Zappos, based in Las Vegas, is an online retailer. Its initial goal has been to
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Question
Zappos, based in Las Vegas, is an online retailer. Its initial goal has been to be the best Web site for buying shoes, offering a wide variety of brands, styles, colors, sizes, and widths. The zappos.com brand has grown to offer shoes, handbags, eyewear, watches, and accessories for online purchase. Zappos’s vision is that in the future online sales will account for 30 percent of all retail sales in the U.S., and Zappos will be the company with the best service and selection. As a result, Zappos believes it can become the online service leader, drawing customers and expanding into selling other products. Zappos believes that the speed at which a customer receives an online purchase plays a critical role in how that customer thinks about shopping online again in the future, so it is focusing on making sure the items get delivered to customers as quickly as possible.
Zappos CEO Tony Heish has shaped the company’s culture, brand, and business strategy around 10 core values.
They are:
Deliver WOW through Service
Embrace and Drive Change
Create Fun and a Little Weirdness
Be Adventurous, Creative, and Open-Minded
Pursue Growth and Learning
Build Open and Honest Relationships with Communication
Build a Positive Team and Family Spirit
Do More with Less
Be Passionate and Determined
Be Humble
Deliver WOW through Service means that call center employees need to provide excellent customer service.
Call center employees encourage callers to order more than one size or color because shipping and return shipping are free. They are also encouraged to use their imaginations to meet customer needs. Zappos’s employment practices help to perpetuate its company culture. For example, the HR team uses unusual interview questions, such as “How weird are you?” and “What’s your theme song?” to find employees who are creative and have strong individuality. Zappos provides free lunch in the cafeteria (cold cuts) and a full-time life coach (employees have to sit on a red velvet throne to complain). Managers are encouraged to spend time with employees outside of the office, and any employee can reward another employee a $50 dollar bonus for good performance. Most employees at Zappos are hourly. All new hires complete four weeks of training, including two weeks working the phones. New recruits are offered $2,000 to leave the company during training to weed out individuals who will not be happy working at the company.
Due to a downturn in sales, Zappos was forced to cut costs, including laying off 124 employees. Heish handled the downsizing in a positive way. Laid-off employees with less than two years of service were paid through the end of the year. Everyone received six months of paid health coverage. Zappos also allowed laid-off employees to keep their 40 percent employee discount through Christmas.
What challenges is Zappos facing that may derail its attempt to be the best online retailer? How can training and development help Zappos meet these challenges? Do you think that employees at Zappos have high levels of engagement? Why? Which of Zappos’s 10 core values do you believe training and development can influnce the most? The least? Why?
Source: Based on Web site for Zappos, www.zappos.com; J. O’Brien, “Zappos Knows How to Kick It,” Fortune (February 2,
2009): 55–66.
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What challenges is Zappos facing that may derail its attempt to be the best online retailer?
There are couple of challenges Zappos have which hinder its progress and are eventually derailing it from its goal to become best online retailer.
For e.g. as per below statement, the focus is primarily on the speed of product delivery, which is certainly one of the most important factors influencing customer. But there are other things as well for instance quality of product, ease of finding the right product at first instance, upkeep of stock with current and changing market trends and fashion.
“Zappos believes that the speed at which a customer receives an online purchase plays a critical role in how that customer thinks about shopping online again in the future, so it is focusing on making sure the items get delivered to customers as quickly as possible.”
Another example of challenge is present in the customer service, here customers are encouraged to buy additional product of various sizes and color as the delivery and return are free for customers, however it’s an additional cost to Zappos and also a nightmare in inventory management.
“Call center employees encourage callers to order more than one size or color because shipping and return shipping are free. They are also encouraged to use their imaginations to meet customer needs.”
There is lot of focus on, customer delight and enriching the customer experience (customer here includes both internal and external customers i.e. employees and external users), better employee engagement and making work culture / environment more and more employee friendly with additional perks being offered like Free Food, Full time Life Coach etc., the focus of recruitment team is to find talents who are creative and strong individual. The focus of recruitment should also include hiring candidates who are innovative, Tech-savvy, can bring new things to the table to increase the customer delight without increasing the cost.
Cost optimization, optimum resource utilization should be the core principle every individual should practice.
How can training and development help Zappos meet these challenges?
Certainly there is a need for training and development at Zappos, may it be training the customer service employees, may it be the HR team or may it be the development team of Zappos.
Zappos should think of building an in-house strong technical development & support team to develop world-class infrastructure and platform for their website which would change the buying experience of customer. Getting the right product with right size and specification would help both customers and Zappos.
Use of technologies like AI and past buying history of customer can be used to suggest best products for users that would help increase sales as well, and would reduce the delivery and shipping cost of Zappos.
Redundant practices like overselling product and then getting it returned should be completely abandoned.
Do you think that employees at Zappos have high levels of engagement? Why?
No the full potential of employees is not being utilized at Zappos, a proper training and channelization of efforts towards the goal of becoming best online retailer would bring a tangible change. There is certainly a need to create competitive environment within company to increase the sales figures. Employees should be equipped with additional technological tools which would help them analyze customer buying patterns and need, so that they can sell best products with minimum iterations of delivery and return.
Which of Zappos’s 10 core values do you believe training and development can influnce the most? The least? Why?
Following 10 core values can be influenced by training and development
Deliver WOW through Service
Embrace and Drive Change
Be Adventurous, Creative, and Open-Minded
Pursue Growth and Learning
Build Open and Honest Relationships with Communication
Build a Positive Team and Family Spirit
Do More with Less
Be Passionate and Determined
Be Humble
Deliver WOW through Service means that call center employees need to provide excellent
Use of tools and technology along with automation will certainly create a WOW environment. Remaining agile and relevant in the current market is really important and by proper change management and trainings, Zappos can keep up the pace with market. Selling right thing to right customer at right price in first instance would certainly help optimize the cost. Resource optimization is certainly needed. There also a need to overhaul the entire delivery shipment and return policy to ensure there is no additional cost burden on Zappos.
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