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Zappos
Zappos.com is the world's largest online shoe and clothing retailer, generating $1 billion in annual sales. Its core competencies are delivering outstanding customer service and a delightful customer experience through its highly trained call center agents, next-day delivery, generous return policy, and strong corporate culture. However, in a more cost-conscious environment, Zappos will need to reduce expenses like surprise delivery upgrades while maintaining its focus on customer service to continue its sales growth.
Zappos
- 1. LOGO ZAPPOS.COM “Developing a SupplyChain to Deliver WOW!” http://www.zappos.com/
- 2. Contents What is Zappos.com? Core competency& Corporate culture Next day air shipment & customer experience Business expansion Changing environment and Zappos.com
- 3. What is ZAPPOS.COM? 1. World’s largest 4. Passionately online retailer of engaged employee shoes Business Employee Revenue 5. Huge collection of shoes and other products 2. Annual gross sales of $1 billion Product 3. Outstanding reputation for customer service Customer
- 4. Sales figure ofthe zappos.com “Customer services as an investment rather than an expense”
- 5. Core competency& Corporate culture What are Zappos’ core competencies and sources of competitive advantage? How sustainable are they? What role does corporate culture play in these questions?
- 6. Core Competencies “Every interactionis a brand opportunity” Delightful customer services Faster web interface and extensive online product information Trained call center operators and toll-free call no Excellent supply chain system Return policy – free and 365 days allowance
- 7. Core competencies &Corporate culture become a Core competencies are Competencies developed based on the Culture corporate culture. Culture give the competencies
- 8. Competitive advantages Key Variables Typical Brand Zapoos.com Service as Marketing Low High Traditional Media Spend High Low Toll Free Number Hidden Written on forehead Invitation to interact Hard to find Everywhere Openness to talk Clock is ticking; get lost Stick around; let's chat Toll Free Number hours 9:00 am to 5pm 24hrs Outsourcing Common Unthinkable
- 9. Corporate Culture Deliver WOW Through Services Embrace and Drive Change Create Fun and a Little Weirdness Be Adventurous, Creative, and Open Minded Pursue Growth and Learning Build Open and Honest Relationships with Communication Build a Positive Team and Family Spirit Do More with Less Be Passionate and Determined Be Humble
- 10. Next day airshipment & customer experience How important is next-day air shipment to the customer experience? Is it worth the case? How might you change it in the cost conscious environment facing the company in late 2008?
- 11. Next day airshipment & customer experience •Surprise upgrade delightful •Rapid spread of Positive WOM •Next day delivery promise -disappointment •No WOW! Anymore •Decline customer satisfaction •In late 2008, reduce surprise upgrade and deliver orders by ground shipment
- 12. Business Expansion How wouldyou expand the business? Would you add more products, more geographies, or by selling private labels? As you expand the business, how can the company become more profitable, particularly in light of the costs associated with the focus on service?
- 13. Business Expansion No significant expansion should be done at the time of recession US & Canada – Are there still any opportunities? Are we ready for Europe’s market? “wow not just our customers and our employees, but also our partners”
- 14. How to generatemore profit? Vertical expansion Enhance services level Create more (+) WOM Acquired new customers Retention of existing customer “a service company that sells shoes”
- 15. Changing environment and Zappos.com How would you expect the environment of a more cost-conscious consumer to affect Zappos’ business? What can Zappos do in such an environment to maintain sales growth?
- 16. Changing environment and Zappos.com Increasing sales, but decreasing margin – cut costs Stick to the core competency of service delivery Don’t reduce price. Selective discounts can be explored Keep a check on consumer behavior and competitive websites Improve supply chain Out bound freight improvisation
- 17. LOGO “A service companythat sells shoes” http://www.zappos.com/