ZAPPOS: the Largest Online Shoe Retailer - Case Study Example

ZAPPOS-the largest online shoe retailer Zappos.com is the largest online shoe retailer located in Henderson, Nevada. Amazon.com acquired the purchasing rights of Zappos.com in 2009 for a high value of money because of its reputation to the outside environment. Since, its establishment, Zappos.com is the leading online shoe retailers’ store. It achieves a competitive advantage over its rivals through the loyalty business strategy and the liaison marketing that is embraces. The key source that contributes to the growth and development of Zappos.com is the recurring customers and the oral recommendations from consumers that receive quality services. Over its course of operation, this company has over 75% of recurring consumers. The customer service has a better reputation that is augmented by the online trust drivers that the company utilizes in increasing its loyalty, credibility, and trust among others towards the buyers. Internet marketing has tremendous influenced the welfare of this organization. I used to navigate through the website aimlessly and after I was assigned the task of searching its validity, I had to evaluate its website in order to ensure that, it is a reliable website and one could place an order with ease. In my evaluation, I consulted various scholars, researchers, peer-reviewed sources, and so forth in order to determine the forces behind Zappos.com being the largest online shoe retailer. Online trust was the key aspect that enhanced the wellbeing of Zappos.com (Cheskin/Sapient Report, 1999). It is essential to adopt an acceptable definition of trust before commencing on this topic. According to” (Rousseau, Sitkin, Burt and Camerer, 1998, p. 395), “Trust is an emotional state that comprises the aim to accept the liability established on the positive anticipations of behaviors of another”. Trust entails the enthusiasm to agree to the susceptibility, but with hope that a person can depend on the other party (Lewicki et. al. 1998; Moorman, Zaltman & Deshpande, 1992; Morgan and Hunt, 1994). In internet marketing, trust is perceived in lieu of relationship marketing (Doney and Cannon 1997; Dwyer, Schurr and Oh 1987; Ganesan 1994; Ganesan and Hess 1997; Morgan and Hunt 1994). In addition, in studying the Buyer –seller interactions, trust between the two persons takes time and depends on the observations that the buyer makes on the seller’s, consistency, constancy and credibility (Anderson and Narus, 1990; Doney and Cannon, 1997; Gane san, 1994). This view is unswerving with the behavioral reliance proposed by Schlosser, White, and Lloyd, 2003). Online trust, or rather the trust on the internet, greatly differs from offline trust in significant ways. As opposed to the offline trust, the key thing in online trust in the website, application of internet in transactions and the technology used. The website used by a firm can make a good foundation in building the customers trust, and thus enhancing the reputation of the seller (Jarvenpaa et al. 2000). The manner in which a customer would relate to an offline seller is similar to his/her dealing with a website and customers develop views of trust in a website depending on their relationship with the website. To the degree that a customer develops some positive impact about a website and accept liability, he/she must develop some trust with the website. The customers view pertaining to the competence of a website to carry out its purpose, and its perception in offering quality services behind the online business is contributive to his/her insight of trust in the website. In this context, online trust comprises customer perceptions of the way the site would deliver based on the expectations of the customer, and the authenticity of the information and self-assurance of the site. There are various perceptions driven by numerous precursors. Effects of Drivers of Online Trust Even though, online trusts have numerous potential antecedents and impacts, as detailed by Shankar et al. (2002), based on the experience I have on Zappos.com I consider consumer characteristics as the antecedents that have contributed towards the success of this online shoe retailer business. Behavioral intents have been a major consequence that has played a major role in enhancing the wellbeing of Zappos.com online shoe retailer. Based on the research carried out, confidentiality, security, navigation through the website, site presentation, the strength of the brand, order accomplishment, society features, and perfection of the website are some of the main drivers that have positively influenced Zappos.com organization (Cheskin/Sapient Report, 1999). In addition, the features of the website and acquaintance with the website, the online experience, the shopping experience in the internet, the type of entertainment all these falls under the brackets of consumer features that enhances online transactions. In essence, in order for the impacts of the website and consumer features on the online trust, and behavioral intent trust to contribute to the growth and development of an outstanding website, the seller must ensure that the buyer is aware of how the website operates. The seller ascertains this by simplifying the contents found in the website. This is very significant to the customer since the navigation is also simplified. Another test driver used in identifying the efficiency of the website is the privacy aspect. Privacy or the confidentiality of the information provided by the buyer is very essential in increasing the effectiveness of online trading. A reliable website must adopt and implement privacy policies aimed at safeguarding the wellbeing of the buyer. In this case, the privacy statement must assure the buyer any personal identifiable data is sealed from the third parties (Cheskin/Sapient Report, 1999). Privacy is a major driver of online trust (Hoffman, Novak and Peralta, 1999), and its impact on trust varies across website classifications. Privacy is applicable in website classifications that have information that is risky in nature. For that reason, in order to determine the trustworthiness of a website, the buyer believes privacy is significant that any other feature in the website. A transaction website may require the buyer to provide confidential information, such as the location of the buyer for delivery purposes. This is pertinent information that should be private and away from the third party. Therefore, for websites that have transactional nature, privacy is vital in order to safeguard the welfare of the consumers (Cheskin/Sapient Report, 1999). Security Security is also a driver of online trust, and this refers to the security of the computer used in carrying out the transactions, as well as the safety of the credit card and any financial data necessary for transacting. Security is very essential in transacting online trading (Belanger et al. 2002). The website should contain seals of approval and this has a positive influence on reliability (Cheskin/Sapient Report 1999). The information on security is different on various websites depending on the products and services offered by particular organizations. Website security is related to the financial threats at the websites (Biswas and Biswas, 2004). Websites that are transactional oriented such as Zappos.com have a higher rate of financial risks since the activities involves products and services that have money value, and exposure of financial information may threaten the wellbeing of the parties involved in the transaction. For that reason, the effect on online trust should be at a higher rate (Cheskin/Sapient Report, 1999). Another major drive of online trust is order fulfillment. It can be defined as an issue of a service or goods against orders issued by customers and are an important feature of website especially those with transactional ability. Prices at a certain website relate directly to order fulfillment of the same website. (Pan, Ratchford and Shankar 2002, 2003).The relevance of order fulfillment to a customer varies across different websites, it is expected to rise for sites with high involvement or high ticket prices like computer and e-tailer sites compared to other websites. Customers may depend on the order fulfillment record of a certain website if they are not certain of the website to care for their products, and the trust level is low. Order fulfillment can be a significant factor of online confident for items with a high cost (Cheskin/Sapient Report, 1999). Brand Strength. This is a trust label, used for intangible products and, it assists in portraying quality and certainty in building trustworthiness. (Keller 1993). Consumers can rely on the information they get from brands even in the absence of other pertinent information from the products. This ascertains greater reassurance online in customer product decisions (Degeratu, Rangaswamy and Wu 2000; Yoon 2002). For example, ZAPPOS has a strength band that is of high quality than other electronic retailers that I navigated through (Pan, Ratchford, and Shankar 2003). Brand strength is quite significant in building trust, and they differ depending on website classification (Cheskin/Sapient Report, 1999). Even though Zappos.com is efficient as an online retailer, their some suggestions that I believe shall work towards the wellbeing of the company. I recommend the company to improve on its navigation process. It takes time before one identifies where the offered products are located. Failure to identify such crucial parts may increase the aspect of suspicion, and thus lowering the productivity of the company (Biswas and Biswas, 2004). References Biswas, Dipayan and Abhijit Biswas (2004), “The Diagnostic Role of Signals in the Context of Perceived Risks in Online Shopping: Do Signals Matter More on the Web?” Journal of Interactive Marketing, 18(3), 30-45. 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Bies (1998), “Trust and Distrust: New Relationships and Realities,” The Academy of Management Review, 23 (3), 438-458. Morgan, R.M., and S.D. Hunt (1994), “The Commitment-Trust Theory of Relationship Marketing,” Journal of Marketing, 58 (July), 20-38. Moorman, Christine, Gerald Zaltman, and Rohit Deshpande (1992) “Relationships Between Providers and Users of Market Research: the Dynamics of Trust within and Between Organizations," Journal of Marketing Research, 29 (August), 314-29. Pan, Xing, Brian T. Ratchford, and Venkatesh Shankar (2002), “Can Differences in e-Tailer Prices be Explained by Service Quality?,”Journal of Academy of Management Science, 30 (4), 433-446. Rousseau, DeniseM. Sitkin, SimB. Burt, Ronald S (1998), “Not so Different After all: A Cross-Discipline View of Trust,” Academy of Management Review. 23(3), 393-404. Shankar, Venkatesh, Arvind Rangaswamy, and Michael Pusateri (2001), “The Online Medium and Customer Price Sensitivity,” Working Paper, Penn State University, University Park Read More