Improving repurchase rate at Zulily Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Improving repurchase rate at Zulily Case Study Solution

Zulily’s core business strategy (target market, offering, financial model), growth strategy and operations model – are they appropriate for the company’s current situation?

No, Zulily's core business strategies, growth strategy, and operational model are not appropriate for the company's current situation. In order to compete in the market, Zulily should continue investing almost 60% on online advertising, using most effective display ads on social media and display networks that is its largest channel of customer acquisition, which is followed by search engine ads and television commercials, which would incur significant cost for the company, which would result in slowing the membership as well as slowing down the immediate activation rate.

By the end of Quarter one 2015, the growth in customers’ response had fallen by 35%, down from 54% the previous quarter which was a large amount. New customers were showing less response because it was hard to attract new customers or gain repetitive purchasing from new customers. New customers’ responses slowed down because initially the retention team engorged new customers to place another order by sending customers daily, personalized emails or push notifications with a call to action. After some time Zulily decreased the return for new customers for second or third purchase. Similarly,investingmore money on advertising and social media could also increase the cost for new customers as well as it would slow down the growth.

Due to above strategies, which were followed by Zulily, slowing down the growth of sales as well asdeclining customers’ retention which will directly affect the purchasing power of the customers, due to this a supervisory team set out to disclose what was affecting repurchase rates.

Zulily’s co-founder CEO, Darrell Cavens faced a major challenge in his business, a Seattle-based daily deals site that provided to mothers. The more he spent to attract new customers, the less he recollected them in the form of repeat purchases.

Question # 2

Your analysis of the current issues (slowing growth, fewer repeat purchases, increasing CPA, etc.)

Zulily’s co-founder CEO, Darrell Cavens faced a major challenge in his business, a Seattle-based daily deals site that provided to mothers. The more Zulily spent to attract new customers, the less he retained in the form of repetitive purchases. Old customers’ repetitive purchases were constant while new customers’ purchases were decreasing after some period of time. Cavens and his executive's team had just revealed this adverse issue. These issues were identified by:

Zulily re-counted declining sales growth because of the increase in cost and decreasing the performance of the older and new customers
Strong growth stoppage because of higher advertising cost (almost 60 of investment) on ads, social media, and e-commerce
This inconsistent growth created uncertainty among investors (lost trust from the company because of unpredictable growth and behavior of employees toward the company)
Cash flows were declining because if declining sales growth
Competition from other large multinational companies which directly impacted on the performance of the company like Wal-Mart, Amazon, and many others
Company launched more than 100 sales event per day (wide variety or overwhelmed products)
Less competitive price (offering fewer prices compare to other competitors) give disadvantage to the company
With huge changes in operational activities in 2014, the company had struggled a lot to meet the goals and objectives and also take higher shipment cost and consume time

Improving repurchase rate at Zulily Harvard Case Solution & Analysis

Question # 3

Recommendations on how to proceed:

Establish new goals and objectives which must highlight new terms and policies of the company
Reduce investment in advertising, ads or social media in order to reduce the cost and attract new customers and as well as built new environment for older customers
Increase online customer experience, or develop particular feedback system where customers feel free to provide information about their experience
Competition is the key factor for measuring the performance of any company. In thecase of Zulily’s performance, charge lesser price than its competitors, but incurring high cost on products.
As the company launched 100 events sales per day, which were in larger number, therefore,for increasing revenues and sales, Zulily should launch products according to the needs and demand of the customers
Training and development to the suppliers, vendors and as well as employees in order to give better challenge to competitors as well as to gain the customers’ trust................

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