Zappos: history and strategy
Zappos Company was founded in 1999 by Nick Swinmurn, and after it’s launching, Tony Hsieh and Alfred Lin invested in the company through their fund Venture Frogs. The organization offers a wide range of shoes, clothing, and various household goods. In addition, the main strategy of Zappos is an emphasis on customer focus. The company claims that every client will get the best online shopping experience through quality service and products. Their strategy also includes building close relationships with suppliers, intermediaries and deliveries. Zappos is open to creating a close collaboration with the wider community, which has made the company an example of an efficient decentralized organization. The store has an extensive supplier base and high-quality logistics, which allows them to offer customers a wide range of products. In addition, due to an efficient logistics structure, one will receive high-quality and fast delivery. All this led to the fact that the company actively developed and increased the number of its sales. Thus, based on the size of the market and a certain area, and revenue for the last fiscal years, it was possible to make a forecast of the number of sales. In 2021 and 2024, Zappos’ sales are estimated at $2 and $2.3 billion, which is an indicator of effective management strategies.
Marketing plan
Such conclusions can be drawn by analyzing the ways of the company’s development, which includes several factors. First, Zappos regularly launches new product lines, which helps to avoid stagnation. Further, the company operates as part of Amazon, which is a well-known and reliable online shopping structure. Finally, Zappos is acquiring a new customer base, thus investing in development and overriding congestion. To sustain growth and practical strategies, Zappos will need $3 billion to continue operations and build credibility. The target audience of Zappos is men and women of young age who have reached the age of majority and have an average income. To attract new customers and retain current ones, the company is trying to solve common problems of online shopping. It includes a lack of a user-friendly interface, problems with payment and delivery, or an insufficient range of products. Besides, the website offers a convenient return policy that guarantees a pleasant experience.
Zappos’ marketing strategy also includes a focus on social media, which can effectively reach a younger audience. What’s more, Instagram, Facebook, and other platforms are a good way to get feedback. The most efficient marketing analysis cloud service is ActiveCampaign, which allows automatizing many processes. Such softs as Hubspot and Marketo collect relevant information about potential customers, which allows you to effectively allocate marketing resources.
Legal notes
The structural system of Zappos differs from the classical models of other companies. The organization operates on the principle of Holacracy, thus, responsibility and decision-making extend to self-organizing teams. In other words, the company does not have a classic hierarchical management model, which contributes to more democratic principles. However, Zappos is a wholly owned subsidiary of Amazon, as noted earlier, which makes certain points. Moreover, the company has a well-known legal structure, namely a limited liability company, which in this case is a formality.
Legal considerations include those related to the chosen legal model, namely a limited liability company. It includes operating agreements with specifications related to management control, withdrawal and transfer of interest, distributions, taxation, capital contributions, and dissolution. However, Amazon has taken on the responsibility of providing some of the legal services and processes for Zappos. It is formulated by the fact that Amazon is the parent company for the current store and thus is responsible for certain processes. Moreover, Amazon has agreed to grant Zappos independence and protection on several levels (Ferrell et al. 2021). The parent company’s responsibilities include health regulations, insurance, government registration, zoning laws, and permits.
Reference
Ferrell, O. C., Hartline, M., & Hochstein, B. W. (2021). Marketing strategy. (8th ed.). Cengage Learning.