Zappos.com:
Developing Supply Chain to Deliver WOW

Strategic Management of Operations
Prof. Saibal Ray

By: Jaycie Zhang
Xinqi Wang
Arturo Cabezudo
Maria Campos
Juan Carlos Neira
Executive Summary
Zappos.com is a privately held online retailer with an extensive product category mainly including apparel, footwear, handbags, and watches. Headquartered in Nevada, it primarily operates in the US with about 1,300 employees and revenues mounting to $635M in 2008. Thanks to its strength in offering an outstanding customer shopping experience and strong corporate cultures and values related to customer service, it was the largest online shoe retailer in 2008, with a positive growth outlook. However, in the face of possible economic
This will make Zappos delivery highly dependent on UPS.
Opportunities -
Rapid Growth of Online Shopping – Online purchasing has grown consistently year after year; the opportunity lies in capturing new online customers and retaining them.
Technology Innovation - In 2008, Zappos added more automation to its warehouse operations by installing a robotic system in which robots picked up shelves that contained the items to be picked, and brought the shelves to the workers. These new robots allow Zappos to ship a pair of shoes in as little as eight minutes. Technology advances will allow Zappos to increase the capacity and efficiency of its distribution centers, without having to build new centers.
Build Strategic Alliances with Complementary Retailers - Zappos could build synergies with similar-size online retailers which offer complementary products in an effort to broaden its customer base and target audience.
Threats -
Economic Downturn - Customers will become more price-conscious in difficult economic times, which will ultimately drive Zappos strategy in order to remain competitive in such scenario.
Competitive Rivalry - While Zappos is one of the pioneer players specialized in shoe-retailing, the trend is for established brick-and-mortar companies to start offering their products online, which may generate additional competitive pressures.
Possible Security Breach for Online Retailer - Zappos must address possible security breaches to its servers.
Problem