Zappos Strategic Hrm

Retail super-giant Wal-Mart has fought its way to becoming the world's largest company. Wal-Mart’s legendary supply chain technology has allowed them to break the three-day barrier that some economists in the eighties felt that it was unbreakable. In other words, Wal-Mart is often able to replenish items on the Wal-Mart shelf in less than three days – not from the central warehouse to the shelf, but from the manufacturer to the shelf. With quick and reliable 2-day turn around, Wal-Mart is able to maintain lower levels of inventory and still meet customer demand. These lower inventory levels result in either a reduced floor plan with lower carrying costs and lower interest expense – or a greater diversity of products on the store shelves.

Zappos is an online shoes retailer that started its business in the year 1999. Later on the company had expanded its business to include the beauty products, clothing and even the housewares within its leading e-commerce website. This case emphasizes on the customer service department of Zappos Company and initially the business focused only on the drop ship method. Later on the company also increased the variety of the products. The company had also created a bricks and mortar storefront to expand the business and increase the sales of the business.

The main advantage of the vertical integration is the increased control. For instance, Wal-Mart with large market share is attractive to supplier. Though

A store like Nordstrom has built a successful model on availability of knowledgeable salespeople, and other luxury or near-luxury retailers would be advised to pay attention. But a mass retailer like Target is not dependent on “high touch” customer service; rather, the most important things it can do to satisfy its shoppers are to ensure that goods are on the shelf and the checkout process is efficient. As more consumers migrate to

Second, in fulfillment, we can also see speed in responding to demand. For example, the replenishment, as well as production will be optimized according to supply and demand as quickly as possible. Besides, the fulfillment will commonly completed in one or two days, clothes flowed quickly, and without stopping, from factories to DCs to stores, where they were immediately put on the sales floor. Third, in design and manufacturing, we can find how Zara respond quickly to demand. Zara brought out new items continuously throughout the year, including both changes to existing garments and entirely new creations. The network of production had made design from conception through production and into the DC in as little as three weeks. Besides, Zara did not have to predict what would be selling six months, or even one month, in the future; it could continuously sense what customers wanted to buy and respond “on the fly.” All these operations reflect the speed-chasing and target-oriented nature of Zara business.

Zappos has made the online shopping experience very safe and easy. The marketing strategy used by Zappos has to be one of the best one in any market. Zappos took was given to them and turn the focus to the customer experience. The entire idea was to make the shopping experience better so that customers would return. The promotion of a fun and hip culture for the employees is a big reason this strategy is working. Employees are in good moods and so this passes on the customer. The Zappos atmosphere is fun. There are no sales goals for employee because Zappos wants the relationship between the employee and customer to be genuine.

The press and our customers have noticed the organizations excellent customer service. A article states, “24/7 Customer, a leading Customer Lifecycle Management (CLM) solution provider helped Overstock.com to the # 2 slot in Customer Service among all U.S. retailers. Overstock.com has been rewarded for its exemplary customer service and continued level of excellence. 24/7 Customer has been providing online and chat support to Overstock.com for over four years announced today that it has once again earned the #2 spot in customer service rankings among all U.S. retailers, according to rankings published in the 2010” (Business, 2010). In addition to excellent customer service, another way that they attract customers is by offering a shipping price of $2.95 per order no matter what is ordered. Another main aspect of marketing is search engine marketing. “Over the last several years, Overstock has been competing for traffic with search sites such as Google, forcing Overstock to spend large sums on search engine marketing” (Stock, 2010). They have continued to invest money on search engine marketing to ensure that new customers are able to find them.

The threat of new entrants into the online shoe/apparel market is relatively small due to the fact that Zappos is such an established brand and has specialized their business model. It would be far too expensive for a new company to copy the characteristics of Zappos including their next day delivery and large overhead. The fact that Zappos was losing money initially illustrates this difficulty. Another issue that would create a high barrier to entry is Zappos commitment to the consumer through overnight shipping. Zappos stated that the overnight shipping caused them to leave their warehouses open for the entire day. Any other company would

The Spanish retail chain Zara has unique supply chain management practices that enable it to gain a competitive advantage over other fashion retailers in the industry. Zara’s rapid response time enables the firm to quickly respond to changing fashions while deliberately under producing products. This strategy, which is supported by competencies in logistic management, design and information systems, allows the company to maintain less inventory and higher profit margins and is a key factor to Zara’s success. The firm should continue to add value by seeking new opportunities to expand in the retail market and maintain their sustainable growth.

1. One of the requirements to successfully apply as a Zappos employee is to be happy. The company hires only happy people, after which the company expends significant effort to maintain this sense of happiness. The philosophy behind this is that customers will be happy when being served by happy employees. This is why the company strives to create a company culture that inspires its employees and promotes their sense of well-being.

Zappos started out by selling shoes online to become the world’s largest online retailer of shoes. Subsequently, in their quest to boost sales, they moved beyond footwear to become an E-tailer that sells ‘anything and everything’.

An additional method Zara utilizes to ensure the right product is produced is to constantly monitoring the sells at every store in real time through the use of computers. Sells managers are the individuals that play out this strategy. When the clothing sells well or does not sell well, they can quickly let the designers know to swiftly create new designs (“Case 3-4. Continued Growth for Zara and Inditex”, 2013). However, the competition is changing their strategies in an attempt to successfully compete with Zara. The methods that Zara has implemented to ensure fast fashion is truly fast has pressured the competition into reducing their lead times on stocking their stores (Hayes & Jones, 2006).

In 2011, the company also launched an educational website for SMEs to seek Zappos’ executives for advice with monthly fees. Lastly, Zappos could also expand and diversify away from retail, to businesses such as hospitality or banking, where customer service is dominant.

Another way Zara controls its inventory is through "the constant flow of updated migrates the so called bullwhip effect". (Anon 1, 2006) The bullwhip affect is a technique used where the surge in the demand up supply chain and the inventory locations adjusts to the demand increase. However, traditionally retailers change orders by 20 percent once the season has started, whereas Zara lets the distributors adjust 40 to 50 percent helping it avoid the costly overproduction. Traditionally companies invest vast amount of capital into forecasting, but not Zara. The store managers at Zara are able to reflect and notice the trends which are put into a PDA that are linked to the head quarters of Zara. Alongside the QR and the use of technology Zara are able to motion the products within 15 days and delivering them to the stores.

“Wal-Mart grew its training and development program the way it grew the corporation: from store level up.” (Speizer, P. 2) Wal-Mart is such a large organization that their training and development needs to be top notch and have great influence on their staff. An author of Wal-Mart and a worker said, “Their training and development is making a significant commitment and it will be a radar screen for all other organizations.” The company is using a combination of outside vendors and systems it has created on its own in the overhaul of training and development. (Speizer, P. 2) Their new method of training was brought to them by Nike. The process goes something like this, “Each segment is three to seven minutes long and gives the associates the basic knowledge they need about various products. As new products are introduced each season, the training is updated and Nike customized the program for each retailer. Associates are then quizzed at the end of the training and asked for feedback, which gets sent back to managers and they are able to adjust things if needed.” (Marquez, P. 2) This process is an outstanding format; internet is the new way of communicating and training. This type of training is called e-training and is definitely shown to be efficient. Other companies such as Cingular and Nike have taken part in this