Prof. Kagan’s first class was very enlightening – it was interesting to understand the structures applicable to the numerous internet companies that form an integral part of our daily life. One relevant company I would like to highlight is Zappos.
For those who are not familiar, Zappos is the largest US e-tailer of shoes, and is the perfect example of a company exploiting the long tail. As a dedicated customer of Zappos since 2002, I have numerous accounts of instances where styles and sizes unavailable elsewhere, have popped up on Zappos; and most importantly, at a lower price! Zappos has created a loyal following of repeat customers with their unique business and service model, growing into a $1BN company in less than a decade.(It has been acquired by Amazon as of 2009).
However, there is a contrarian view to their ability to sustain the long tail. Conjecture is that Zappos’ profit margins have eroded significantly, as it has changed its model from previously coordinating delivery between shoe-producer and end-customer, to now stocking merchandise in-house.
What lies ahead for Zappos and its like? Any thoughts?
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