr. Hsieh, 46, died from injuries suffered in a
house fire in New London, Conn., sending shock waves throughout the roughly 1,500-person company, as well as
tech and entrepreneurial circles.
Since then, it has been reported that Mr. Hsieh had been behaving erratically for months and that friends had
considered staging an intervention last summer. The revelations brought new scrutiny to the circumstances of his
exit from Zappos.
Mr. Deshpande, who was previously Zappos’s chief operating officer, said that when Mr. Hsieh told him last
summer that he wanted to pursue other projects, he did not push back.
“From my experience working with Tony, Tony always believed in the things that he wanted to change,” Mr.
Deshpande said in an interview, his first as chief executive. “I asked him, ‘Hey, Tony, are you sure?’ And he said,
‘Yes, I want to retire’ — so that was the end of the conversation.”
Now, Mr. Deshpande, 42, is tasked with shepherding Zappos through the late stages of the pandemic and into the
company’s next phase as an online retailer, without Mr. Hsieh’s guidance. He must also show whether the
company’s culture of “fun and a little weirdness” in Las Vegas can survive without its chief architect.
“The Covid situation and everything else going on makes it very tough, particularly with a culture that is built on
physical proximity and happiness associated with that,” Mr. Deshpande said in the Zoom interview, from his home
in Henderson, Nev. But he said he was optimistic about the future, especially given the decade he had spent at
Zappos in different roles.
“The culture is not just one person or two people,” he said.
There was apparently no long-term succession plan when Mr. Hsieh stepped down. Zappos’s board, which
consists of Amazon and Zappos employees, elevated Mr. Deshpande to the role. The company, founded in 1999,
has long functioned as an independent unit within Amazon, which acquired it for $1.2 billion in July 2009 and does
not disclose its financials.
It’s tough for a person to replace a C.E.O. with an outsize personality like Mr. Hsieh, said Erik Gordon, a professor at
the University of Michigan Ross School of Business, who anticipated that Zappos’s culture will face some changes
under new leadership.
“The person who takes over from the founder who created the culture doesn’t have the authenticity or moral
authority that the founder had,” Mr. Gordon said. “Can he maintain the same spirit of fun and a little weirdness and
positive team spirit?”
(Mr. Hsieh did not found the company, but has been referred to as a founder based on his involvement as an
investor and chief executive from its earliest days.)
Mr. Deshpande, who is from Aurangabad, India, came to the United States for a master’s degree in computer
engineering, and joined Zappos after stints at General Electric and PepsiCo. He joins a growing list of South Asian
chief executives in the United States, at companies like Microsoft; Google’s parent company, Alphabet; and Gap.
Zappos, which derives its name from “zapatos,” the Spanish word for shoes, was an early e-commerce success
story under Mr. Hsieh, who wrote a best-selling book in 2010, “Delivering Happiness: A Path to Profits, Passion, and
Purpose.” It argued that a company’s top priority should be its culture and that keeping employees happy
translated into success with customers.
The company, which moved from the Bay Area to southern Nevada in 2004 and now has a campus in downtown
Las Vegas, developed a reputation for being a fun, almost cultlike place to work, where employees regularly
socialized at work and outside the office. The company has claimed that it is harder to get a job at Zappos than it
is to get into Harvard.
Mr. Deshpande said Zappos employees had become closer in some ways in the past year as they brought family or
pets into the remote-work fold.
“When we have Halloween contests, it’s the entire family that is participating,” said Mr. Deshpande, who has two
young daughters. He described packages Zappos sent to employees and their families for activities like planting
herb gardens or performing science experiments.
He guessed that employees would start returning to the office after July 1 and were likely to develop hybrid
schedules with some remote and some in-person work.
While Zappos did not have to struggle with the drop-off at physical stores that so many other retailers did, it did
take a hit early on in the pandemic as shoes and clothing became an afterthought; few people were buying high
heels last March. Sales have recovered since, fueled by demand in the so-called performance and home categories
— think running and hiking shoes, pajamas, athleisure and slippers.
Mr. Deshpande said he was unsure when demand for high heels would return, but anticipated that people would
continue to want comfort as the economy reopened.
Zappos has introduced and expanded ways to smooth out the kinks of online shopping during the pandemic, like
allowing some customers to make returns through UPS home pickups, and making it easier to exchange items. It
also observed that the average length of calls with customer service representatives had increased as people had
more time in a closed-off world. They also left more detailed reviews on products.
One of the company’s biggest goals, and a top priority for Mr. Deshpande in coming years, is figuring out how to
make online shopping less transactional and more like the browsing experiences that people seek out in malls and
department stores. That includes developing new digital magazinelike “verticals” — much like what media
companies create — such as “The Ones,” which is tailored for female sneakerheads and advertised as “powered by
Zappos is also behind VRSNL, a luxury site that has its own web address and no visible link to the shoe site. It
features wares from designers like Dolce &Gabbana and Proenza Schouler. The company has been pouring new
effort into product detail pages and informational videos catered to audiences like new runners, and even co-
developing merchandise and campaigns with the brands it carries.
“What online fails to deliver, which physical delivers today, is around these different experiences,” Mr. Deshpande
said. “Until you actually go and deliver on these experiences, people will go back to the physical, in my opinion, and
they will stay online for only transactional experiences.”
The company refers to these efforts as “experience commerce,” and said the category was driving 25 percent of its
investments. Outside of prompting consumers to explore more, Zappos is also trying to make online shopping
more cohesive — all with the aim of getting consumers to spend more money over time.
“One of the challenges has been that when somebody walks into ‘online,’ somebody looking for a jacket, for
example, we show them inventory next to each other — like a $30 jacket, $50, $100, $300,” Mr. Deshpande said.
“This is a very disorienting experience.”
In his view, all of the efforts are in line with Zappos’s obsessive focus on service for the past 20 years, which he
anticipates remaining its focus for the next 20 years.
While the company is still grieving Mr. Hsieh, Mr. Deshpande said, employees will continue to embody the values
that he championed. He pointed to an instance during the holidays when one employee mentioned children
missing out on meeting Santa Claus during the pandemic, leading to a multidepartment effort to set up Santa
Zoom meetings for children around the country.
“To me, Tony’s legacy is around delivering this happiness to everybody,” Mr. Deshpande said. “This culture he has
created or pioneered, it’s going to be alive.”
Kedar Deshpande succeeded Tony Hsieh as chief executive of Zappos. (PHOTOGRAPH BY BRIDGET BENNETT
FOR THE NEW YORK TIMES) (B1); The Las Vegas headquarters of Zappos. Tony Hsieh, below, the company’s
celebrated leader, died in November from injuries suffered in a house fire. (PHOTOGRAPHS BY ETHAN
MILLER/GETTY IMAGES; BRAD SWONETZ FOR THE NEW YORK TIMES) (B7)
Subject: Corporate culture; Electronic commerce; Chief executive officers; Retailing industry;
Footwear industry; Strategic management
Business indexing term: Subject: Corporate culture Electronic commerce Chief executive officers Retailing
industry Footwear industry Strategic management
Location: United States–US
People: Deshpande, Kedar; Hsieh, Tony
Company / organization: Name: Zappos.com Inc; NAICS: 454110, 458210
Lexile score: 1570 L
Publication title: New York Times, Late Edition (East Coast); New York, N.Y.
Publication year: 2021
Publication date: Mar 22, 2021
Publisher: New York Times Company
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: General Interest Periodicals–United States
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Copyright: Copyright New York Times Company Mar 22, 2021
Last updated: 2022-05-09
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After Hsieh’s Death, Zappos Looks Ahead