Zappos Chief Executive is Looking For a Way Forward

Succeeding was never easy Tony HsiehIs celebrated as the Chief Executive Officer of Zappos, Who transformed a small online seller of $ 1 billion through an obsessive focus on corporate culture and happy employees. But Kedar Deshpande took office at a particularly frightening time.

Zappos, which is owned by Amazon, was already navigating remote work and with a change in the way people shop, Mr. Hesih suddenly retired in August after two decades, which led to Mr. Deshpande Was named CEO, then in November, tragedy struck: Mr. Heishi, 46, Died from A house fire in New London, Conn., Caused injuries, sending shock waves to the company of about 1,500 people, as well as tech and entrepreneurship.

Since then it has been Reported Mr. Hesheh had been misbehaving for months and friends considered interfering last summer. The revelation brought new investigations into the circumstances of her exit from Zappos.

Mr. Deshpande, formerly chief operating officer of Zapos, said that when Mr. Heshey told him last summer that he wanted to pursue other projects, he did not back down.

“From my experience working with Tony, Tony always believed in the things he wanted to change,” Mr. Deshpande said in an interview, his first as chief executive. “I asked him, ‘Hey, Tony, are you sure?” And they said, ‘Yes, I want to retire’ – so that was the end of the conversation. “

Now, Mr. Deshpande, 42, has been tasked to graze Zappos through the final stages of the epidemic and into the company’s next phase as an online retailer without Mr. Hsieh’s guidance. He also needs to show if the company’s culture is “fun and a little weird” Las Vegas Can survive without its chief architect.

From his home in Henderson, Nev., Mr. Deshpande said in a Zoom interview, “Kovid’s position and everything else going on, especially with a culture based on physical proximity and the joy associated with it, is very difficult.” He said he was optimistic about the future, especially the decade he spent in various roles in Japos.

“Culture is not just one person or two people,” he said.

When Mr. Hische stepped down, there was clearly no long-term succession plan. Zappos’ board, which includes employees of Amazon and Zappos, elevated Mr. Deshpande to the role. The company, founded in 1999, has long operated as an independent entity within Amazon, which it acquired in July 2009 for $ 1.2 billion and did not disclose its financials.

Professor Eric Gordon of Michigan Ross School of Business said that it is difficult for a person to replace a CEO with an outside personality, Eric Gordon, who speculated that the culture of Japos would face some changes in new leadership.

“The person who takes over from the founder who created the culture does not have the authenticity or moral authority that the founder had,” Mr. Gordon said. “Can he keep up the fun and a bit of awkwardness and positive team spirit?”

(Mr. Hesheh did not find the company, but has been referred to as the founder based on his involvement as an investor and has been a chief executive since his early days.)

Mr. Deshpande, who is from Aurangabad, India, came to the United States for a master’s degree in computer engineering and joined Japos after stamps at General Electric and PepsiCo. He joins a growing list of South Asian CEOs in the United States, at companies such as Microsoft; Google’s parent company, Alphabet; And the gap.

Zappos, which derives its name from the Spanish word for “zapatos,” shoes, was an early e-commerce success story under Mr. Hsieh, who wrote the best-selling book in 2010, “Delivering Happiness: A Path” Two Profits, Passion, and Purpose. ”It was argued that the top priority of a company should be its culture and that employees be happy in success with customers.

The company, which moved from the Bay Area to Southern Nevada in 2004 and now has a campus in downtown Las Vegas, has developed a reputation for being fun, an almost equal place to work, where employees regularly work. Socialize on and off the office. company has claimed That it is harder to get a job at Japos than to land at Harvard.

Mr Deshpande said Zappos employees had become somewhat closer over the past year as they brought family or pets to remote-work folds.

“When we have a Halloween competition, it’s part of the whole family,” said Mr. Deshpande, who has two young daughters. He described the package japos sent to employees and their families for activities such as planting herb gardens or doing science experiments.

He speculated that employees would start returning to the office after 1 July and was likely to develop a hybrid schedule with some remote and some in-person work.

While Zappos did not have to contend with drop-offs at physical stores, which many other retailers did, it quickly impacted the epidemic as shoes and clothing became a controversy; Last March, some people were buying high heels. Sales have since declined, based on so-called performance and demand across home categories.

Mr. Deshpande said he was unsure when the demand for high-heeled shoes would return, but it was anticipated that people would seek comfort in order to reopen the economy.

Zappos has introduced and expanded ways to smooth out the tubers of online shopping during the epidemic, such as allowing some customers to make returns through UPS Home Pickup, and making it easier to exchange items. It was also seen that the average length of calls with customer service representatives had increased as people had more time in the closed world. They also left more detailed reviews on the products.

One of the biggest goals of the company, and a top priority for Mr. Deshpande in the coming years, is to find out how to make online shopping less transactional and create more browsing experiences as people search in malls and department stores Huh. This includes developing new digital magnaginylic “verticals” – which media companies make – such as “People,” Which is adapted for female sneakerheads and is advertised as “powered by Japos”.

Japos is also behind VrsnlA luxury site that has its own web address and no visible links to the shoe site. It has merchandise from designers such as Dolce & Gabbana and Prozona Scholler. The company is putting new efforts into product detail pages and informative videos that are delivered to viewers like the new runner-up, and even co-developing merchandise and campaigns with those brands.

Deshpande said, “What fails to deliver online is different from what physical experience is today.” “By the time you actually go and deliver these experiences, people will, in my opinion, go back to physical form, and they will only be online for transactional experiences.”

The company refers to these efforts as “experience commerce” and said the category was driving 25 percent of its investment. Outside of motivating consumers to explore more, Zapos is trying to make online shopping more harmonious with the aim of getting consumers to spend more money over time.

Mr. Deshpande said, “One of the challenges is that when someone walks ‘online’, someone is looking for a jacket. For example, we show them the inventory to each other next to each other – Like $ 30 jacket, $ 50, $ 100, $ 300. ” . “It is a very frightening experience.”

In his view, all efforts are consistent with Zappos’ obsessive focus on service for the past 20 years, which he hopes to focus his attention on for the next 20 years.

While the company is still grieving Mr. Heshe, Mr. Deshpande said, employees will continue to hold the values ​​that were their champions. He pointed to an example during the holidays when an employee mentioned children missing from meeting Santa Claus during an epidemic, leading to a multilateral effort to organize Santa Zoom meetings for children across the country.

Deshpande said, “To me, Tony’s legacy is to bring this joy to everyone.” “This culture they have created or pioneered, it is going to survive.”

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