Zappos.com was the leading online seller of shoes in the U.S. It has been a real success story for
the corporation since it has started to sell shoes online. But the journey of selling shoes online
was not a smooth one for the company. When the founder of the organization proposed about
selling products online, the concept received stiff criticisms from various groups of the
organization. But afterwards it opens new door for the company and as of 2008 its anticipated
sells amount is as much as $1 billion. That vast amount of profit is really remarkable for the
company considering the fact that it only has initiated the operation only 10 years back.
However, recently the corporation faces few obstacles in the business operation mainly due to
the ongoing worldwide financial crisis which mostly hits almost every business organizations in
the US. This article is all about evaluating the value chain strategies and activities of the
organization as a .com company and also come-up with solutions and suggestions regarding
what the organization should do to improve its operation. Those suggestions and solutions will
be provided by giving examples of the global leading and pioneer .com companies (Hoyt and
Marks, 2011).
The historical success story and current situation of Zappos.com reveals a quite interesting story
to look at. Evaluating the value chain of the organization is really an unprecedented experience
and a breathtaking act.
International Journal of Managing Value and Supply Chains (IJMVSC) Vol. 3, No. 3, September 2012
41
The concept of selling shoes online was really a wonderful thought considering the fact that it is
always difficult for the customers to get the shoes of right size colour and shape by visiting
stores to stores. Zappos.com understood the fact that it can make the job of the customers far
easier by putting all the information of the product on internet and customers can get their
desired product very quickly only by visiting the websites within a short span of time. Their idea
of selling shoes online also boosted by the boom of internet during 1999. Selling shoes online
enables them to create a successful value chain which is also very much suited with the demand
of modern times (Hoyt and Marks, 2011).
When Zappos.com started the operation in 1999, the total shoe market in the U.S was about $40
billion and only 5% of that done through mail order. The company found their opportunity on
that fact. They believed that they can satisfy the needs of the their customers in better ways if
they incorporate online selling by providing catalogs in the web sites and customers can easily
choose their priority and can give order. That system was really worth of taking considering the
fact that, in modern times that particular value chain is the more efficient which can fulfil the
customers’ needs in better ways. In that sense the concept of Zappos.com to sell shoes online
was really a praiseworthy and suitable one (Hoyt and Marks, 2011).
Looking at the value chain strategy of Zappos.com portrays the fact that they always looking for
building a strong loyal customer base. They believe that only loyal customers can ensure long
term sustainable relationship with the company and ultimately can make the company a real
profitable one. Alongside building a loyal customer base another major strategy of the company
was not to look for immediate profit rather tries to build the corporation and look for sustainable
growth. These strategies are the major reasons behind the historical and unprecedented success
of the Zappos.com Corporation (Hoyt and Marks, 2011).
Zapposs.com also believed in maintains strong organizational culture for ensuring the best
possible value chain for the customers. It always maintains the workplace suitable for working.
It also ensured that the working environment will be enjoyable where everyone will just have
fun to work there. Ensuring fun at the workplace was a major reason for their high success in the
business process. Zappos.com always trusted its employees. The organization believes that if
they can satisfy the employees ultimately that will contribute towards making the value chain
efficient and penultimately customers will be satisfied and their goal of building loyal customer
base will be obtained (Hoyt and Marks, 2011).
Zappos.com established value chain to ensure WOW for the customers. It always strive towards
achieving WOW in its every sphere of operation It wanted to give its customers the most
wonderful experience while shopping so that the customers can remember the event and that will
trigger their future purchase. The company believes that providing customers the best possible
services should never be considered as an expense rather it is an investment that can pay back in
great way. Best customers service will ensure high performance, high performance will ensure
high percentage of customer satisfaction and high percentage of customer satisfaction will
ensure loyal customers (Hoyt and Marks, 2011).
In order to achieve WOW in their value chain and customer service the company ensure the
fastest website in their armoury. That particular website was faster than any other rival retail
firms. Alongside the internet facility for taking orders from the customers the company also
utilize telephones services up to the greatest extent. They ensure toll free numbers. That numbers
assist the customers profoundly to give their orders without any expenses. Through telephone
and internet the company use to provide every possible information to the customer at the
quickest possible of time. Those information include products, price, location, delivery times
and also many other important aspects. Those activities really helps the organizations to build
the most efficient and smooth value chain for serving the customers (Hoyt and Marks, 2011).
International Journal of Managing Value and Supply Chains (IJMVSC) Vol. 3, No. 3, September 2012
42
Another significant and important policy in the value chain of Zappos.com was the fit and return
policy. That particular policy was a real good one considering the fact that it is unlikely that
shoes will fit to each and every customers at the first purchase occasion. In order to make
customers feel free from risks and purchasing consequences the company first implemented 60
days and then 365 days fit and return policy. That ensures remarkable value into the value chain
of the company. That makes customers really free from thinking a lot. They were purchasing
many kinds of shoes online as they can return those anytime if they virtually want to do so. Fit
and return policy was definitely a wonderful addition into the value chain of Zapposs.com (Hoyt
and Marks, 2011).
It is the most common characteristics of customers that they always want to avail as many
information as possible prior to purchase a certain product. It is always the responsibility for the
providers to ensure that. The case is of more significance for online or .com companies like
Zappos.com. The company was also not behind understanding that particular fact. They always
uploaded the pictures of the shoes and also from different angles to give clear idea to the
customers regarding product design and variety (Hoyt and Marks, 2011).
Apart from that the company also put detail information and expert’s opinion besides the
pictures of the shoes and also customers can make their comments regarding the design and
price of those shoes. It was really a wonderful idea to have those facilities on the internet as
those acts and information provided the customers all kinds of required data prior to make their
purchase decision (Hoyt and Marks, 2011).
Zappos.com use to deal with 95% of orders through online. In Addition the rest of the orders use
to take place via a call centre. The call centre was there to provide the customers the best
possible experience. They consider the interaction with the customers through the call centre as a
branding opportunity and they never fall back in fulfilling the demand of each and every
customer through the call centre. Call centre operators also provided with training opportunities
so that they can efficiently deal with the customers in various cases like order receiving, order
delivery, return products dealing, providing information of all sorts etc (Hoyt and Marks, 2011).
Along with above mentions strategies and activities another major addition in the value chain of
Zappos.com was to provide the customers the most rapid delivery and also with no additional
charge. Zappos.com always wanted to surprise the customers by beating their expectations. In
order to do so they have special contract with renowned company UPS. They use to deliver
products even at a faster rate than UPS tends to do in normal cases. If customers place and order
in the evening they will receive it in the next day. That is even more exceptional considering the
fact that the normal delivery tenure of UPS is four to five days. The company believes that
surprising customers in a positive way is certainly a big advantage for the company over the
competitors and without any doubt it will give them a huge edge over others. Rapid delivery is
definitely a wonderful addition into the value chain of the company and that assists them greatly
in building strong positive reputation of Zapposs.com (Hoyt and Marks, 2011).
As an online retailer of shoes it was immensely important for Zappos.com to attract different
kinds of brands. Simultaneously it was also important to attract the most popular ones which are
frequently purchased by the customers. In order to obtain efficiency in brand attraction and
selling as well the company started with 60-70 brands and then they customize it according to
the demand and purchase pattern of the customers. It helps the organization immensely to obtain
operation efficiency as it ensured cost effectiveness and high levels of customer satisfaction at
the same time. Initial
Zappos.com was the leading online seller of shoes in the U.S. It has been a real success story forthe corporation since it has started to sell shoes online. But the journey of selling shoes onlinewas not a smooth one for the company. When the founder of the organization proposed aboutselling products online, the concept received stiff criticisms from various groups of theorganization. But afterwards it opens new door for the company and as of 2008 its anticipatedsells amount is as much as $1 billion. That vast amount of profit is really remarkable for thecompany considering the fact that it only has initiated the operation only 10 years back.However, recently the corporation faces few obstacles in the business operation mainly due tothe ongoing worldwide financial crisis which mostly hits almost every business organizations inthe US. This article is all about evaluating the value chain strategies and activities of theorganization as a .com company and also come-up with solutions and suggestions regardingwhat the organization should do to improve its operation. Those suggestions and solutions willbe provided by giving examples of the global leading and pioneer .com companies (Hoyt andMarks, 2011).The historical success story and current situation of Zappos.com reveals a quite interesting storyto look at. Evaluating the value chain of the organization is really an unprecedented experienceand a breathtaking act. International Journal of Managing Value and Supply Chains (IJMVSC) Vol. 3, No. 3, September 201241The concept of selling shoes online was really a wonderful thought considering the fact that it isalways difficult for the customers to get the shoes of right size colour and shape by visitingstores to stores. Zappos.com understood the fact that it can make the job of the customers fareasier by putting all the information of the product on internet and customers can get theirdesired product very quickly only by visiting the websites within a short span of time. Their ideaof selling shoes online also boosted by the boom of internet during 1999. Selling shoes onlineenables them to create a successful value chain which is also very much suited with the demandof modern times (Hoyt and Marks, 2011).When Zappos.com started the operation in 1999, the total shoe market in the U.S was about $40billion and only 5% of that done through mail order. The company found their opportunity onthat fact. They believed that they can satisfy the needs of the their customers in better ways ifthey incorporate online selling by providing catalogs in the web sites and customers can easilychoose their priority and can give order. That system was really worth of taking considering thefact that, in modern times that particular value chain is the more efficient which can fulfil thecustomers’ needs in better ways. In that sense the concept of Zappos.com to sell shoes onlinewas really a praiseworthy and suitable one (Hoyt and Marks, 2011).Looking at the value chain strategy of Zappos.com portrays the fact that they always looking forbuilding a strong loyal customer base. They believe that only loyal customers can ensure longterm sustainable relationship with the company and ultimately can make the company a realprofitable one. Alongside building a loyal customer base another major strategy of the companywas not to look for immediate profit rather tries to build the corporation and look for sustainablegrowth. These strategies are the major reasons behind the historical and unprecedented successof the Zappos.com Corporation (Hoyt and Marks, 2011).Zapposs.com also believed in maintains strong organizational culture for ensuring the bestpossible value chain for the customers. It always maintains the workplace suitable for working.It also ensured that the working environment will be enjoyable where everyone will just havefun to work there. Ensuring fun at the workplace was a major reason for their high success in thebusiness process. Zappos.com always trusted its employees. The organization believes that ifthey can satisfy the employees ultimately that will contribute towards making the value chainefficient and penultimately customers will be satisfied and their goal of building loyal customerbase will be obtained (Hoyt and Marks, 2011).Zappos.com established value chain to ensure WOW for the customers. It always strive towardsachieving WOW in its every sphere of operation It wanted to give its customers the mostwonderful experience while shopping so that the customers can remember the event and that willtrigger their future purchase. The company believes that providing customers the best possibleservices should never be considered as an expense rather it is an investment that can pay back ingreat way. Best customers service will ensure high performance, high performance will ensurehigh percentage of customer satisfaction and high percentage of customer satisfaction willensure loyal customers (Hoyt and Marks, 2011).In order to achieve WOW in their value chain and customer service the company ensure thefastest website in their armoury. That particular website was faster than any other rival retailfirms. Alongside the internet facility for taking orders from the customers the company alsoutilize telephones services up to the greatest extent. They ensure toll free numbers. That numbersassist the customers profoundly to give their orders without any expenses. Through telephoneand internet the company use to provide every possible information to the customer at thequickest possible of time. Those information include products, price, location, delivery timesand also many other important aspects. Those activities really helps the organizations to buildthe most efficient and smooth value chain for serving the customers (Hoyt and Marks, 2011). International Journal of Managing Value and Supply Chains (IJMVSC) Vol. 3, No. 3, September 201242Another significant and important policy in the value chain of Zappos.com was the fit and returnpolicy. That particular policy was a real good one considering the fact that it is unlikely thatshoes will fit to each and every customers at the first purchase occasion. In order to makecustomers feel free from risks and purchasing consequences the company first implemented 60days and then 365 days fit and return policy. That ensures remarkable value into the value chainof the company. That makes customers really free from thinking a lot. They were purchasingmany kinds of shoes online as they can return those anytime if they virtually want to do so. Fitand return policy was definitely a wonderful addition into the value chain of Zapposs.com (Hoytand Marks, 2011).It is the most common characteristics of customers that they always want to avail as manyinformation as possible prior to purchase a certain product. It is always the responsibility for theproviders to ensure that. The case is of more significance for online or .com companies likeZappos.com. The company was also not behind understanding that particular fact. They alwaysuploaded the pictures of the shoes and also from different angles to give clear idea to thecustomers regarding product design and variety (Hoyt and Marks, 2011).Apart from that the company also put detail information and expert’s opinion besides thepictures of the shoes and also customers can make their comments regarding the design and
price of those shoes. It was really a wonderful idea to have those facilities on the internet as
those acts and information provided the customers all kinds of required data prior to make their
purchase decision (Hoyt and Marks, 2011).
Zappos.com use to deal with 95% of orders through online. In Addition the rest of the orders use
to take place via a call centre. The call centre was there to provide the customers the best
possible experience. They consider the interaction with the customers through the call centre as a
branding opportunity and they never fall back in fulfilling the demand of each and every
customer through the call centre. Call centre operators also provided with training opportunities
so that they can efficiently deal with the customers in various cases like order receiving, order
delivery, return products dealing, providing information of all sorts etc (Hoyt and Marks, 2011).
Along with above mentions strategies and activities another major addition in the value chain of
Zappos.com was to provide the customers the most rapid delivery and also with no additional
charge. Zappos.com always wanted to surprise the customers by beating their expectations. In
order to do so they have special contract with renowned company UPS. They use to deliver
products even at a faster rate than UPS tends to do in normal cases. If customers place and order
in the evening they will receive it in the next day. That is even more exceptional considering the
fact that the normal delivery tenure of UPS is four to five days. The company believes that
surprising customers in a positive way is certainly a big advantage for the company over the
competitors and without any doubt it will give them a huge edge over others. Rapid delivery is
definitely a wonderful addition into the value chain of the company and that assists them greatly
in building strong positive reputation of Zapposs.com (Hoyt and Marks, 2011).
As an online retailer of shoes it was immensely important for Zappos.com to attract different
kinds of brands. Simultaneously it was also important to attract the most popular ones which are
frequently purchased by the customers. In order to obtain efficiency in brand attraction and
selling as well the company started with 60-70 brands and then they customize it according to
the demand and purchase pattern of the customers. It helps the organization immensely to obtain
operation efficiency as it ensured cost effectiveness and high levels of customer satisfaction at
the same time. Initial
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