Company & Business Description
Company Purpose
Zappos will seek to create value for its target market, such as young and adult fashion lovers with medium income levels in the U.S. and abroad, by offering a wide selection of clothing and home product categories online. The pride of place will be given to over twenty categories of shoes, ranging from aerobic/athletic models to eco-friendly boots and the Zappos Couture line, followed by accessories (bags and eyeglasses), the various items of clothing for both women and men, and houseware. Using zappos.com, Zappos will deliver retail and customer care services, including informational support, product shipping, operating a day-and-night call center, coming up with individualized delivery solutions for customers, and implementing a client-friendly return policy. The business plan’s success is likely due to its realistic nature and adaptability to the ever-changing retail market environments stemming from utilizing a flexible and decentralized Holarctic structure.
Mission/Vision Statement
Zappos’s mission centers on providing the best possible quality of customer service in shoe/clothing retail and creating ‘wow’ experiences. The company’s vision revolves around bringing true happiness to stakeholders, including clients, vendors that the service collaborates with, and employees.
Core Values
Zappos has selected ten core values to inform service delivery. The values of “delivering WOW through service,” creating “fun/weirdness,” and being adventurous were chosen to support the clientele’s desire for self-expression by offering endless styles and options (Askin & Petriglieri, 2016, p. 7). Embracing change, being passionate, pursuing growth, and “doing more with less” were emphasized to maximize the organization’s productivity and wisdom in resource allocation decisions (Askin & Petriglieri, 2016, p. 7). Finally, promoting honest relationships, building a positive team spirit, and staying humble were selected to embrace Zappos’s ethical excellence when reaching the vision.
Team & Org Structure
Tony Hsieh, Zappos’s CEO, will bring valuable takeaways from his experiences at Link Exchange to ensure the enterprise’s profitability, and his expertise in fostering connectedness will help Zappos to create positive team environments. Alfred Lin, the chairman and the business’s CFO, will apply his business acumen, experiences in the food industry, and profound knowledge of statistics to promote Zappos’s financial growth and stable returns on investments. Except for the executive leadership team, Zappos will be structured as a Holarctic entity with temporary non-fixed functional roles, with the HR department consisting of lead links, compensation appraisers, and mentors responsible for process guidance, employee development, and salaries, respectively (Askin & Petriglieri, 2016). Flexible circles consisting of lead links, rep links, and facilitators will be established to proceed with the business’s functional tasks.
Products and Services Line
Product Offering(s)
- Shoes – branded footwear items of various types to offer aesthetically pleasing solutions to protect the feet.
- Accessories – branded eyewear to enhance vision and offer protection from excessive insolation: handbags/cosmetic bags to carry daily essentials and self-care products.
- Clothing – branded head-to-toe apparel that offers physical protection, comfort, and the variability of styles.
- Houseware – branded aromatherapy products, toys, holiday decorations, and other non-essential items to create a festive atmosphere.
- Zappos Couture – high-end fashion products to offer exceptional footwear and clothing styles for the pickiest customers.
Service Offerings
- Online shop and parcel delivery – offering convenient online shopping and order tracking experiences.
- Returns – emphasizing client-oriented, earning customers’ trust, and increasing profits in the long-term perspective.
- Customer support/call center – differentiating Zappos from the competition, providing clients with assistance in purchasing, addressing preventable disputes/conflicts, and offering customized service.
Pricing Model
With a cost-based pricing model, branded products’ prices will be determined on an individual basis depending on each item’s purchase price and operating costs. The cost of customer services, including call center representatives’ wages ($11 per hour at a minimum) and shipping, will be included in each product’s price. The markup on products will be at least 50% since the business should account for the expensive overnight and international delivery services (Askin & Petriglieri, 2016).
Market Analysis
Target Market
The target market is online consumers. Zappos offers free shipping, 24/7 customer service, and free 365 uncomplicated returns.
- Geographics: 87.14% of their business is in America, the United Kingdom 0.96%, Canada 1.28%, Russia 0.54%, Germany 0.45%. (SimilarWeb, 2018). Urban and suburban.
- Demographics: 20-40, female and male, middle social class.
- Behavioral: low involvement products, therefore, the customer is more likely to be further along on the buyer decision process by Dewey, J. (1910).
- Psychographic: Customers who want excellent customer service, delivering wow, free shipping, and free returns, which is Zappos competitive advantage. (Zappos, 2018) (Ivarsson, 2018).
Zappos has a strong presence on multiple social networks. They are near the top of major brand marketing in customer service and social media. They set a high bar when it comes to being social and engaging its customer. Their social media tactic revolves around their company website and main social media networks, including Twitter, Facebook, Pinterest, Instagram, YouTube, and Google +.
Buyer Personas
Blue Persona 1
Purple Persona 2
Location Analysis
We have chosen an online platform where the coexistence of different cultures occurs naturally. We chose the online location because it gives us the opportunity to be in contact in many places at the same time without having to be physically present. With people from diverse social and cultural origins, it also allows us to obtain free promotion through word-of-mouth advertisement. Satisfied customers talk with friends and relatives about the businesses that provide impressive experiences, and when that business is available online, anyone can access it. We also chose it because this location allows us to understand that it is possible to develop business anywhere and gives us a macro-perspective of what other parts of the world expect in terms of service and invites us to take advantage of the tools and opportunities that technology offers.
Benefits:
- Access to the widest variety of styles and sizes using a virtual network of online providers
- Customer visibility at the macro-level to the online market
- availability of demographic data of potential consumers and their preferences when shopping online.
Competitor Analysis
As a matter of fact, Zappos operates in a highly competitive environment. According to Porter’s Five Forces, competition may be created from new entrants, already existing rival sellers, substitute products and services, customer bargaining power, and supplier bargaining power (Thompson et al., 2021). In relation to Zappos, the main forces of this company are already existing rivals and customer bargaining power. In other words, it is forced to apply new strategies for competitive advantages as other companies offer similar products and services. In addition, it should constantly consider customers’ preferences and expectations to ensure their loyalty.
References
DSIM Team. (2016). Case study: How zappos win the heart of customers by putting their core values into business? Dsim. In.). Web.
Ivarsson, M. (2018). Zappos customer journey | internet marketing. (n.d.). Web.
Thompson, A., Peteraf, M., Gamble, J., & Strickland, A. (2021). Crafting & executing strategy: The quest for competitive advantage: Concepts and cases (23rd ed.). McGraw-Hill Higher Education.
Zappos. (2022). Where we’re located. Web.