SWOT analysis identifies the internal and external factors that impact the brand, such as customer service, strong branding and supply chain disruptions.
Are you a shoe fanatic? If yes, then you must be aware of one of the most famous online shoe retailers, Zappos. No doubt, Zappos is well-known for selling quality shoes. However, over the years, Zappos has diversified its operations and started selling clothes and other accessories, such as handbags.
Although many footwear brands have kept emerging over the years, no brand could ever replace Zappos because of its separate online customer base since it is one of the most significant online footwear and clothing brands.
Zappos has always had a special spot in the hearts of people who prefer to shop online. However, after the pandemic, more people have realised the benefits of shopping online from the Zappos store.
You must be thinking, why are we discussing Zappos? We are discussing Zappos because today, we will conduct a Zappos SWOT analysis to see what internal and external factors impact the brand.
However, before doing that, let's just briefly discuss Zappos' history. Zappos is an online retailer of shoes and clothes, which was founded in 1999 by Nick Swinmurn. The company initially focused on selling shoes online. Still, it eventually expanded into other product categories, such as clothing, accessories, and home goods.
In 2000, Zappos raised $6 million in funding from Venture Frogs, a venture capital firm founded by Tony Hsieh and Alfred Lin. Hsieh and Lin later joined Zappos as CEO and COO, respectively, and helped to grow the company into one of the most successful online retailers in the world.
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Under Hsieh's leadership, Zappos became known for its unique company culture, which emphasized customer service, employee happiness, and a commitment to delivering "wow" customer experiences. In 2009, the company was acquired by Amazon for $1.2 billion, but it continued to operate independently as a subsidiary of Amazon.
Today, Zappos remains a leading online retailer known for its wide selection of shoes and clothing, free shipping and returns, and customer-centric approach to business.
While the company has faced challenges and changes over the years, it continues to be a pioneer in the e-commerce industry and a beloved brand among customers. Currently, Zappos takes the majority of orders from the US.
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The brand has a workforce of 1,677 employees. Despite having significant sales, Zappos doesn't have a large workforce since it is an online store. It is estimated that Zappos generate $612.4 million per year.
Now that we have discussed Zappos' history and current operations let's proceed further and conduct Zappos SWOT analysis. First, however, before proceeding any further, let's discuss what SWOT analysis is.
SWOT analysis is a business tool used to analyse the internal and external factors that affect an organization's operations. A SWOT template highlights an organization's strengths, weaknesses, opportunities, and threats.
In this SWOT analysis, we will look at what internal and external factors impact the operations of Zappos. Let's proceed further and conduct the SWOT analysis of Zappos.
Strengths of Zappos
Like any other organization, Zappos possesses several strengths that provide a competitive edge to the brand in the market. In this section, we will analyze some of Zappos' strengths.
Exceptional Customer Service
Zappos has built a reputation for exceptional customer service, a key company strength. Zappos' customer service team is available 24/7 to assist customers with any questions, concerns, or issues.
Customers can contact Zappos anytime, day or night, and expect a quick and helpful response. One of the ways that Zappos provides exceptional customer service is by empowering its customer service representatives to go above and beyond to satisfy customers.
For example, suppose a customer orders shoes that don't fit. In that case, Zappos may offer to send a replacement pair in a different size free of charge. This kind of personalized service helps to build customer loyalty and create positive word-of-mouth for the company.
Extensive Product Range
Another key strength of Zappos is its extensive product range. Zappos offers a wide variety of products from a range of top brands, including shoes, clothing, accessories, and more.
This variety of products enables Zappos to appeal to a broad range of customers, from fashion-forward shoppers to those looking for practical and comfortable footwear.
One of the advantages of Zappos' extensive product range is that customers can find everything they need in one place. For example, a customer looking for a new pair of shoes may also be interested in purchasing a matching handbag or a piece of jewelry.
Zappos' product range makes it easy for customers to find everything they need in one convenient online store. Zappos' product range also includes diverse styles and sizes to accommodate a wide range of customer preferences.
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Customers can find shoes and clothing in various sizes, including extended sizes, which may be difficult to find in other stores.
Strong Brand Image
Zappos has established a strong brand image as a customer-centric company that offers high-quality products at competitive prices. This is a key strength for the company, as it helps to differentiate Zappos from its competitors and build customer loyalty.
Zappos' brand image is built around providing exceptional customer service and a seamless shopping experience. The company has a reputation for going above and beyond to ensure customer satisfaction, with a 365-day return policy and free shipping on all orders.
Weaknesses of Zappos
Now that we have discussed the strengths of Zappos, in this section, we will analyze the weaknesses of Zappos.
Limited Product Differentiation
One potential weakness of Zappos is limited product differentiation. While the company offers a wide range of products, many are similar to those offered by its competitors.
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This means that Zappos may struggle to differentiate its products and services from other online retailers, which could limit its ability to attract new customers and retain existing ones.
The online retail industry is highly competitive, with many players offering similar products at prices.
This means that Zappos must find ways to differentiate itself to stand out from the crowd. While the company has built a strong brand image around exceptional customer service and high-quality products, it may need to do more to differentiate its offerings.
High Shipping Costs
Another weakness of Zappos is the high shipping costs associated with fulfilling customer orders. Although the company offers free shipping on all orders, it may still incur significant shipping costs due to the high volume of orders it receives.
These costs could pressure Zappos' profit margins, ultimately impacting the company's financial performance. Shipping costs are a significant expense for online retailers, especially those offering customers free shipping.
While free shipping can effectively attract customers and increase sales, it can also be expensive for the retailer. This is especially true for companies like Zappos that offer a wide range of products and operate on a large scale.
Reliance On Online Sales
Zappos is highly reliant on online sales. However, as an online-only retailer, the company is vulnerable to changes in consumer behavior or technological disruptions that could affect online shopping.
For example, if there is a significant shift towards in-person shopping, Zappos could lose customers and market share. Another potential issue is that some customers may prefer to shop in physical stores.
While Zappos' extensive product range and exceptional customer service may attract many customers, some may prefer to see and try on products in person before purchasing.