100 second reflection for Week 3
Think for 100 seconds, and summarize the key things that you learned in the class in Week 3:
Zappos case
Lecture about Electronic Markets
MIS 3537 – Spring 2017
Think for 100 seconds, and summarize the key things that you learned in the class in Week 3:
Zappos case
Lecture about Electronic Markets
What I learned in today’s class is how much customer service and inventory management can really account for a good amount of the success or failure of any company. Zappos does not do anything really different than most vendors online, but their incredible customer service (WOW! factor), which includes free returns and free shipping, along with their 24/7 call center, it continues to keep customers coming back to their company and continue profits. Additionally, too many time I have ordered something and have gotten an email right after that they are out of stock and I have to wait longer, which is very frustrating and makes me inclined to not return to that company for business. However, with Zappos exceptional inventory management, which doesnt disappoint customers, along with their impeccable customer service, consumers will continue and continue to come back to Zappos.
In week 3 we learned about how Zappos utilizes unique competencies to set themselves apart from their competitors. The main competency that they use to do this is elite customer service. They found that when they promise shipping in about four days and actually get the product their earlier, customers are surprised and very pleased. The call centers are also very customer oriented and the employees working there are focused on serving the customer regardless of how long it takes. The second portion of class we talked about electronic markets. The evolution of Electronic marletplaces began with Dotcom companies popping up leading to new players like echemicals being born. Next the established players like DuPont entered with their own emarketplaces, and finally some of these companies collaborated to create their own advantage.
I learned in today’s class about Zappos and the way they penetrated the shoe market in a whole new and innovative way. They learned that they needed to make the customer the primary focus. They created resources such as a call center to meet the needs of their customers. Along with the call center, they offered things such as free returns and shipping. Their other major advantage over competitors was their ‘WOW Factor’ associated with their online store. They wanted the most efficient ordering process possible to make customers say ‘wow!’. By creating ‘Powered by Zappos’, they broke into a whole new market by handling distribution for other companies. I also appreciated the way these advantages were broken down to reveal the disadvantages behind them. There are costs and restrictions that come along with new ideas in the shoe industry, and sustainability becomes a major factor. We also learned about B2B models and e-marketplaces. The history of e-marketplaces was one of the topics that I found especially interesting. At first, new dotcom companies were popping up and competing with the brick and mortar players in the market. The response to this was that the established players struck back by creating their own website to compete.
I learned today about Zappos’ supply chain processes and how it has changed throughout the years to what it is right now. It was interesting to see that they experimented with different types of distribution until they decided to have their in-house inventory in order to provide their WOW customer service they are known for. We went over the advantages and disadvantages of each model that Zappos used throughout their supply chain. We also identified their core competencies and it was an interesting way to understand why they are successful in their business. Their WOW customer service is what has really differentiated them from others trying to get into their businesses and has allowed Zappos to achieve the impossible. We also went over the concepts of electronic markets and it was interesting to learn about the emerging trends in the e-marketplace. The new trends include the concept of “eMarketplace in a box” which is a single turnkey solution that offers other companies a sort of skeleton structure to other to participate in the marketplace.
In tonight’s course we discussed the structure of Zappos’ supply chain and how it has evolved over time. In the beginning, Zappos’ Drop Ship strategy allowed the company a good ground work for them to break into the market. By allowing the manufacturers to hold inventory in their own warehouses, Zappos was able to save a large amount of money on inventory storage, which allowed them to focus on customer service (their core differentiation). As the company grew they has to adopt new SC strategies to meet customer expectations. The story of Zappo’s SC shows that companies must be willing to change as they grow. A strategy that works for a $1 million per year company will not work for a $1 billion per year unless major adjustments are made.
Additionally, we spoke about buyer vs. seller power in eMarketPlaces. Essentially, the way businesses choose to approach their eCommerce strategy is dependent on how much power they have in the selling scenario.
In week 3 we learned about Zappos, which is a online retailer that emphasizes customer service. Their focus helped them to success in the market bust as consumer behavior changes, the company must refine their operation model as well. For example, we debated on one of their core competencies, selling products at listed price, it does allow them to have higher margins, however, as consumers grew more price-conscious, they might choose to choose a lower-price competitors. Therefore, Zappos needs to figure out a way to maintain their profits while keeping their core competencies. The second half of the class we discussed e-marketsplaces. We learned that seller and buyers have different power across industries and this determine how a business will shape its e-commerce strategy. Then we went through a brief history of the emergence of e-marketplaces, how the dotcom companies started first and the established brick-and-mortar fought back by setting up their own sites. Lastly, we learned the e-marketplaces in other countries must comply with the local regulations to operate effectively.
What I have learned in week 3 is how Zappos able to generate $2bn revenue annually in such a competitive online retail market. Zappos distinguish itself by its WOW customer service which many online retailers lack of. I remember I ordered a coffee table on Overstock in the last summer for a really nice price and there was a missing part when the coffee table came in. I called Overstock and they promised me they will send the missing part within a couple day. In fact, the missing part arrived almost two months later. So after reading Zappos, great customer service and post-sale management are really essential to a company’s success.
I learned in week 3’s class is how important staying true to ones brand is. Zappos branding image relied on excellent customer service and stayed away from using discounts to make a profit. Discounting their products would lead people away from other products and take away from their margins. If they were to discount old shoes their customers would buy the model of the shoe they want after a newer one came out in order to receive a discount. Zappos found a way to sell their old products that weren’t selling and that was to purchase the company 6pm to sell discounted products on. This way they could separate the customers that they have.
In Class 3, we spent a lot of time talking about a company’s brand. I particularly enjoyed our discussion focusing on keeping customers satisfied in the supply chain process. I think that Zappos does a really good job in this aspect. They have a heavy focus on customer care with offers like free shipping. They stay competitive because they offer such a variety of options at solid prices. We also took some time to discuss what growth options they have such as geography and private label. After checking out their website, I noticed that they have since ventured into the private label market. They sell clothing items that are “Zappos” brand! I think that was a smart move and will help them to build their personal brand.
In week threes class we went learned about how Zappos supply chain is crucial to their success. Their customer service and focus on inventory has been a highlight for the companies success. By creating their own warehouses to take full control of their inventory, they were able to excel in customer service. They have made an extremely efficient ordering process, making customers want to buy their products. We also learned about the importance of maintaining an accurate inventory. With inaccurate inventory, there can be back orders and backlash from customers if they don’t get what they are promised. Zappos has been able to separate themselves from their competition through these core competencies.
In week three we discussed how Zappos’ core competencies set them apart from other online retailers, and how e-commerce market places affect distribution networks in both B2C and B2B markets. Zappos has several core competencies, however its biggest sustainable competitive advantage is its customer service focused approach to its business model. By providing excellent call centers and features such as free product returns, Zappos created a legion of loyal customers and a strong brand name that set it apart from other online retailers. Additionally, it had to purchase its own warehouse that connected to its custom software infrastructure because of the high level of SKUs that the company carried (around 80,000). Connecting to the Zappos case, the in-class discussion centered on e-market places and the different types of supplier and buyer power that exist in different markets. Creating and implementing the e-marketplace infrastructure can be a large upfront cost, however it provides high returns in the long run because of the extended consumer reach.
Week 3 continued to build on main points we have gone over weeks 1 and 2. Supply Chain is crucial to a company’s success. Zappos was able to find unique core competencies to separate themselves from competitors and create competitive advantages. Rather than sell discounted products, which may lose customers, they bought the company 6pm in order to sell discounted items. Another strategy used was to guarantee 4 day delivery. Zappos found that when customers received their order earlier then expected they were very pleased. In today’s business world, customer service cannot be overlooked. Zappos proved that a focus on WOW customer service can gain a competitive advantage.
In class this week, we discussed Zappos and Electronic Marketplaces (eMarketplaces). From our Zappos discussion, we uncovered the competencies the company holds and the advantages, costs and sustainability of each competency. One value I thought was unique to Zappos was the “Wow!” factor they strive to instill in every customer reaction. Rather than judging their call center employees on their ability to make a sale, Zappos analyzes their customer service techniques and how effective they are in assisting their customer’s issue. Ultimately, this initiative led the shoe company to record industry-low call times early in their history. We also discussed eMarketplaces and their critical success factors. One factor that I thought was implied (but sensible) was “a sustainable business model with realistic expectations.” This success factor emphasizes long-term viability and the company within the marketplace’s ability to form relationship with its client base.
In week three, we started off with a presentation of the Zappos case and talked about how they excel in their industry. We found their core competencies, including their Wow! factor referring to their exceptional customer service. One reason why they did so well was because they created their own warehouses, which helped with controlling their inventory. Next, in our class lecture, we discussed the various types of electronic marketplaces. Some examples of these are B2B, Enterprise Saas, Network Platform, Vertical & Horizontal eMarketplaces. A major key to make any of these successful is to make sure you have a sustainable business model and realistic expectations.
What I learned in week 3: A company can be very successful even without the most competitive prices. I had not realized before just how effective customer service can be in affecting a company’s overall profits. Zappos developed an industry that did not initially seem lucrative to many, and proved them wrong with how successful their business model came to be. While before I had a pretty basic understanding of a general supply chain, each week I realize more and more how complex a company’s supply chain can be, what can go wrong, and how many dimensions to a supply chain there are in a business like Zappos. I had not known the difference between a pull vs. push supply chain, and now I know that push supply chains are more forecast-oriented, with which the shipping partner makes shipping decisions. While a pull supply chain involves more of a partner ordering, and ‘pulling’ an item to be shipped to them. I also had not known that there are significantly more B2B markets than there are B2C markets, and how each is affected by buying power and selling power. A lot of fascinating stuff!
In the third week of this course, the different strategies, including the one used by Zappos, was examined. The core competencies of Zappos was explained and we became aware of how they are able to distinguish themselves from their competitors. By creating a flexible supply chain, Zappos is able to have competitive advantages. They have strict control over their inventory and focus strongly on their customer service which allows them keep a loyal customer base and uphold their reputation. After learning about Zappos’ supply chain, we examined different forms of electronic marketplaces such as B2B, B2C and the buying power of different companies. Each business has different methods of achieving success .
Although I was not able to attend this week due to having the flu, after reviewing everyone’s comments it looks like everyone learned a lot about Zappos.com. I am actually interning with Zappos this coming summer as a Merchandising Assistant working with buyers on their Casual Lifestyle team. Throughout my interview process with Zappos, we discussed Zappos dedication to WOWing customers through their service. I experienced this first hand when I went to their Las Vegas office to interview. Their call 24/7 call center is dedicated to making the customer’s experience as great as it can be. I even got to speak with a call center employee who sent a customer tickets to their favorite sporting event to make up for a product mix up. It is reasons like this why Zappos.com stands out from all other e-commerce retailers. Their dedication to service results in huge profits at the end of every year, which they invest into employee happiness, which then results in customers being happy with their service. Zappos also has very close relationships with their vendors, which helps them get better prices on purchases, which allows for lower customer prices.
In the lecture about Zappos I was interested to learn about the different avenues they took to get to where they are today. The process of taking an idea and transforming that into a successful business wasn’t the most impressive. Zappos made huge supply chain changes over time while maintaining consistant to the “WOW” factor they deliver to customers. Also, Zappos identified supply chain inefficiencies and learned how to change them. For example, storing shoes with different brands and using robots to store boxes helped lessen confusion and free up time for employees. Zappos is an innovative business that continues to seize opportunity especially in the department of supply chain.
The Zappos case was a very interesting case that really made me think the connection between the supply chain and the online retail business. Through the case, I learned that for the online retailers like Zappos, it is extremely for them to have an efficient supply chain to support its business operations. Specifically, they have to make sure that they have a relatively faster delivery services. Also, they have to manage their inventory efficiently meaning that they will have enough inventory to satisfy customers’ need, on the other hand, they do not have to spend extra money to manage the excessive inventory that sit in the warehouse.
For me, the Zappos case was the highlight of week 3. Personally, when it comes to purchasing shoes, I rather walk into a store, find a pair of shoes that attract my eye, and try them on. Zappos utilized call centers and and free product returns to add value to its business model, which focused on customer service. The company continued to rework its supply chain in order to eliminate inefficiencies and continue delivering the WOW factor to customers. Zappos was able to attract loyal customers and create a strong brand name that gave the company a serious competitive advantage.
The Zappos case illustrated a great example of e-commerce using a supply chain to its advantage. The company was revolutionizing the retail shoe market so it had to learn from its failures. Zappos had several hiccups in its supply chain strategies until it moved distribution in house. It was the only way to deliver the great customer service that its customers came to expect. After discussing the case we learned about e-commerce, software as a service, B2B and B2C.
The zappos case was a unique case because they were the first to ship shoes solely off the web. Most people like to go into a brick and mortar store and try the shoes themselves. Zaps had a hard market to create and capture. They did this effectively on with there warehousing, return policy, and customer service. Zappos also got rid of their undesirable shoes by selling them on 6pm. Using this method didn’t clutter the main website which was a benefit. Even though the shoes came from the same warehouse, they were sold under different websites. We also learned a lot about different ways products get to the consumer through different types of e-marketplaces. Push and Pull methods are used in different scenariuos to show where the products come from. Zappos led the charge for e-marketplaces for shoes and no even sell shoes directly from other manufactures websites through their own system called *Powered by Zappos.
In week 3, I learned that Zappos’ customer satisfaction is what drove its business. The main reason why customers kept coming back and buying from the website wasn’t for lower prices, it was for the 24/7 call center, the free shipping, and the free returns (this is what was known as its “WOW factor”). This was important because the main reason that people generally don’t buy shoes/sneakers online is because they aren’t sure if it will fit right. Zappos made this less of a worry to customers by offering free shipping and returns (there was no risk). It was also intriguing to look over Zappos’ supply chain techniques and see how they have evolved over time. In the second portion of class, we discussed electronics market and the continual growth of them. I’ve definitely noticed over the past years how there are more e-markets establishing and less brick-and-mortar shops.
In week 3 our case study was on Zappo’s and how they effectively use their supply chain, solid internet platform, and outstanding customer service to drive revenue and profit. Zappos was one of the first internet retailers that offered brand name shoes at normal price with little to no shipping costs and a free return policy. They had to find ways to continue to drive performance and they did that by having a customer service team that was 24/7 and worked to please the customer. They also implemented a new SC effort that enabled them to have all their products in one spot and an easy inventory tracker that allowed them to move products quickly and with more efficiency. For the lecture we learned about Emarketplaces and their importance in today’s world. We learned about the different emarketplace platforms and the success and challenges each one faces.
Last week, we had a discussion on how Zappos became a successful online retailer. The company achieved greatness by providing outstanding service to its customers. As online business, they came up with strategies that make them more attractive than brick-and-mortar company. They provided free shipping and free returns to all costumers in addition of a 24/7 customers services. In order to better satisfy the customers needs, the company implemented a revolutionary supply chain management which allow them to ship their products faster. From the Zappo’s example, we can summarize the success of an e-commerce to three important factor : an effective supply chain, a faster delivery, and the focus on customer needs.
We covered in depth a case about Zappos and their supply chain. We discussed how Zappos went from a Third Party Logistics Model to an In-House Inventory Model. By switching to an In-house Inventory Model, Zappos realized an advantage of building their own warehouse that was based on their unique needs and they were able to have more control which drove improvements and resolved issues.
In week three, we learned about the Zappos’s successful business is driving by providing high quality customer services and operating an efficient supply chain process. During the last half part of lecture, we also covered the topic of e-Marketplace, which include the key element for building successful e-Marketplaces, and the major challenges that e-Marketplaces are facing currently.