HOW HAS ZAPPOS BECOME A WORLD’S ECOMMERCE REFERENCE FOCUSING ON COSTUMER SERVICE AND RESHAPING LOGISTICS
Zappos.com is an online shoe and clothing shop based in Las Vegas. In July 2009, the company announced that Amazon.com would acquire it in an all-stock deal worth about $1.2 billion.
Zappos was founded in 1999, when his founder had the initial inspiration when he failed to find a pair of brown Airwalks at his local mall. It is not difficult to understand how much connected this enterprise would be with ecommerce and efficiency in logistics. "Footwear in the US is a 40 billion dollar market and 5% of that is already being sold by paper mail order catalogs," was the main reason why the manager of the investment firm Venture Frogs, and actual CEO of Zappos, Tony Hsieh, decided to invest $2 million. Zappos may have been one of the first pure ecommerce business to be born.
Zappos has become the huge company it is now especially by focusing on having the best consumer experience. In this post we won’t try to analyze this deeply, instead we want to discover some insights of what logistics and information systems have to do with this achievement.
Build a close relationship with a reliable partner
The company ships exclusively with UPS, enabling the company to negotiate the best volume discounts. UPS helps Zappos manage returns with seven-day forecasts of incoming volumes through its free Quantum View Manage software. This tool gives comprehensive tracking information that can be seamlessly integrated into a company's in-house applications, from spreadsheets and simple databases to ERP systems. Being able to forecast this lets Zappos to save on labor costs by scheduling only needed staff.
Encourage returns to drive sales
Zappos makes its free-returns process simple. Return information is prominently featured on the retailer's website, and it's simple to print a return label on the website to send goods back. Such simplicity and transparency are important. A study conducted this year for UPS by Internet-research and data analyst firm comScore, showed 63 percent of customers research return policies before they buy.
Deliver fast, return slow
Zappos sends the majority of its deliveries overnight. But customers return merchandise by ground shipping, which saves Zappos money. Customers don't expect rush returns, Moneta says. Zappos also cuts shipping costs and improves its on-time delivery by encouraging customers to use UPS MyChoice. This free scheduling tool allows shoppers to arrange deliveries for when they'll be home or divert them to their offices. That helps avoid the hassle and expense of multiple delivery attempts.
Zappos sends the majority of its deliveries overnight. But customers return merchandise by ground shipping, which saves Zappos money. Customers don't expect rush returns, Moneta says. Zappos also cuts shipping costs and improves its on-time delivery by encouraging customers to use UPS MyChoice. This free scheduling tool allows shoppers to arrange deliveries for when they'll be home or divert them to their offices. That helps avoid the hassle and expense of multiple delivery attempts.
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