Improving Repurchase Rates At Zulily Case Solution

2. Analysis of potential problems

Zulily's net sales declined considerably in 2014 and 2015, reaching only $307,000 in 2015, from a peak of $1200,000 in 2014. Though its active customers grew in numbers from 2014 to 2015, the net growth was minimal. The average order value saw only a marginal increase of 2% from 2014 to 2015, and the orders placed declined considerably from 2015 to 2015. Additionally, Zulily was unable to meet its targets as per the earning statement. Furthermore, Zulily's average delivery time was significantly more than its direct competitors, which contributed to the declining orders placed by customers (McAra & Teixeira, 2016). Zulily's market expenses increased to retain customers; however they did not prove fruitful in encouraging repeat purchases by customers. Due to having multiple vendors, and not keeping inventory to maintain its USP, Zulily was unable to ship orders quickly. Also, Zulily’s website manoeuvring required effort on the part of customers in terms of providing their email and subscribing even if it was to view the products. This contributed towards decreasing customers (ProActive Content, 2015).

3. The main problem

The main problem faced by Zulily was the lack of repeat purchases by customers, which were millennial moms. Despite offering a unique value proposition as well as offering products of other well-known brands at competitive prices, customers would not come back to Zulily for a repurchase. The sales and discounts offered by Zulily were difficult to maintain, and the delivery times were extensive due to lack of maintaining inventory and following a fulfilment model as well as multiple vendors being involved to complete a single order. Customers would prefer low-priced, high-quality merchandise from Zulily's competitors like Walmart, Amazon, eBay, etc.