Do choose one of the ecommerce small companies that are growing through ecommerce.
Please answer the questions in the attachment.
The case study should be at least 1200 words.
Collect material form at least 4 different sources for the company.
Assessment criteria.
Type of company – interest of the case study
Clarity of written communication
Presentation of facts – challenges decisions
Argument in concussions and discussions
Zulily
Many companies have accepted technology as an effective platform for their business operations. They increase their customer reach and address physical limitations by marketing their products or services online. Companies in different sectors have grown their online presence to reach local and international customers. With online operations, businesses can reach their customers within the country or expand their operations globally. One such business is Zulily, which has a strong online presence in the United States. The company has a website and social media presence that helps them to reach a wide range of customers, primarily mothers seeking unique merchandise for their children. Zulily is one of the fastest-growing e-commerce businesses in the United States, making it an interesting case study for the current project.
Company Description
Zulily is a fast-growing e-commerce company based in Seattle, Washington. The company deals with diverse products, including clothing, toys, footwear, and home products. Mark Vadon and Darrell Cavens, Blue Nile executives, founded the company in 2009. The motivation behind the company was Vadon’s wife, who was pregnant and had challenges finding items that they did not even know that they needed but turned out to be necessary during pregnancy. The start-up went live on January 27, 2010, initially selling apparel for children. In November 2013, Zulily went public, generating $331 million in revenue from its 2.6 million active customers (González, 2014). Jeff Yurcisin is the current CEO and president since 2018, playing a key role in overseeing online retailers and their employees (Mehdi, 2018). Strong leadership is at the center of business success in the company that is among the fastest-growing e-commerce firms in the United States.
Zulily’s Challenges and Opportunities
The company faces numerous challenges in its operations. The COVID-19 pandemic is the greatest challenge for many companies in the physical and online environment due to its impact on economic performance. Negative changes in economic performance affect organizational performance, especially if it affects purchasing power and spending patterns. Another challenge affecting the business is the need to operate sustainably following criticism from environmentalists regarding its poor waste management practices. The second challenge that affects the company is the potential loss of efficiency due to poor inventory management practices. The shortage of inventory affects cash flow and profitability, threatening the future of the company. The shortage of cash and inadequate current assets potentially affects its liquidity position. Another challenge affecting the company is the inability to understand customer needs due to the lack of personal contact with consumers since the business is online. Thus, the company might lack an adequate understanding of potential improvement areas in its product/service mix. Poor customer service is a major threat that can cause negative reviews online and damage its reputation. Customers can help or harm the business through word of mouth, depending on the customer service. Rapid technological changes can also affect Zulily’s performance due to its dependence on digital platforms (Mehdi, 2018). The management should understand and mitigate the challenges to prevent negative outcomes.
Zulily can take advantage of various opportunities to improve its performance in the e-commerce sector. One of the opportunities is improved technology, including mobile apps that the business can use to improve its ability to reach more customers conveniently. Development in technology can improve product/service production and delivery processes. The company can operate competitively by reducing the cost of prediction, improving efficiency, and improving its marketing capabilities. Changes in customer needs and preferences, such as increased online buying due to the COVID-19 crisis, can be an opportunity for Zulily. During the crisis, many people have migrated to online shipping to maintain social distance. Pregnant women and those with young children also prefer to shop online to avoid unnecessary movement, creating an opportunity for Zulily. An increase in customers’ disposable income is another opportunity for the company because of increased sales revenue and profitability. The trend can allow the company to introduce high-end products to greater revenue (Mehdi, 2018). The development of new market segments and niches creates a chance for expansion locally and internationally. Besides, the openness of national boundaries and the internet allow the business to market its products beyond the United States. The management will improve performance in the long term by capitalizing on the opportunities.
Competition
Being an e-commerce company, Zulily faces intense competition from other similar companies. The primary competitors for the company include Amazon, The Honest Company, Gymboree, BabyCenter, and Giggle. Regardless of the competition, Zulily has improved over the years and even ranks highly in scores, such as Diversity Score on comparably, compared to its competitors. The company rates well compared to competitors in terms of other scores, such as CEO rank (3rd), eNPS Rank (3rd), Gender rank (3rd), diversity rank (2nd), product quality (1st), NPS Rank (4th), pricing rank (5th), and customer service (4th) (Zulily Competitors, 2021). The score indicates that regardless of its size in the e-commerce market, the company performs considerably better than many major competitors. The company also performs better than many rivals in terms of corporate culture. The chart below shows how the company rates compared to major competitors in terms of culture:
Key Turn around Points
The major turning point for Zulily occurred in its decision to use search engine marketing, a type of Internet marketing involving the promotion of websites. Considering the importance of its website in marketing its products, the change increased its visibility in search engine results. As a result, the company would reach more customers with information about their products. The turning point in 2015 was particularly important for the business as it included flash sales for clients who did not know which of the products to choose from the numerous merchandise. The company needed to market the flash-sale website, and SEM was the most effective approach to achieve the objective. As a result, the sales increased by 29% in the first quarter of 2015 (Parkhurst, 2015). The company reached more tech-savvy mothers looking for unique and trendy products for their babies and children. They include information about their products in the marketing process to ensure that potential clients see them while surfing through the Internet. The strategy has been the foundation for its success and competitiveness in the e-commerce market.
Figures Indicating the Success or Fail of the Company
Regardless of challenges in the environment, especially since the end of 2019, the company has revealed considerable resilience to improve its financial performance. Its performance for 2019 and 2020 indicates the company’s success in weathering challenges, such as the COVID-19 pandemic-related economic uncertainty. The performance indicates the company’s success in strategies, such as an extension of its reach across new platforms to reach more consumers. The company ended 2019 and 2020 with sustained topline growth, enabling it to return additional capital to shareholders. In 2020, the Total Qurate Retail revenue went up by 7% to $4.5 billion in the fourth quarter. In the full year, the revenue went up by 5% to $14.2 billion. Revenue, in constant currency, went up by 6% in the fourth quarter and 5% in the full year. The company performed the best in e-commerce revenue, which increased 12% to $2.9 billion in the fourth quarter and by 11% to $8.9 billion in the full year (Zulily, 2021). Information from the financial years 2019 and 2020 indicates that the e-commerce model has been highly effective.
Lessons Learned
Lessons from Zulily will help other businesses to overcome economic challenges and improve their performance in the long term. During the pandemic period, many businesses have failed or declined in performance because of measures to control the pandemic. However, companies that adopted e-commerce platforms and increased their online performance have remained productive and competitive. The impressive performance of Zulily during the pandemic supports the observation. Companies operating online have managed to stay in business because customers could still order and have goods delivered to their convenient location regardless of the need for social distancing. The business model will mark the future of retailers as they confront the current and post-pandemic challenges. Even those with physical stores should integrate e-commerce operations to expand their reach.
Question for Discussion
- Do you think that the e-commerce business model has anything to do with Zulily improvement in revenue during the COVID-19 pandemic?
References
Mehdi, K. (2018). Advanced Methodologies and Technologies in Digital Marketing and Entrepreneurship. IGI Global
González, Á. (February 21, 2014). “zulily: Hot site for moms hits a moment of truth | Business & Technology”. The Seattle Times.
Parkhurst, E. (August 28, 2015). “Behind the QVC deal: zulily leadership built decade-long relationship that led to $2.4B acquisition”. Puget Sound Business Journal.
Zulily Announces First Quarter 2020 Results. (2021). Business Wire
Zulily Competitors (2021). Retrieved from https://www.comparably.com/companies/zulily/competitors
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