Circuit City Goes Bust: Zappos Flies High -- Why?

Walking past the Circuit City - the flashbacks are plentiful and painful. We've all had them. The hours on the "customer service" line trying to return a broken cable or DVD player. The hard sell 'extended warranty', the demands for your phone number at checkout. But mostly, the sense that the folks that worked there didn't like the place, and didn't like the customers. No great surprise that folks have flocked to Best Buy, or online sellers - leaving the icky Circuit City customer experience in the dust.

So - what IS the future of ecommerce and retail? Well, for a few hours last week, I think I saw the future - and shockingly... it starts with the rather unglamorous on-line product of shoes.

Yes, shoes.

In search of the sole of online retail (yes, sorry - one pun per post) I ended up in the Las Vegas desert at a place called Zappos.

Zappos is everything that Circuit City was not.

The thing about Zappos is that it just doesn't make any sense - until it does. Then, its like a light goes on, and the whole connection between community and commerce will never be the same.

Does that seem extreme? Ok, well - come along with me on the tour of Zappo's Corp HQ and see if it make sense after then.


The Zappos Corp. HQ is in Las Vegas - and as our tour guide explained to me (yes - they have tour guides). Why Vegas? That was because they wanted to have all of their customer phone reps able to live in a 24 hour city with a good high energy fun culture. Simply put, when you call Zappos - you're not getting sent overseas or to an outsourced call center. Zappos knows that for ecommerce, your phone call is their best chance to have a positive customer service experience. The only other company that I know that gets this is Apple. Phone support IS the customer experience.

Before I went to Zappos, I'd seen some photos of popcorn machines in the lobby and foosball tables and such. But I just figured it was the old web 1.0 thing - no one really plays with the stuff, it's just there to create the impression of a cool place to hang out.


Once you walk into the lobby - it starts to make sense.

The original powerpoint that funded the company is on display: In it, the quote: "Footwear Trends: it is likely that men and women and children will wear shoes for the foreseeable future."

Ok, that's funny. A shoe store with a sense of irony. Love that.

But the big surprise is as you 'tour' the building.

There's no fancy machines. No nifty robots or high tech gizmos. It would be a your ordinary office park. But Zappo's turns that upside down. Every department has a 'shtick'. Decorations are creative, funny, raw, silly - but incredibly authentic. Remember the "Flair" at TGIF. Well, none of that here. Whether it's the Pirates Den, or the Executive Jungle, or the Zappos Wizard of Oz Conference Room, it's clear that these guys are having a good time selling shoes (and more than shoes too!) .

So, how did Tony and his team build this corp culture? Well, if you follow him on Twitter you'll see that he's got a sense of humor and likes to share it. And so, by making the people of Zappos stars and important, he's made a gig at Zappos hard to get, and worth going for. Remember this is Vegas, so the town is full of outgoing people with a sense of performance. But not everyone gets to work at Zappos, In fact - after you go through their recruiting and training program, Zappos offers new hires $2,000 to quit. Yup - paid to leave. The point is: "if this place and this job isn't awesome for you, take the money and run."


My tour continued - past the woman on the phone dressed as Elvis, past the free bookshelves (employees and visitors are both encouraged to take as many as they want - and suggest one to add to the Zappos book collection) and finally - to the Zappos VIP area. Ok, pick a crown and smile for the Polaroid. Ok, I admit it - it made me feel special. :)


So - as you walk through the funhouse that is Zappos, you find that you want to snap pictures. And rather than the Zappos folks glare at you -or feel like they're on display - they clap, blow horns, even take pictures of YOU (it's all part of the vibe). But the bottom line is - they're having fun, and as the tour moves from the Kids department to Legal, to Marketing to Content (formerly known as Product) you get that these guys are on a mission. A mission to make Zappos into a community that you want to be part of , a new kind of community-based commerce.

Tony Hsieh has created a culture that is quickly becoming the envy of retailers both online and off.

He's doing it by embracing the technology and the ethos of the web 2.0 world. While most big companies are monolithic, Zappos with it's 1 billion dollars of sales last year, is surprisingly human and humble. While big companies create a wall between them and their customers, Zappos tears that wall down with video, telephone, and twitter - embracing connectivity and transparency.

At a time when lots of things that are big seem to be failing (Chicago Tribune, Circuit City, Citibank) you can peek into what a more personal, more fun, more human commerce business looks like by checking out Zappos. Step one, buy some shoes. Then it will start to make sense.