Zappos in the News: A Reputation Nightmare

Zappos, the world’s largest online shoe store, has taken a beating in the press this week after it became apparent that private information of its 24 million customers became compromised. CEO Tony Hsieh issued the following statement via email:

“We’ve spent over 12 years building our reputation, brand, and trust with our customers. It’s painful to see us take so many steps back due to a single incident.”

I’m sure it’s also painful for Hsieh to scan the headlines about his company that have surfaced in the last few days. The following are just a few:

  • Even Big Companies Cannot Protect Their Data — a blog piece from the New York Times, which states that more often than not, companies are resorting to telling their customers that it is up to them to protect their data stored on the company’s servers. The piece notes that even though the company claimed to have a security breach response plan in place, Hsieh provided no explanation about why the data was vulnerable.
  • Zappos Data Breach Response: Good Idea or Panic Mode?PC World ran an online article Tuesday that highlighted both sides of opinion spectrum. While some analysts praised Zappos for their response to the incident, others, including John D’Arcy, professor of information technology at the University of Notre Dame, called the overall response plan “not a good idea.”
  •  Zappos, Amazon Sued Over Customer Data Breach — It was inevitable. Days after the breach, it was announced that Zappos, and parent company Amazon, are being sued by a Texas woman alleging that “she and millions of other customers were harmed by the release of personal account information.” Attorneys for the plaintiff are seeking class-action status. Stay tuned.

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