ZAPPOS.

COM: DEVELOPING A
SUPPLY CHAIN TO DELIVER
 INTRODUCTION

• Founded in 1999, Zappos.com is an online shoe and apparel shop. Zappos is the world’s largest
online shoe store with the best possible product and selection. In July 2009, it was acquired by
Amazon.com in an all-stock deal worth around $1.2 billion. Zappos still operates as a liberated
entity with its brand and culture intact.
• In1998, Zappos.com founder Nick Swinmurn was searching for a certain pair of shoes in San
Francisco mall.
• He found difficulty in finding the right style, right color, and right size shoe. Nick spent a couple
of hour in the mall, walking from store to store, finally going home frustrated and infuriated.
• Nick found there were no major online stores that focused on shoes. He quit his job and started
an online portal, Shoesite.com. He changed its name to “Zapos”, i.e. derived from Zapatos; a
Spanish word for “Shoe”. In 1999, Zappos was born.
THE ZAPPOS SHOPPING EXPERIENCE

• It wanted customers, after any interaction with the company, to say “Wow!”.
• Zappos as “a service company that sells shoes,” which he later amended to
include the wide range of other products sold by the company.
• The company addressed this challenge in a number of ways, including free
returns, providing extensive online product information, maintaining a call
center, and free overnight shipping.
• The company addressed this challenge in a number of ways, including free
returns, providing extensive online product information, maintaining a call
center, and free overnight shipping.
 SUPPLY CHAIN MANAGEMENT

Buying :-
• The traditional practice followed by shoe manufacturers was to develop
new shoe styles that would be introduced at trade shows.
• Retailers would place orders for the upcoming selling season for
delivery throughout the season.
Scheduling Product Delivery :-
• Zappos gave suppliers delivery windows to help schedule when
products arrived at the distribution center, and to try to smooth the
receiving schedule.
• The Zappos supply chain was not as simple as the linear process of
placing orders with its suppliers, stocking inventory, and shipping orders
to customers. For instance, in 2007, Zappos purchased 6pm, a discount
online shoe retailer.
• The capability that Zappos created to sell online to individual customers
was also valuable to its vendors’ direct sales initiatives. Most
manufacturers of retail products had distribution systems that were built
around shipments of relatively large numbers of goods to retail stores, or
to distribution centers operated by large store chains.
IDENTIFY THE BEST PRACTICES

• Zappos had a solid organization culture, which was created and supported by the
executives. This culture, together with organization esteems, was a solid effect on
all parts of the business, counting the production network. It's about building
connections where we treat each other like family. It's about collaboration
furthermore, having a ton of fun and not paying attention to ourselves as well.
• It's about development, both individual and expert. It's tied in with accomplishing
the outlandish with less individuals. It's about transparency, going out on a limb,
and not being reluctant to commit errors. Be that as it may, most of all, it's tied in
with having confidence that in the event that we make the best decision, at that
point over the long haul we will succeed and manufacture something great.
PROBLEMS

• Scheduling product delivery

• Zappos faced difficulties in scheduling deliveries from its suppliers to the
distribution centre.
• Multiple delivery dates
• Because of large number of shipments from its vendors led to traffic
management difficulties for the warehouse.
• Limited visibility into the manufacturer supply chains.
• Excess inventory
SWOT ANALYSIS

Strength
• The main strength of zappos is company culture. The company culture is defined in its temp
core values that include items like deliver WOW through service.
• Zappos employees are trained to genuinely care about the customers.
• The candidates who are hired newly have a separate interview with HR department that
focuses on cultural fit.
Weakness
• People are wondering why a fast growing company for such less price to amazon
• Zappos offer 365 day free shipping, overnight shipping also will merging with amazon will
affect the supply chain
OPPORTUNITIES - Zappos Wow can explore adjacent industries Manufacturing, Marketing, Organizational
culture, Supply chain to further market growth especially by extending the features of present products
and services.
•  Reducing Cost of Market Entry and Marketing into International Markets - globalization along with boom in
digital marketing and social media has considerably reduced the risks of market entry and marketing in
international market.
Threats
• Zappos Wow has to deal with these costs as governments are trying to levy higher environmental taxes to
promote cleaner options. For Zappos Wow it may result into higher logistics costs and higher packaging
costs.
• Over the years the bargaining power of customers of Zappos Wow has increased significantly that is
putting downward pressure on prices.
PESTLE ANALYSIS

• POLICY- To provide an efficient meaningful and customize experience

• ECONOMY- Investors should be worried and they should be prepared as economic
growth will depend on ability to innovate create and re-invent
• SOCIETY- Customers are accessing internet mostly from their homes
• TECHNOLOGY- Zappos should concentrate more on the power of social media.
• ENVIRONMENTAL- Zappos products are completely free of animals fur and zappos is
committed to staying that way.
• LEGAL- Government is imposing tax when companies are using online advertisement
and use of commercial emails.
RECOMMENDATIONS

• Zappos should spend money on traditional media.

• Zappos should reduce inventory and shipping cost.
• Pinterest has become the 3rd biggest social media site so they should
post their products frequently on Pinterest.
• After merging with amazon it can utilize its global network to create an
international presence.
WHAT ARE ZAPPOS’ CORE COMPETENCIES AND SOURCES OF COMPETITIVE
ADVANTAGE? HOW SUSTAINABLE ARE THEY? WHAT ROLE DOES CORPORATE
CULTURE PLAY IN THESE QUESTIONS?

The online shoe retailer Zappos is known for its client assistance. Broadly, all
representatives of Zappos, including the CEO, are required to fill in as a client care
delegate as a feature of their preparation. Furthermore, Zappos has various accounts
of client assistance agents going well beyond to support the requirements of their
clients.
This center competency has permitted Zappos to perform in the profoundly aggressive
online shoe showcase, and the organization has sorted out emphatically around client
care as their economical upper hand. This preferred position ought to enable them to
remain focused, anyway it is not yet clear whether they can keep on cultivating a client
first culture, and whether their rivals will have the option to replicate.
• For Zappos, organization culture is a main driver in their upper hand.
Without a solid organization culture, it isn't likely their representatives
would arrange around client care and give the extraordinary help
clients have generally expected. The way that initiative at Zappos
routinely addresses and rewards client care adds to the organization
culture and enables the organization to look after core interest
HOW IMPORTANT IS NEXT DAY AIR SHIPMENT TO THE CUSTOMER EXPERIENCE? IS
IT WORTH THE COST? HOW MIGHT YOU CHANGE IT IN THE COST-CONSCIOUS
ENVIRONMENT FACING THE COMPANY IN LATE 2008?

• Following day air shipment is significant as Zappos is attempting to

make the comparative sentiment of purchasing a shoe from a physical
store. That is the inclination of satisfaction and the craving to wear the
shoe right away. Albeit following day air shipment doesn't give clients a
similar inclination, it is close. The significance of following day air
shipment, without extra charges, can be estimated by the fulfillment
level of clients.
• Zappos prompt preparing of client's requests diminished the holding up
time enormously, made the "Amazing" sway. It is certainly worth the
expense as it is the plan of action of Zappos, which is to sell
'administration'. 24 hour conveyance is essential to have as this will
significantly improve client experience. It likewise gives the comparable
HOW WOULD YOU 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?

• With more individuals purchasing things on the web, it is significant for Zappos to extend their
business further by changing it up of items in their site to target diverse market fragments. This
can develop Zappos client base. Zappos can begin by selling items that are like the presence of
its center shoe business. For example, selling of garments that matches the shoe, gadgets for
sports (for example Adidas keen watches), to even furniture, for example, shoe cupboards.
Accordingly, it permits Zappos to focus on their own business territory better related to its items
extension.
• As Zappos grow, it is basic to procure the correct individuals for the activity to stay beneficial.
Staffs that are energetic in the items they are offering, will in general have better information
and intrigue. They would have the option to make suggestions based to their own aptitude and
experience. This lessens costs like item information preparing can at present enable them to give
clients the equivalent 'Goodness' experience.
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?

Zappos center competency is to convey their best assistance and items to the clients. These
cost-cognizant purchasers ought not influence their business much as they make up a little
level of Zappos client base. Be that as it may, as more individuals are looking on the web for
best arrangements, Zappos can't disregard these cost-cognizant clients despite the fact that
they don't influence the organization much. To counter this, they would first be able to decide
to advance their items with low pace of limits to such an extent that they can in any case
keep up their business development and without influencing their essential working rule which
is to give the best assistance quality to the buyers. This will lure purchasers who are cost-
cognizant to purchase any sort of items from Zappos, since clients are continually paying
special mind to limits. They ought to likewise monitor these purchasers' practices just as their
rivals' sites, ensuring that their rivals don't draw their clients from Zappos
Thank You