Zappos is an online shop that was established in 1999 in Las Vegas, United States. It was during this time when there was an internet flourishing. Zippos majored in selling shoes online, whereby it provided an exclusive selection of shoes to its customers with different styles, brands, colours, and sizes. Zappos considered all its aspects in building up of its business from culture, inventory, recruiting, call centre, supply chain to its website, to deliver quality services to its customers. The company also aimed at wowing every individual who experienced the service and products of the company, from business partners, employees to customers. Despite some issues that the company faced during its emergence, Zappos expanded its services and products to things like video games and camping gears. The company’s strategies contributed much to its success and had to determine if it could duplicate the achievements to other lines of products.
Zappos Supply Chain
The supply chain has different strategies that decide when the product should be made-up, delivered and when to distribute it to the retail channels. Long term estimates of consumer demand mainly control push strategies. A company can predict its supply chains since they already know what to expect and when, before time (Lander, 2019). This helps the company in planning production, preparation time and also storage places to meet customer demand. In comparison, pull strategies are mainly driven by actual customer demands (Lander, 2019). In this strategy, products come into the supply chain as the demand is right. The two methods work well in the supply chain.
Delegate your assignment to our experts and they will do the rest.
In satisfying customer needs, Zappos uses both strategies, and they are both responsive and effective. Considering seasons, responsive nature differs, but the company always gets a positive response in terms of customer satisfaction and returns (Kopelman & Zhu, 2012). The company ensures excellent customer care when an order is placed, thus putting in place the pull strategy supported by fast delivery means to the customer. This way, customer satisfaction is met. Zappos also put into action the push method by introducing unique and quality clothes and shoes, thus attracting more customers hence more orders (Kopelman & Zhu, 2012). This move makes the company remain appropriate to customers and therefore making incredible profits.
Advantages That Zappos Offers Customers
Zappos invested a lot on customer satisfaction which in turn has contributed to its success. Some of the advantage that a client get include free shipping when a customer buys or returns the product (Pablo, 2015). This enables quality customer experiences. The company's supply chain management makes it possible for the company to deliver outstanding services, especially in fast delivering. Zappos shifted its operation to its warehouse to prevent late deliveries and direct deliveries from the manufacturers to clients (Pablo, 2015). By doing this, Zappos workers can supply their customers faster. Nevertheless, delivery is 24 hours hence makes it more reliable.
Zappos call centre services enhance good customer relationship with the company. The call centre focuses on listening and taking customers remarks, and it brings about a positive impact on the company (Kopelman & Zhu, 2012). It also maintains customer loyalty, therefore decreasing the cost of customer purchase. This is essential to both the company as it enables working directly with the customers.
Zappos’s other competitive advantage is that it provides an exclusive company culture with its workers. This helps build relationship among the workers, improvise teamwork, and also making fun (Hoyt et al., 2011). Consequently, employees deliver good service to the clients and hence making profits. Effectiveness in the company’s supply chain is also encouraged by the company culture values such as “be humble” or “do more with less” which enhances trusts by clients and manufacturers (Hoyt et al., 2011).
Threats to the Sustainability of the Zappos Approach
Despite a lot of success that the company has experienced, several threats face the company. Zappos elimination of shipping costs and establishing call centres benefited the company in terms of getting more clients. But the sustainability of the Zappos approach is threatened by competitor such as Virgin and Amazon (Hoyt et al., 2011). Though it is not easy to imitate the Zappos approach due to its excellent customer services, competitors with capacity and ability to do it can be a threat to its success. For instance, a company like Amazon, which also provides similar products, and almost identical supply chains as Zappos, present a danger to Zappos.
Competition is one of the threats facing Zappos. Despite Zappos excellent customer services, companies such as Virgin and Amazon (which merge with Zappos) pose a threat to the company (Kopelman & Zhu, 2012). The competitors of Zappos both have similar products and almost identical supply chains. This shows their capacity of out doing Zappos. It is challenging due to its unique techniques in customer satisfaction. Even after Zappos decided to merge with Amazon, most clients did not welcome the idea positively. Most clients withdrew their trust from the company (Kopelman & Zhu, 2012). This affected the company’s reputation and had a challenging time convincing its customers to maintain their trust in the company (Kopelman & Zhu, 2012).
Zappos faced several problems, and as a company, issues need to be fixed to avoid losses and compromising the operations of the company. Dealing with internal problems, Zappos initiated an approach that would help in solving the issues. Holacracy technique help solve the problems whereby when a problem emerges, a team is selected to overlook the problem. If the problem arises again, a different group is chosen to solve the problem (Pablo, 2015). This helps in generating a lot of solutions concerning the market.
How Zappos Can Grow
Adding more products to the company would improve the company’s growth and improve its services even further (Pablo, 2015). There is a program established by Zappos known as "powered by Zappos" which shows that the company has an advantage of introducing other products apart from shoes only (Pablo, 2015). Also, due to the company's competences in supply chain management and distribution, can cope with the introduction of the new products. Therefore, the company can form other new different online platforms for the new items and also improve distributions. This will also help the company gain more profit (Pablo, 2015).
Another way that Zappos can improve its growth is by creating and selling private labels (Pablo, 2015). Although to do this, Zappos has to make a plan in finding a corporate partner who will be producing private label products. Thus need for expanding its supply chain management. Besides that, Zappos has to market the new product. Consequently, costs will appreciate hence affecting the profitability of the company, but this will only be experienced in the beginning since the customers are not yet familiar with the availability of the product at Zappos. In reference to Amazon, Zappos can also be successful in the introduction of creating and selling of private label (Pablo, 2015).
Conclusively, Zappos’s operating and business techniques make even, and this has contributed to Zappos’s success. From its supply chains to customer services, which are evident through its annual revenues. Even though Zippos merge with Amazon, it still operates independently and stands successful. Its success does not only come from the sales the company make, but also from how it treats both its employees and customer.
References
Hoyt, D., Lee, H., & Marks, M. (2011). Zappos.com: Developing a Supply Chain to Deliver WOW! Marketing, management . Pp. 2-22.
Kopelman, R. & Zhu, Z. (2012). Interpreting the success of Zaappos.com, Four Seasons, and Nordstrom: Customer centricity is but one-third of the job. Journal of Global Business and Organizational Excellence . Pp 63-76. DOI: 10.1002/joe.21457
Lander, S. (2019). Push vs Pull Supply Chain Strategy. Product Strategies. Retrieved from: https://www.smallbusiness.chron.com
Pablo, J. V. (2015). Zappos and the Connection Between Structure and Strategy. Disruptive Innovation . Retrieved from: https://www.hbr.org
