Case Study: Fast, Simple Open-Source IT - ' The Need for Speed ' (
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The Need for Speed
There's a thing most of us have about buying shoes: Once we buy them, we want to wear them. That works just fine in the bricks-and-mortar world, where we can walk out of a store wearing the shoes we just bought, but that's clearly an impossibility online. While Zappos knows it can never give you the shoes the instant you buy them, the company is dedicated to shrinking that delay of gratification to as short a time as possible.
To that end, the company keeps its 905,000 square-foot, Cedar Grove, Ky.-based warehouse open 24 hours, seven days a week. That way, a customer can order shoes as late as 11:00 p.m. and still have the option of next-day delivery. "It's not the most efficient way to run a warehouse," says Hsieh. "But it does allow us to get shoes to customers as quickly as possible." Short of expedited shipping, Zappos promises customers their shoes will arrive in four to five business days, free of charge. For repeat customers, the company's order-management system randomly selects customers for upgrades to second-day shipping, or sometimes even next-day air shipping. "The customer isn't expecting that, and it's a way of improving their experience," says Hsieh. "That results in even more repeat customers and better word of mouth."
While the company strives to get merchandise orders on the very next truck that leaves the warehouse, Zappos also knows that, for peace of mind, online customers need the ability to track the status of their orders. "Integrating with different sources that you don't have control over is one of the hardest parts of the IT job," says Field. "But we work with our shippers, like UPS, to monitor and improve communications between our system and their systems. We're vigilant in that regard."
As with much of its software, the company's warehouse-management system was custom-built by its development team, aided by a number of off-the-shelf hardware and software solutions from companies such as Symbol Technologies Inc. The interface to the WMS is through a browser—a luxury made possible by the fact that Zappos is staffed by people who started their careers using Internet technology. The simplicity allows an average turnaround time of eight hours from when a customer places an order to when it goes out the door.
To make sure customers are never left waiting, Zappos also stocks every shoe that's available on the Web site. Indeed, a pair of shoes won't show up for sale until warehouse workers scan a barcode on a shoebox and a sticker on a warehouse shelf to log the shoes' location, thus guaranteeing that every shoe shown online is in stock. "The only time we run into trouble is if there's only one pair of a certain shoe left, and two people have it in their online shopping cart at the same time," says Field. "Without realizing it, they're racing with someone else to buy the same pair of shoes. But in general, if you've put it in your shopping cart, we already know which box on which shelf is going to you."
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