Zappos - Creating a Zapp'ed Consumer Experience

Today’s Brew is for Zappos
Brew date: 14th July
Type: Served Hot, to be Consumed a.s.a.p.

To understand the business model of Zappos, check out the following links:

This Brew is aimed at improvisation of Business Models not limiting just to Zappos, but as well extending it to Amazon. The Brew firmly believes that if the thoughts enlisted are implemented to the tee, then both, Amazon and Zappos will be the Most Consumer Centric companies to exist on the Planet.

The original idea of Zappos was to create a web site that offered the absolute best selection in shoes in terms of brands, styles, colors, sizes, and widths. Over the past 9 years, the brand and aspirations have evolved, and in addition to offering the best selection, with the goal to be the company that provides the absolute best service online -- not just in shoes, but in any category.

The Brew will analyze Zappos on the following parameters:
a)     Business Analysis

a) Business Analysis:

      1)    The current Business Model of Zappos:
Zappos’ primary selling base is shoes, which accounts for about 80% of its business, along with clothing, handbags, eyewear, watches, and kids’ merchandise, which currently account for 20% of annual revenues.

Zappos’s primary sources of the company's rapid growth have been repeat customers and numerous word of mouth recommendations. Of its customers, over 75% are repeat buyers. The company's customer service reputation has been augmented through viral spreading as well.

And hence, though it might be apparent that Zappos is in the business of shoes, clothing, handbags etc, along with providing great Consumer services, its critical success business factor is highly dependent on re – servicing the Consumers with its product lines, agnostic of the brands it houses, and hence its Business Model is the Consumer stickiness, through offering products.

Offering Exhaustive Collections and Variety to the Consumers along with a great Consumer service and experience are the key enablers of this business model. Zappos has not only understood the undercurrent of Consumer triggers, but as well incorporated it in its philosophy with a simplistic uncompromisable proposition.

      2)    Building Competence with the USP
Needless to put, post understanding the Zappos business model, there is a need to develop a technical competence, which will augment its USP of providing great consumer experience. Currently, the Competence of Zappos is its USP of providing unmatched consumer experience, however it’s a Enablement Competence (Please click here to understand more about Enablement Competence), however it needs to have a Fulfillment Competence, of technical nature giving a further leverage to the business model offering higher internal scalability and limiting external replicability.

Along with it, the principles of great Consumer Experience as well need to replicated in all aspects of its value chain, infact it needs to enable the shopping and decision making experience of more social nature, encapsulating the Consumer’s social network to redefine the shopping and decision making experience along with instant word of mouth spreads.

      3)    Re - creating the USP, and Leveraging Amazon’s capabilities
Post establishing the fulfillment competence, Zappos has a huge potential to unlock the brand value on the basis of its business model and capabilities along while leveraging the capabilities of Amazon and filling the gap in the larger picture.
Zappos with its USP, Competence and Business Model philosophy should ideally on focus being a loyalty segment of business expanding to other needs of the Consumer, rather than focusing on the Consumer needs present in its product lines.
A shift in the business will help both, Amazon and Zappos well, both in terms of financials as well as spread in line with their respective business philosophies, as Amazon focuses on the Products fulfilling Consumer Needs, Zappos should Focus on Consumers, to increase its spread to other segments of Consumer needs, along with banking on the Product portfolio from Amazon.

In the Consumer Value chain, Amazon has focus on being the largest aggregator of consumer needs solutions, but its Consumer experience is limited to fulfillment services. On the Zappos front, it can leverage these Amazon solutions along while extending the spread and depth of Consumer services and experience, thus getting the Consumers with best of the value and experience.

       4)    From Consumer Service to Consumer Engagement Business Model
Along with Consumer Service, if Zappos can enable a high engagement model with the Consumer, particularly before the decision making process in the Consumer value chain, then it not only enables understanding and fulfilling the Consumer better on USP, but as well opens up opportunities for Amazon to enter in to consumer solutions, which are more dynamic, significant and consumed on high frequency basis (eg. Food, Logistics etc.)

As well, to be successful in the Loyalty segment, which entails focusing on fulfillment of as many needs of Consumers as possible, its only apt for Zappos to enable a high engagement mechanism with the consumers, serving both, as an Enablement and fulfillment competence of the consumer needs.

      5)    The Platform Model Offering
Replicating the Amazon’s platform model to Zappos proposed model, enables to increase the spread of Consumer solutions to all, Amazon, Zappos and finally to the Consumer. The idea is not to limit Consumer solutions to the Amazon’s listing, rather be an aggregator of all the existing solutions in market, thus improving the competitiveness and better the fulfillment aspiration of the Consumer.

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