Business - Written Wednesday, July 29, 2009 by Laura M. Carrillo - 3 Comments

Zappos and Amazon Sitting in a Tree…

Last week Amazon announced the acquisition of online apparel and footwear retailer Zappos.  The Wall Street Journal reported on Monday that Amazon shelled out an impressive $847 Million for Zappos, a company most well known for its impeccable customer service and outstanding employee satisfaction. The company even pays new employees to leave if after completing new hire training they are not 100% on-board with the position and culture of the company. If you are not familiar with this unorthodox approach this ABC clip provides a good overview of the culture that Zappos has developed. So the outstanding question about this acquisition is – Who will be leading the customer experience strategy? Will Zappos teach Amazon a few things about customer and employee experience or will Zappos adopt more of the Amazon style?

Fortunately, both companies are run by astute and innovative CEOs who are very customer-focused and known for stepping up and openly communicating with the pubic and their employees. For example, as soon as the acquisition news broke, the CEO of Zappos, Tony Hsieh, sent an email out to employees addressing the transaction and primary questions that he assumed they would have. He also assured them that the relationship will help both companies grow and that they would be keeping their culture and teams intact. Not only was the letter sent out via email, but in true 2.0 fashion a blog post was immediately created looking for questions, comments and feedback from employees, customers, basically anyone. To date the majority of comments have been positive in nature with a few customers looking for assurance that the “Zappos way” will not go away. As one Zappos and Amazon customer said: “Amazon is good, but Zappo’s is GREAT!” I believe that this is the general consensus and that Zappos customers will be extremely disappointed should service quality slip at all moving forward.

On the public front, Amazon’s CEO, Jeff Bezos dealt with a fairly public blunder last week when some copies of George Orwell’s book 1984 and a few other novels were remotely deleted from individual’s Kindles after it was realized that they were illegally sold. Ironically, a very Big Brother thing to do with a book about Big Brother. Recognizing the backlash that the move had caused with customers, Bezos immediately issued an apology on the Amazon Kindle community. Bezos said “Our “solution” to the problem was stupid, thoughtless, and painfully out of line with our principles.” To date there are over 570 responses to the apology with many customers posting that they understood that Amazon was put in a tough spot and stated how appreciative they were for Bezos personally stepping up to communicate with them. Zappos, which has masterfully conquered social media tools like Twitter could be a great partner in moving Amazon further along in their use of social media to deal with issues like this. Hsieh himself has over 1 million Twitter followers and tweets consistently about everything from company news to his personal thoughts and favorite quotes.

Even though all public communications state that Zappos will remain operating independently, you have to believe that there will be at least some disruption. Hopefully for Zappos employees and customers that will be minimal and both company leaders will continue the transparent dialogue with all stakeholders. Given both companies’ alignment with social media it won’t take long for any customer and employee issues to surface publicly, so managing the challenges that are inevitable in any merger or acquisition is crucial. Many questions will only be answered over time. What do you think? Did Zappos make the right move? Will Zappos be able to maintain its service levels and culture now that it is part of a larger entity? Will Amazon customers expect Amazon to adjust its service to meet the level that Zappos has set with its own customers?