Zappos Customer Service

1021 Words Nov 13th, 2011 5 Pages
1. Zappos logistics contribute to its core competency and competitive advantage

Sharing Information with Suppliers Zappos has a very special relationship with all of its suppliers. Through every interaction they work to WOW them by not only being great business partners but Zappos shares all of their inventory information with them. They developed an Extranet which allows venders to see on hand inventory, sales and pricing and margins. This insight provides Zappos with a clear competitive advantage when it comes to managing their inventory. Instead of only having internal buyers worry about when and what to purchase the venders themselves can make recommendations. If a supplier sees that one item is selling really well they can
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This move would have severe tradeoffs when it comes to customers and UPS. Currently Zappos is UPS’ number 3 next day air shipping customer. By not utilizing this service it could have a significant impact on UPS and Zappos relationship with UPS. Even though Zappos would still use UPS for the ground shipping, UPS would see a significant revenue drop since next day air shipping is more expensive.
Since only 60% of customers would receive their order within 2 days the other 40% would not get that WOW factor of fast delivery. Zappos is known for its fast delivery and service and without that customer satisfaction may drop. Having 40% of customers not being having a WOW experience could significantly hurt the customer base.

3. Expanding the business

I would expand Zappos by extending the supply web to current retailers such as Target or Macy’s. Take Target for example. On Target.com they have an extensive shoe selection which the inventory needs to be stored in a Target distribution center. Zappos could hold this inventory and make the shipments when someone orders shoes on Target.com. This would benefit both Target and Zappos. Target would be able to reduce their shoe inventory in their distribution centers. They would also be able to offer wider selection of shoes on Target.com. Zappos would benefit by gaining a large portion of new customers who are regular Target guests. A second way I would expand Zappos would be to rely more on

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