Will Amazon.com Kill Zappos’ Core Values?
July 23, 2009 9 Comments
Amazon.com just purchased Zappos, an up-and-coming online-centric shoe retailer, for $928 million. That’s right, Amazon.com spent nearly $1 billion on a company that earned only $40 million in 2008. Wow!
My take: I’ve been a big fan of Zappos, often writing about the company in this blog. As a matter of fact, my interview with Zappos CEO Tony Hsieh was one of my favorite research interviews over the past few years.
The company was built around, and maintains, a very strong customer-centric culture. At the cornerstone of its culture are Zappos 10 core values:
- 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
Hsieh told me that he hires, fires, and promotes people based on their embodiment of these values.
Hsieh has done a great job of embracing one of the 6 new management imperatives that I’ve defined called Invest in culture as a corporate asset. At the end of the day, Zappos’ key asset is its culture.
Amazon.com obviously expects to get more than $40 million in annual earnings for its $1 billion. If it’s looking for much faster growth, significantly more profitability, or a rapid expansion across categories, then how will these goals affect Zappos’ fanatical focus on in it’s 10 core values?
I hope that Zappos’ culture survives.
The bottom line: Will the Zappos culture thrive or die at Amazon.com?
About Bruce Temkin, CCXP
Customer Experience Matters® 
Hopefully it survives. If not I don’t know where I’m going to buy my shoes. Hopefully I don’t have to pay $25 to get free shipping that takes weeks to get to my house.
Let’s hope the culture of Zappos carries over to Amazon, now that will be powerful.
Rhyde7: There are a lot of people rooting for the Zappos service and culture to survive. What would life be like without that ongoing flow of shoe boxes in the mail?!? 🙂
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The free overnight shipping both ways part. I hope they keep that. It’s that Prize that Godin talks of often, the little “extra” that makes customers come back, that nobody else really offers. Being a female and oft an impulsive shopper when it comes to shoes, it’s a big deal actually, that you can get it “tomorrow.” After all, I think that’s why most of us gals prefer to buy in the store. Browse, try them on, and then, instant gratification. Of course, if they don’t fit, the no-hassle return shipping works well. These “extras” actually also allow them to not have to always compete on price; they don’t have to beat everyone’s prices like Overstock or SmartBargains.
Theresa: Thanks for sharing your thoughts. I think Zappos’ model was well-conceived and built around an understanding of how “you gals” like to shop for shoes. Hopefully Amazon/Zappos continues to cater to your specific shopping needs. My regular readers will likely recognize that what I’m merely talking about is the 1st principle of Experience-Based Differentiation: Obsess about customer needs, not product features.
Amazon will not kill Zappos service- Zappos will! They no longer will be fighting to be at the same table as their big competitors. They will slowly stop being what made them great…(hope I’m wrong, but everything crumbles when it’s exposed in a wider environment).
Scott: Great point. Some of the risk to Zappos comes from the outside forces that Amazon brings, but some of it will also come from inside of Zappos. Will they still think/act like the upstart who has something to prove?!? It’ll be tough to maintain that focus now.
You know Amazon has taken over, because Zappos is now also jacking around the prices…just like Amazon does.
As long as Tony and Jen are at the helm, Zappos will remain true to its roots…also, why would Zappos kill off things that not only have made it successful (and able to kill off brick and mortar places), but that differentiates it from other places!