TechBytes: Five Cool Ways Zappos Ensures Disruption and Innovation

I recently had the opportunity to visit the funky Las Vegas headquarters of online footwear/apparel/accessories retailer Zappos.com. Zappos is generally regarded as one of the most customer-friendly retailers around, and after seeing how things work behind the scenes I can attest this reputation is well deserved. Here are five cool ways Zappos uses corporate culture and innovation to disrupt the customer experience and behind-the-scenes operations.



1. Hire for Culture. The Zappos employees I saw were energetic, fun-loving, maybe a little eccentric (they are Las Vegas residents) but clearly devoted and hard-working. Even before ensuring a potential hire has the right skills, first Zappos ensures they are good cultural fit for the organization. Traditional corporate “suits” are out (dress code is 100% casual and business attire is discouraged), and unconventional, creative, fun-loving types are in. Staffing with the right type of people ensures Zappos can successfully pull off feats like #2 on this list.



2. Serve The Customer. Most firms claim to be oriented around customer service, but Zappos means business. Call center employees are encouraged to stay on the phone or live chat with customers as long as the customer wants to talk, and to discuss any topic the customer chooses to bring up. Calls as long as three hours are not unheard of, yet average customer wait time is only 20 seconds. Zappos achieves this combination of efficiency and personalization by heavily staffing its round-the-clock customer service shifts and also extensively training customer service associates to handle almost any inquiry without having to consult a manager. In addition, every new hire across the company spends two weeks on the phones and all employees spend 10 hours a year in the call center to guarantee the whole organization is focused on and understands customer service.



3. Serendipitous Collisions. Zappos has laid out its entire headquarters complex, situated in the former Las Vegas City Hall, to promote what it calls “serendipitous collisions” of people in different departments who ordinarily would not interact. This includes an open layout where even CEO and co-founder Tony Hsieh does not have an office (or “room with a door” in Zappos-speak), common break areas intentionally located between departments, and a variety of lounge, workout, café, play and nap (!) areas shared by the whole company.



4. Location, Location, Location. Zappos was originally founded in San Francisco and still has offices there. However, the company discovered that the San Francisco workforce was not optimally geared to its 24/7 staffing needs and that shipments to the East Coast took an unacceptably long time. So Zappos decided that Las Vegas would better fit its needs both for a 24-hour workforce and unconventional corporate philosophy, and moved headquarters there. In addition, by moving its distribution facility to the Louisville, Kentucky area, where its primary delivery provider UPS has central distribution headquarters, Zappos ensured customers in any part of the country could get their orders shipped in four to five business days.



5. Make It Easy. Zappos generally designs its customer experience to be as hassle-free as possible. In addition to generous call center and delivery time offerings, Zappos also offers free shipping on all orders and a 365-day free return policy. Basically, every aspect of purchasing an item from Zappos.com is designed to be as easy and pain-free for the customer as possible, up to undoing the purchase if needed.



All this lets Zappos fulfill its stated mission to “wow” the customer with service or experience, rather than promotions or financial incentives, leading to repeat business and positive word-of-mouth. What that means is Zappos can recoup at least some of its extra spending in customer service with reduced reliance on formal marketing and acquisition/retention programs or discount pricing. Maybe the “suits” could learn a thing or two from their less conventional peers in the Nevada desert.