Mastering the online fashion retailing: Zappos’ success story
The battles among online fashion retailers are fierce. Zappos is a winner. The successful story of Zappos couldn’t be accomplished without implementing useful strategies.
By utilizing supply chain management (SCM), customer relationship management (CRM) and enterprise resource planning (ERP), Zappos maintains good internal and external relationships, and remains profitable and competitive in the market. Today, let’s take a look at how Zappos mastered SCM towards its profitability.
SCM is the management of information flows between and among activities in a supply chain to maximize total supply chain effectiveness and corporate profitability, according to Paige Baltzan’s Business Driven Information Systems. It is recognized as the integration of key business processes across the supply chain, which can operate and optimize the supply chain. The SCM can benefit Zappos in dealing with the upstream suppliers, its own production processes, and the downstream customers.
As the pause of global supply chains due to the Covid-19 pandemic force thousands of companies to shut assembly and manufacturing plants around the world, the usage of SCM could help the operation of supply chains and significantly reduce the negative effects in manufacturing, transportation, and logistics of the fashion industry.
First, one of the biggest parts of Zappos’s SCM system is the connection and communication with the suppliers, in which Zappos provides detailed information about it’s products to all the suppliers, includes items sold, times sold, price, customers and others.
Through this information, the suppliers can know the demand for their products that enable them to make decisions about their productions. Perhaps the good SCM with suppliers is the reason Zappos can maintain more than 500 brands loyal suppliers.
Second, SCM increases the efficiency and profitability of Zappo’s production processes. For example, through the SCM system, Zappos can reduce the manufacturing cost by reducing the redundant inventories.
In addition, SCM helps Zappos provide its customers with fast delivery, easy communication, and good service, which encourage the customers to maintain their business with Zappos.