Friday, July 31, 2009

Amazon and Zappos: a good fit?

Shortly after Amazon.com announced last week that it was acquiring online shoe retailer Zappos, an Amazon employee posted a message on Twitter that captured some of the company’s hopes for the deal.

“Dear Tony: Please teach Amazon about Twitter,” read the message, addressing Zappos CEO Tony Hsieh. “And if you could help us get an 800 number on the home page that would be awesome.”

The tweet went to the heart of Amazon’s $900 million-plus gamble on Zappos — the largest acquisition in its history. Seattle-based Amazon.com Inc. is getting not only a category leader in online shoe sales, but an innovative company known for its quirky culture, well-developed customer service, and heavy use of social-networking sites like Twitter and Facebook for marketing and brand development.

Amazon plans to let Zappos continue to operate independently, but it’s also poised to draw some lessons from the Zappos model as it develops its e-commerce strategy going forward.

“They didn’t buy Zappos just because they sell shoes but because of how they do it,” said Patricia Edwards, a retail analyst with Storehouse Partners, a Bellevue-based investment management firm. “You can generate incredible customer loyalty through a good experience.”

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