Fundamental Of E Business Zappos Company Marketing Essay
In 1998, 24 years old Tony Hsieh sold his company, internet advertiser Link exchange, to Microsoft for $265 million. A year later, he met an even younger entrepreneur, Nick Swinmurn, who had an idea no investor would touch: selling shoes on internet. Tony Hsieh did not think consumers would buy shoes sight unseen, and Nick did not have a Footwear background. It sounded like the posters child of bad internet ideas. But Hsieh was intrigued and invested $500,000 in shoesite.com... Nick mentioned the size of the retail shoe market- $40 billion and the more interesting thing was that 5 percent was already being done through mail order catalogues. They soon changed the name to Zappos. The Zappos is comes from the Spanish word zapatos, meaning shoes. Within six months, he and swinmurn were running the show together.
Since it is founded in 1999. Zappos.com quickly grew to the retailer of footwear on the internet. Nick decided to be about providing the best service. Nick expanded the warehouse to 77,000 square feet and stopped having manufacturers ship directly to customers. Zappos did "almost nothing" in sales for 1999.On things that improve the customer experience than on marketing so Nick run the warehouse 24-7 it's not cheap or efficient, however, it allows to get the shoes out more quickly. Zappos have a 365 days return policy with free shipping both ways.
In 2004, Nick Zappos store move to Las Vegas. Because of good customer service by people in SanFrancisco. Las Vegas has lot of call centres and many people who want to do customer service as a carrier. Because of providing good customer service, Zappos.com the web's most popular shoe store today announced the most active holiday buying season in its four year history. For the months of November and December, Zappos reached $20.5 million in sales, a 127% increase over last year's $9 million.
In 2005, exploding the sales on zappos.com were pushing the limits of the company outdated so Zappos management leased an 800,000 square foot building across the street to house a brand new automated fulfilment system and serves as the company primary warehouse and distribution facility. Early this year, Swinmurn moved on, leaving Hsieh at the helm of a company that had sales of $252 million in 2005. In 2007, Zappos grossed over $800 million in merchandise sales in 2007 and Grossed over $1 billion in 2009. The company was acquired by Amazon.com for a reported $1.2 billion. Zappos shown impressive revenue growth since its founding. The gross revenue numbers basically speak for themselves: 2000 $1.6M, 2001 $8.6M, 2002 $32M, 2003 $70M. 2004 $184M, 2005 $252M, 2007 $800M, 2009 $1 billion. Zappos has recently expanded into a service company that offers clothing, bags, accessories, electronics, eye ware, handbags, watches, jewellery, books, sporting goods and more.
The importance of e commerce: - Electronic commerce is an important development that has been widely acknowledged as a revolution for the conduct of business globally (Ngai and Wat, 2002). It entails the usage of the internet and technologies to conduct business transactions and has adopted in private, public, not for profit sectors in both industrialized and developing country. The potential value of e commerce has received extensive coverage in research and trade publications with the reportage of several successful e commerce stories (Berrill et al., 2004; Grandson and Pearson, 2003, 2004; Mukti, 2000). One of the major features of internet revolution is its potential to make the economic system, nationally and internationally, characterized by large number of buyers and sellers bidding in a market with perfect information. (Litan/Rivlin 2001, 315). In 1960, Information system process increases the likelihood of project success. Contempt the big amount of money invest in online advertising and e brand building opinions have remained opinions have among researchers and practitioners in the regard to the value of e branding(Nord and Nord, 1995). Importance of e branding argue that sustain and strength of company online brand is critical in the highly competitive online market. Strong e brands increase customer trust of physically unseen products or services, while helping them to visualise and understand better what they are buying. (Berry 1997).
"The extraordinary growth of the number of sites to choose from has caused confusion and frustration for the average internet user. Always complicated customers turn to the familiar. They will establish relationships with familiar internet brands and do business with these internet brands repeatedly. (Petrazzini and Kibati, 1999; Rudriguez and Wilson, 2000). As the number of companies online multiplies, the increased choice will strengthen customer- company relationships, not weaken them, for those organisations that have built premier internet brands." E branding reduces complexity and information processing time, as well as enhances relationship between customers and companies (cheskin).
Branding - According to Suzanne Tulien "Many business owners believe that once their corporate identity is designed and put on a card and ad to a magazine or newspaper, then their branding is done. However, these efforts are marketing not branding. Branding is the process of creating and living the message, as your brand is a perception that lives in the mind of customers and is defined by their experience with products and services. Therefore, a process continues in a consistent, distinctive and relevant way throughout the life of the business." Now e branding comes with a fast way. Every brand adopt the e branding to convey the message to customers. Every brand create his own website which is easy to use and help the customers to identify the product.
CORE BRAND: - The brand core is the unique soul of a brand. The brand core develops a very personal client relationship with brand. Brand core values are the foundation of brand identity. The value of brand core is the basis of brand identity and it identifies the brand in today and future.
E brand strategies: - In online shopping customers are usually unable to be engaged in sensory experiences, speaking directly with sales person, hold the product and communicate with lots of visual image in shop (Drucker P,1999). So mainly to the absence of human interaction and sensory experiences, an e brand has to create the "emotional zone" that providing more sensory elements.
To establishing an online brand as quickly as possible to first mover advantages, understand the customers' needs, attract the customers, attract the customers to give them discount and other gifts, retaining and learning about target customers, online brand strategy is to generating awareness on their websites to developing trust and relationship with customers.
"(Doll & Torkzadeh, 1990; Franz & Robey, 1986; McKeen & Guimaraes, 1997; Powers& Dickson, 1973) In order to strengthen brand competitiveness, companies have to investigate customer's sensorial needs and desires to create a deeper and closer relationship with customers through an emotional dialogue." Therefore, effectively brand means, managing people emotion and creative positive responsiveness to brands.
"Marc Gobe" (2001) limelight the importance of emotions and suggested "emotional branding" as methodology for connecting products to peoples in an emotionally way. Because all people reciprocate emotionally to their life experiences
Acquisition and Retaining: - In Online brand, Acquisition and retaining a vital stage to build their relationship with customers. For purpose of customer acquisition, an organisation is likely to focus its attention the suspects, enquiries, competitor's customer's referrals and the existing buyers. The organizations need to acquire customers and retain valuable customers (Garcia, Jancura, & Kneiss, 1993).
Understand and differentiate: - Organizations cannot have relationship with customers unless they understand them ...what they value, what types of services are important to them, how and when they like to interact and what they want to buy.
Deliver and interact: - Interaction is also a successful fact of e brand. Customers interact in many different ways such as distribution and shipping, customer service. With access to information and proper training, organizations will be prepared to gradually increase the value they deliver to the customer.
Develop and customize - Companies develop products and services and expected customers to buy them. Organizations are increasingly developing products and services, even new channel based on customers' needs and service expectations.
"Quality is when your customers come back, not your products"-MRS THATCHER.
ANALYSIS: - According to my report, I am going to analysis my website structure, strategies, transactional service, product, social networking.
Company overview: - Zappos is online shopping store (www.zappos.com). It has founded in 1998. It has popular for its shoes, however, it has recently expanded his company service that clothes, bags, watches, sports goods etc.
VISION OF THE COMPANY: - SERVICE
S story worthy experience
E enhance processes and system
R revenue and profit growth
V venture into new opportunities
I invest in the growth and development of our people
C culture through core value education
E evolution of our site and core business
E branding: - www.zappos.com is totally ecommerce website. zappos sell their shoes online and it is located in USA Las Vegas. For online retailer success zappos.com used 'wow' customers with their service," Swinmurn says. Because shoppers today have more options than ever, including internet search, on finding things to buy, Swinmurn says, "retailers must find ways to stand out with customer service. "Whether in a brick and mortar store or online, customers want the same things a large selection, the ability to view the merchandise properly, quick and courteous service when shopping or returning.
Deliver and Interact: - Zappos has used the strategy deliver and interact customers. The key policy of zappos was nearly automatic upgraded shipping to next day air. Zappos.com realized that they were competing with offline shoe retailers and not just online shoe retailer. So while the competitor was sending shoes within 5 to 7 days, zappos.com decided to do it far better next-day shipping on the site, they surprised customers individually. So when a customer thought their shoes would be coming in 5 to 7 days, they got an email that said they had been upgraded to overnight air because zappos was valued the customers, a small gesture that really makes an impression on the consumers. This one shipping policy strongly impacted return purchases.
Understand and Differentiate: - Zappos.com understands and differentiates the customer's needs so it has launched different type of shoes in the market. Customer has choice in selection of shoes such as Eco friendly and vegetarian shoes, Athletic shoes, Urban Mix, Western shoes, Trendy shoes, Loafers, Oxford, Sneakers, Demy boot, Office shoes, Park shoes and so more.
Acquisition and Retaining customers: - Zappos has used different key policies to retaining their customers. The one of the policy that implemented by zappos.com was their return policy. Zappos.com helped ease consumer apprehension around buying shoes online by offering return shipping and a 365 day return policy. Zappos.com 2009 net revenue was $1 billion that was huge amount of returns. Consumers are clearly taking advantage of the zappos.com return policies, helping to build trust and satisfaction in the service. Zappos.com had to make around customer service was eliminating drop shipping of shoes. The company went through the extra expense of warehousing all their shoes themselves to better control the fulfilment process, thereby improving customer service.
Zappos Repeat customers %
Source:"Zappos - NPS Conference", http://www.slideshare.net/zappos/zappos-nps-conference-12609-presentation, January 26th 2009
Develop and Customize - Zappos.com also develops and customizes their services because of their customers. Zappos understand their customer needs so zappos also launched so many accessories like bags, watches, sports goods, bags, handbags for their customers. Zappos.com customer service is excelling.
Service as marketing
Traditional media spend
Written on forehead
Invitation to interact
Hard to find
Openness to talk
The clock is ticking; get lost
Stick around; let's chat
Toll-free number hours
9:00 a.m.-5:00 p.m.
E BRAND COMMUNICATING STRATEGIES: - Communication plays an imperative role in the online environment in terms of replacing the absence of human interaction, furthermore, communication has the potential for fostering an active and warm hearted community atmosphere where people have the opportunity to engage in a dialogue with one another (Hunton & Beeler, 1997; McKeen & Guimaraes, 1997).Through community activities, customers recommend products or share their favourite brand with others.
Zappos.com had multiple goals. First, the company wanted to create awareness about its ongoing expansion into new product categories. "One of zappos challenge is that people still think of zappos as an online shoe store," says Aaron Magness, director of business development and brand marketing for Henderson. In addition, zappos.com wanted to both acquire new customers and reactivate lapsed ones. Zappos.com decided to target four key segments of its predominately female. Zappos.com has produced three editions of zappos life in the past year: one designed for "casual lifestyle" customers, one aimed at "active lifestyles" and one back to school issue intended for students. A fourth issue will target fashion conscious shoppers.
CORE BRAND VALUES: - With a computer science degree from Harvard, Tony decided to try a similarly algorithm approach to creating culture. Tony devised a Ten Commandments type list that include such tenant as
Zappos core values
Deliver wow through services
Embrace and Drive change
Create fun and A Little weirdness
Be Adventurous and Creative and Open minded
Pursue Growth and Learning
Build Relationships with communication
Build a positive Team and Family spirit
Do More with Less
Be passionate and Determined
These core values have driven all key decisions- form hiring to customers relationships to, downsizing. Tony explained" The employees came up with the list of core values themselves. Zappos hire and fire people based on core values.
TRANSACTIONAL SERVICES: - zappos.com has rocked online shoe industry, differentiating itself by its wide selection of styles and brands and its passionate devotion to customer service. zappos provide excellent customer service in following ways:-
Shipping and return shipping are free. Most repeat customers get upgrades to free overnight or second day delivery.
The call centre is always open and the warehouse operates 24 hours a day, seven days a week, to ensure prompt order turnaround. Zappos call centre takes more than 5000 calls a day. Customers are encouraged to call about anything, and employees work without scripts.
A customer account of zappos was wow service. With its dogmatic focus on customer service, zappos, a billion dollar online shoe retailer has won the hearts of many such customers. By delivering "wow" through service, the company generates 4 million customers of which an amazing 75% are repeat customers.
Zappos focused on delivering superior customer service over marketing. He considers "the customer service as a huge brand opportunity, a unique way to speak directly to your customers". The simple layout of the site helps in loading the page in 0.879 seconds. Moreover, unlike its competitors sites, at zappos, customers can search shoes based on its brand, size, colour, style, width, price and also heel height in case of women shoes. While searching customers can also view, the shoes form seven different closes up angles.
Customers are encouraged to order and try as many products as they want. Zappos offers a 365-day return policy. To remove the irritation of online shopping, zappos extend their return policy up to 365 days. A major nervousness of customers who shop online is complication involved in returning the product. However, with zappos, customers are complete freedom to order up to 10 pairs of shoes, try them and send them back without paying for the shipping in case they do not like them, all throughout the year. Zappos spends more on shipping than employee wages.
Zappos provides its customers a prepaid return shipping label that includes address confirmation, low priced delivery, and low cost parcel insurance. For repeat customers, zappos makes placing orders simpler through its "Bill me later" policy wherein customers can place orders without presenting their credit card numbers again.
On the www.zappos.com customer can easily track their order, order history, shipping and billing information, and manage their profile. Customer can do these services by themselves.
SOCIAL NETWORKING: - A network of people, it can be leveraged to spread messages or ideas using viral marketing techniques. Social networks are the colloquial expression for network communities that allow their users to generate and exchange own contents via internet plate forms. According to Nicolle B. Ellison most popular websites are:-
www.facebook.com, www.myspace.com, www.yahoo.com
www.msn.com, www.youtube.com, www.twitter.com
zappos.com, the online shoe and apparel brand, has grown primarily through customer and employee word-of-mouth. They have engineered online engagement through, www.youtube.com; www.twitter.com.Also zappos has launched zappos TV and brands blogs including employee tweets. Despite the global recession, zappos generated over $ 1.2 billion in sales and record profits in 2009. Zappos used their logo to attract the customers and build the relation with customers.
CONCLUSION: - www.zappos.com is an e commerce website. E commerce means sells and buying the goods on internet. Selling products and services online can have major advantages for business, leading to increased profitability and lower cost. Selling online has a number of advantages such as reducing over processing costs; customer order can automatically come straight into customer database from the website. Competing with larger businesses by being able to 24 hours a day, seven days a week. Being able to receive payment more quickly from online transactions. Using online shop as a catalogue for existing customers.
RECOMMENDATION: - www.zappos.com is e commerce website. It has mainly focused on customer service than their employee. It has spent more much money on customer service. It is not good for a specific brand like it offers 365 days return policy. Customers should be returning the products within 365 days. It's too much time for returning. It will be harmful for the company. Zappos used only two social networking sites YouTube and twitter. Other websites www.yahoo.com, www.google.com, www.facebook.com, www.msn.com are most popular websites in young generation. Zappos.com is mostly popular in USA. It is not popular in world wide. To become a famous in the world it will have been open their branches in all over the world. Zappos.com is usually famous for their shoes. Zappos.com didn't famous for their products such as bags, clothes, watches and so on. Zappos haven't spent the money on advertisement. Because of this zappos didn't famous all over the world. In future, if zappos advertise their brand on all websites, TV, newspapers, magazines then its sale will be increase.
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