Zappos Case Study - Assignment Example

?Zappos Case Study In the year 1998, a young man d Nick Swinmurn went to a shopping mall in San Francisco to buy a pair of shoes. He was disappointed that he was not able to find the particular size, color and style that he wanted. He went ahead to search for his desired shoe type on the internet and was frustrated that he couldn’t get an online retailer who specialized in footwear only. This prompted him to create an online retail site specializing in footwear which grew to give rise to Zappos.com (Frances, Robin and Laura, 2011). From its inception Zappos value proposition has been to create and deliver to each customer a WOW experience. They are able to achieve this by simply empowering their workforce to deliver a shopping experience that is irresistible. They provide unrivalled customer service and free fast shipping , while at the same time offering almost one thousand two hundred and fifty brands and two million eighty hundred thousand products. As a result of this strategy they have a fanatical customer loyalty with up to 75% being repeat customers (Zappos, 2011). Zappos ability to create and capture value emanates from their nearly obsessive passion to create customer satisfaction and good customer relationships. In fact customer’s loyalty is of such great importance to Zappos that it is their primary goal to be the best customer experience and customer service company. They have a culture that runs deep down and that is customer-focused (Scribd, 2012). In order to create and capture value, Zappos directly invests huge amount of money into customer service. They will only hire employees who are customer-oriented who are able to fit into their culture of optimal employee satisfaction. Even after employing people who are customer-oriented, they further train these individuals thoroughly the art of creating customer loyalty. Zappos approach to creating and capturing value is customer centric. They make use of such strategies as offering free delivery for products purchased, they even allow for free returns when a customer is not happy with the product and they also have a 365 day return together with periodical service upgrades. As a result, 75% of their sales emanate from current customers and still have a tremendous rate of growth despite the poor economy (Sam Houston State University, 2011). Zappos have also developed a service culture which is built around ten core principles which stipulate that every new employee has to take four weeks of customer training on loyalty. Their employees are committed to their work and build life long relationships with customers. They make use of social sites for networking and making contact with customers and in the process obtaining invaluable customer feedback and criticism (Sam Houston State University, 2011). The growth and success at Zappos is also attributable to a good corporate culture. The culture at Zappos promotes and encourages employees to be themselves. The employee culture at Zappos is focused on good customer service and is of one mind. They care that the customer is happy with the product that he or she chooses to buy. This culture of customer satisfaction is entrenched deep into the beliefs of the employees, their interactions with customers and their hiring protocols. During the hiring process, there are two sets of interviews that are done. One set of interviews is done by the hiring manager together with her or his team. During this stage they check for the basics like relevant experience, and technical ability of the job applicants. The second set of the interview involves the HR department who perform the interview for the sole purpose assessing for culture fitness. They examine whether the individuals would easily fit into their culture (Fast Company, 2012). Zappos culture is built around ten core values. These values include: Deliver WOW through good service, drive and embrace change, creating a little weirdness and fun, humility by employees, be determined and passionate, do more with a little, being creative, adventurous and open-minded, pursue learning and growth, build honest and open relationships with communication, and build family spirit and positive team. At Zappos, culture is more than just money (Fast Company, 2012). Just as the culture of Zappos has played a key role in bringing about growth so is the brand. Zappos brand refers products that are of high quality and meet most of the consumer’s needs and tastes. Zappos have gone out of their way in to design and present their products in a way that not only catches the attention of potential customers but also retaining them. Their products have a good public image which results from the good consumer relationships they create via the social networks and well trained staff. In order for zappos to create and develop their brand, they presented the market with a wide variety of products that meet and satisfy the needs and demand of the consumer. They succeeded in convincing their consumer on the high value of their products (Branding strategy blog, 2012). Having succeeded in demonstrating to their customers the value in their products they were able to acquire new customers who truly understood the value of their products and these customers. The company interacts with is customers via networking sites and are thus able to reach a bigger percentage of people. As people understand more and more of the products, they get used to the products creating a personal connection with the products and the company is able to earn their trust. Zappos through continuous and active engagement with it s customers are able to keep up with the ever changing and evolving consumer expectations. The consumers taste changes daily as they choose to obtain or buy the best and latest product in the market (Branding Strategy Blog.com, 2012). As time passes by, labels that do not have meaning continue to fall. The meaning of brands is continuously being defined with much more depth than just logos and simple ownership. Today shopping is following certain trends that if a product fails to reflect these trends then it would definitely not cope. For instance, the current trend is to produce, shop and sell based on production and design that is environmentally “Green.” Good companies have the ability to investigate critical component drivers and use them as their edge (Branding Strategy Blog.com, 2012). With the increasing use of technology the use of this technology is critical. There is need of developing brands that support small screen transactions and in this way consumers can easily access products on their Ipads and mobile phones without necessarily having to use a desktop computer or laptop to access the products (Branding Strategy Blog, 2012). Zappo have been able to develop a brand that the consumer can easily access via the small transactions applications which are becoming increasingly the trend world wide. Zappos have also developed a brand that meets the desires of the consumers. The consumers have a desire for simple products that are easy to use. Zappos brand consists of products that meet the consumer expectations and this can be a key reason as to why they continue to experience growth. Through their interaction with customers via the social networking sites and client feedbacks from face to face interactions with consumers in retail outlets they have been able to collect vital information and develop acceptable and lovable products to the clients. The Zappo brand is extensible. Brand extension is a strategy of marketing whereby a company which has a product that has a very good public image uses the brand name of this product to introduce and sell another product which is in a totally different product category. This strategy has been used by organizations to leverage and increase brand equity Branding Strategy Blog, 2012). How extensible a brand is depends on the strength of consumer associations on the brand’s goals and values. Zappos has one of the world’s strongest consumer association to its brands. Their clients/consumers have developed a strong attachment and belief in their products and as a result won their loyalty. If Zappo were to introduce a product that was in a totally different product category from the product category of their brand, it is then possible that this new product will easily catch onto the already established consumer market of the Zappos market. Amazon decided to buy Zappos in an effort to expand its market share. Amazon Targeted and hoped that by buying Zappos, they will be in effect not only expand and strengthen their market share within the soft-line retail groups/categories but would be one of the biggest online retail business companies. They believed that in acquiring Zappos they would be increasing their rate of growth (Frances, Robin and Laura, 2011). Zappos was a privately owned retailer of shoes that performed its business online. They dealt in handbags, clothing, accessories and shoes. In acquiring Zappoa not only would Amazon be increasing the product range available to their clients/consumers, but they would also be undergoing a major phase of growth. Acquiring Zappos also meant that Amazon was going to gain new customers who are loyal and in essence increase their consumer numbers tremendously. Thus Amazon stood to gain a lot in acquiring Zappos. References Frances, X.F., Robin, J.E., and Laura, W., 2011. Zappos.com 2009: Clothing, customer service, and company culture.[online] Available at: Zappa.com [Accessed 18 February 2012] Zappos.com, 2011. Enhancing the “WOW” factor with a world-class financial system. [online] Available at: http://www.google.co.ke/url?sa=t&rct=j&q=Zappos+Value+proposition&source=web&cd=5&ved=0CEEQFjAE&url=http%3A%2F%2Fdownload.sap.com%2Fdownload.epd%3Fcontext%3DDCF03C4BADB1F9EDA8395BE24CDF35F55E657812EF1B625C83DD09CBA56E6712481F3FCE4C0164E61F2D5443395DA45E1C957B0E13942D20&ei=sWM_T-38N-mu0QW265mPDw&usg=AFQjCNGE98xQti-ChTHm_geYMYIcl5t4mA&cad=rja [Accessed 18 February 2012] Sam Houston State University, 2011. Creating and capturing value.[online] Available at: http://www.google.co.ke/url?sa=t&rct=j&q=+value+creation+and+capture&source=web&cd=1&ved=0CB4QFjAA&url=http%3A%2F%2Fwww.shsu.edu%2F~dpg006%2FECON%25205333.day8.ppt&ei=yHg_T474FKnD0QXS9uGODw&usg=AFQjCNFNckWsFjr3RO7gu61z6BbRdNFhEw&cad=rja [Accessed 18 February 2012] Scribd, 2012. Marketing: Creating and capturing customer value. Zappos: A passion for creating customer value and relationships. [online] Available at: http://www.scribd.com/doc/64713667/Kotler-POM14-IM-Ch1 [Accessed 18 February 2012] Steven, R., 2012. The happiness culture: Zappos isn’t a company- it’s a mission. [online] Available at: http://www.fastcompany.com/1657030/the-happiness-culture-zappos-isn-t-a-company-it-s-a-mission [Accessible 18 February 2012] Branding strategy Blog, 2012. Top twelve branding keys for 2012. [online] Available at: http://www.brandingstrategyinsider.com/2011/12/top-twelve-branding-keys-for-2012.html#more [Accessed 18 February 2012] Read More