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Information Technology Management

ZAPPOS CASE ANALYSIS

Fenway Cohort, TEAM 9Ashish Tandon, Belinda Nyakowa, Jorge Armida, Ki Ho Song, Marcelo Rivera, Teresa Carmo Rita

Information Technology Management, Zappos Case, Fenway Cohort, Team 9

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Agenda• Key Facts• Product and Services• Core values• Business Model• Industry and Key Competitors• Situation• Recommendations

Zappos key facts

Information Technology Management, Zappos Case, Fenway Cohort, Team 9

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• Launched in 1999 as an online store offering foot wear at bargain prices by Nick Swinmurn.

• Rapid growth since inception- average sales growth of 100% YOY.

• Purchased by Amazon for 1.2 billion $ in 2009.

• Over 3866 employees.

• Revenue of 2 billion $ in 2011, 24 million customers, 75% repeat buyers.

• Recognized by FORTUNE as one of the “Best 100 companies to work for” in 2009, 2010, 2011.

• Highest ranking debutant in FORTUNE list of top 100 in 2009.

•TONY HSEIH , CEO since 2000.

Zappos key facts

Information Technology Management, Zappos Case, Fenway Cohort, Team 9

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Zappos- Products and ServicesPrimary product- shoes 80% Men’s and Women apparel Eyewear

Handbags Watches Kids wear

Information Technology Management, Zappos Case, Fenway Cohort, Team 9

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Zappos- Core Value!

Philosophy and Value Proposition“Deliver the Wow”

Product Variety1250 brands and 2,800,000 products

PromisesFree shipping, 365-day return policy, 24/7

Customer service.

Information Technology Management, Zappos Case, Fenway Cohort, Team 9

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Zappos business model

There are 2 ways to see Zappos Business Model

How Zappos see it How we see it

• # of Suppliers• Delivery• Customer service• Culture• Core Values• Return policy• Word of mouth• 75% Repeat Customers

• Passion• Purpose• Happiness• Emotional connection

People will never forget how you make them feel – Customer Service

The only tangible asset of an E-Commerce

Information Technology Management, Zappos Case, Fenway Cohort, Team 9

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Industry and Key CompetitorsOnline Footwear Industry

• $3 billion dollar industry • Demand is driven by fashion and

demographics• Profitability: attractive footwear

and customer consciousness.• Rapidly changing customer taste’s• Efficient inventory management is

critical.• Strong brand recognition .• Fast growing industry

(17.4%p.a)room for more entrants• Zappos is the No.1 footwear

retailer in this industry

CompetitorsBluefly J C Penny Shoe Buy Piperlime

Eastbay DSW Endless 6PM

Information Technology Management, Zappos Case, Fenway Cohort, Team 9

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Zappos- Situation

Zappos has a consistent history of leveraging the inherent strengths in information technology to its advantage and create customer value at the same time.

Implementation of SAP in 2010 created co-value for Zappos as well as the customer• Faster closing of financial statements , because of faster matching of invoices ,

leading to faster response rate from Zappos.• Effective management of back end operations , leading to effective service

level in the front-end.• Effective tracking of customer orders and returns, leading to effective account

reconciliation.

Consistently used non traditional platforms to communicate and connect with its audience , including , viral videos, blogs and micro-blogs (Twitter)

Information Technology Management, Zappos Case, Fenway Cohort, Team 9

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Recommendations

• Zappos has been very successful using Twitter to leverage their sales, they should continue this but keep in mind the following things:• Leadership. The leaderboard that Zappos uses to measure every employee’s

followers has always been led by its CEO with over 2.2M.• Transparent Brand. Zappos has never filtered the Twitter posts they show on their

webpage. Both good and bad reviews are accepted and every bad review is seen as an opportunity to improve

• Celebrate your fans. Zappos created special tracking pages for their favorite outside fans. This is a way the company says thanks to its best Twitter fans.

•After their success in Twitter, Zappos should try to replicate this formula in other sites such as Pinterest.• Pinterest has recently become the third biggest social media site.• The site’s structure would be perfect for marketing Zappo’s products

Information Technology Management, Zappos Case, Fenway Cohort, Team 9

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THANK YOU!

Information Technology Management, Zappos Case, Fenway Cohort, Team 9

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References

1. http://www.ibisworld.com/industry/online-shoe-sales.html2. http://www.valueline.com/Stocks/Industry_Report.aspx?id=72593. http://en.wikipedia.org/wiki/Zappos.com4. http://www.zappos.com5. Cegielski and Rainer. Wiley Plus. 3rd Edition. Introduction to Information Systems.