1The American University in CairoManagementDepartmentMOIS 2101-Introduction to Information Systems/TechnologyDr. Dina SalahAssignment 1Due Date:20thof FebType: Individual AssignmentInstructions:Read the following case study and then answer the case study questionsZulily Case StudyOn November 15, 2013, zulily, a Seattle corporation, issued its initial stock (i.e., went public) at $22 a share. By the end of the day, the stock was trading at $38, and 4 months later it reached $62, nearly tripling its initial price. At $62, the holdings of the companys chairman, Mark Vadon totaled more than $2Billion. zulilysells to mothers: primarily childrens clothes and toys, but also womens clothes, accessories, and dcor items. The oldest and most traditional forms of retail. So what is the excitement? Cofounders Mark Vadon and Darrell Cavens found a way to harness information technology to provide an entertaining shopping experience to mothers, one that offers name-brand goods as well as uniqueand difficult-to-find off-brands and often sells them at substan-tial discounts. According to the zulilyprospectus, 45 percent of its sales occur over mobile devices, as mothers churn through the days specials while they sit in playgrounds, in cars waiting for kids at soccer practice, or anywhere else young mothers have a break long enough to shop on their mobile devices. The Zulily Business Model Zulilyconducts flash sales of childrens and womens clothing and other items of interest to women. Sales open at 6 AM Pacific time each day and last 72 hours. Customers find brand-name merchandise intermingled with hard-to-find boutique products. zulilyuses the term curated sale to mean the sale of items specifically selected and grouped by its shopping experts to be exciting to women. Because these curated sales provide interesting variety, women enjoy the thrill of discovery while shopping.zulilythus provides entertainment as well as a rewarding shopping experience. And those low prices, some as low as70 percent off retail, are available for only 72 hours. This approach definitely work and in 4 years zulilyincreased the number of its active customers by 3,121 percent while increasing revenue per active customer by 209 percent. That combination resulted in revenue growth from $18Millionto $1.2Billion; thats a 185 percent annual growth rate! 2How Zulily Did it?The sales process begins when zulilybuyers identify goods to be sold. Buyers negotiate with vendors to establish both wholesale and retail prices, terms, and maximum quantities by size. zulilythen obtains sample merchandise and, if necessary, photographs it in-house. It also writes ad copy to be displayed along with the photos during the sale. By taking photos when needed and writing its ownad copy, zulilyensures a consistent quality of presentation on its site. zulilyalso adds considerable value to smaller vendors who do not otherwise have access to such high-quality expertise. Zulily Performance Items are then grouped together into 3-day sales events. zulilyaccepts orders for items up to the maximum quantity negotiated with the vendor. At that point, the item (or a particular size of an item) is marked as no longer available, thus increasing pressure to buy remaining items now. After the event closes, zulily orders the items from the vendor, receives them, packages them, and then ships the items to customers. zulily thus maintains almost no inventory.Customers receive their items in zulilypackaging, thus reinforcing the zulily brand.zulilyis subject to errors and mistakes from vendors. If, for example, the vendor promises to ship 1,000 pairs of shoes of a particular size and zulily sells all 1,000 pairs, but later the ven-dor delivers only, 900 pairs in that size, some customers will be disappointed. And those customers will hold zulily, not the vendor, responsible for their disappointment. Use of Technology zulilysbusiness model would be infeasible without information systems. For one, it needs the Internet to reach customers,and it needs mobile technology to do so on phones and other mobile devices. Further, zulilybuyers use the Internet to find vendors and items to sell. But what else? In the prospectus for its initial public offering, zulilystated, Continual innovation through investment in technology is core to our business.It states that it developed a proprietary technology platform to manage the enormous spikes in Web processing demand that occur due to the nature of flash sales. Reflect on the challenges of such development: In 2010, zulilysplatform supported $18Millionin sales; 4 years later, it supported $1.2Billionin sales, a 66-fold increase in demand. Such growth would be impossible in a world without information systems. But theres more. In that same prospectus, zulilystated that it has developed extensive data collection and analytics capabilities that enable it to anticipate its customers shopping preferences and to tailor the customers shopping experiences accordingly. So, as with any good salesperson, what you see and how it is shown to you depend on what youve purchased in the past. That same data can also be analyzed to help buyers determine the items customers are most likely to purchase. 3Growth-Management Problems Such spectacular growthdoes not come without problems. According to its 2014 annual report, zulilyincreased its headcount from 329 at the end of 2011 to 2,907 at the end of 2014. Thats an 884 percent increase in zulilysworkforce in 3 years. That rate of growth is exceedingly difficult to manage, a fact the company recognized.To support continued growth, zulilyplan to effectively integrate, develop and motivate a large number of new employees, while maintaining our corporate culture. In particular, itintendsto continue tomake substantial investments to expand our merchandising and technology personnel.Unfortunately, zulilyis located just down the street from Amazon and Nordstrom and just across a lake from Microsoft. Finding (and retaining) those merchandising and technology personnel in Seattle will be difficult. In its annual report, zulilymentioned particularly the need to hire mid-level managers. Learning From Zulily zulilyis remarkable for its spectacular growth, but its even more remarkable because that growthoccurred in a very traditional market. Whats more basic than selling clothes to women? Who would think that the founder of a company in that market could turn his holdings into $1.7Billionin 5 years? Or that the company could increase its workforce by 884 percent in 3 years? In the final analysis, zulilysucceeded because its founders developed an innovative application of information systems technology. The technology zulilyuses is not groundbreaking. The creative genius was finding a way to apply that technology to a business opportunity and then to have the managerial skill to develop that idea into a thriving business. Without doubt, dozens of such opportunities lie in front of you. You just need to recognize and build on them. 4

Answer the Following Questions:

1.Go to zulily.comand register. Identify features of the site that make shopping entertaining and explain why those features entertain. Explain why this is important to the zulilybusiness model.

2.Go to Nordstrom.comand shop for childrens clothes. How does the zulilyshopping experience differ from that at Nordstrom? Briefly describe the advantages and disadvantages of each type of experience.

3.If you were a buyer for zulily, what data would you like to have about customer purchase habits?

4.If you were a buyer for zulily, what data would you like to have about past vendor performance?

5.In the general course of life, 2-year-old boys become 3-year-old boys, 4-year-old girls become 5-year-old girls, and so on. How can zulilyuse this not-so-remarkable phenomenon to customize a customers shopping experience? What data would you need to do this?