Zola is an online wedding retailer, planner, and registry. It enables couples to register for experiences, gifts, and cash funds, founded in New York City by Shan-Lyn Ma and Nobu Nakaguchi in 2013. Zola generates revenue from the purchases in much the same way as any online retailer. For example, when a wedding guest purchases an experience such as a wine tour, Zola takes 20% of the total purchase price. This percentage doubles to 40% for physical product purchases.
Aspect
Description
Overview
Zola operates as an online wedding planning and registry platform that offers a range of services to couples planning their weddings. The company’s business model is built around simplifying and modernizing the wedding planning process, providing a one-stop destination for everything from creating wedding websites to managing registries and guest lists.
Wedding Planning Tools
Zola provides a suite of wedding planning tools and features, including wedding websites, guest lists, RSVP tracking, registry management, and vendor search. Couples can use these tools to streamline the wedding planning process and ensure all aspects of their big day are organized and managed efficiently.
Wedding Vendor Marketplace
Zola offers a marketplace of wedding vendors and services, allowing couples to discover and connect with photographers, florists, caterers, and other wedding professionals. This marketplace provides a convenient way for couples to find and book vendors who align with their preferences and budget.
Registry Services
Zola’s registry services allow couples to create wedding registries featuring products, experiences, and cash funds. Zola partners with various brands and vendors to offer a wide range of registry items, from kitchen appliances to honeymoon funds. Couples can personalize their registries and manage gifts easily through the platform.
Guest Experience
Zola enhances the guest experience by offering online RSVPs, digital invitations, and a centralized platform for communicating with guests. This simplifies the process of managing guest lists, tracking RSVPs, and sharing important wedding-related information with attendees.
E-commerce and Sales
Zola generates revenue through e-commerce sales made on its platform. It earns commissions and fees from products and services sold through its registry and vendor marketplace. These commissions contribute to the company’s revenue stream, alongside advertising and partnership opportunities.
Customization and Personalization
Zola allows couples to customize their wedding websites and registries, tailoring them to reflect their unique style and preferences. This level of customization enhances the personalization of the wedding planning process, creating a more meaningful and memorable experience.
Mobile Applications
Zola offers mobile applications for iOS and Android devices, providing couples with the flexibility to plan and manage their weddings on the go. These apps allow users to access Zola’s tools and services conveniently from their smartphones and tablets.
Challenges and Competition
Zola faces challenges related to competition in the wedding planning industry, as it competes with traditional wedding planning services and other online platforms. Ensuring a seamless and user-friendly experience for both couples and vendors is vital to maintain its competitive edge. Additionally, marketing and attracting users are ongoing challenges.
Table of Contents
History of Zola
Zola is an online wedding retailer, planner, and registry. It enables couples to register for experiences, gifts, and cash funds.
The company was founded in New York City by Shan-Lyn Ma and Nobu Nakaguchi in 2013. When asked about the origins of Zola, Ma recounted attending multiple weddings in the same year and becoming frustrated at the outdated, inconvenient, and impersonal nature of wedding registries.
With a background in creating engaging eCommerce shopping experiences, Ma partnered with product designer Nobu Nakaguchi. The latter also lamented the cumbersome process of planning his wedding ten years earlier. The pair then partnered with Gilt Groupe founder Kevin Ryan to build a new company for modern weddings and their savvy guests.
Initially, Zola was a wedding registry service. After repeated requests from Zola users, the service expanded in 2017 to include Zola Weddings – a free service offering guest list management, RSVP tracking, and customizable checklists. A partnership with home décor retailer Crate & Barrel followed soon after, enabling registry gifts to be selected from over 3,500 branded products. In 2019, the first bricks-and-mortar store was opened in the Flatiron District of New York City.
Zola is first and foremost an eCommerce store. The company claims it carries over 100,000 gifts and experiences from more than 1,000 brands.
More importantly, the Zola app is designed to appeal to younger generations who want a seamless shopping experience. Products can be added to (or removed from) a registry with a simple swipe. If an item is out of stock, the app provides helpful alternative suggestions.
Zola generates revenue from the purchases in much the same way as any online retailer. When a wedding guest purchases an experience such as a wine tour, Zola takes 20% of the total purchase price. This percentage doubles to 40% for physical product purchases.
While these percentages are comparable to similar businesses, Zola can increase profit margins by avoiding the costs associated with warehousing inventory. Instead, the vast majority of items are shipped directly from the manufacturer or company providing the experience.
Cash requests
When engaged couples request cash gifts, Zola charges a 2.4% fee. This fee is the lowest of its kind when compared to the fees of similar wedding registry companies.
Couples can choose to pay this fee themselves or pass it on to their guests. In any case, Zola does not make a profit here because the fee covers the transaction fee charged by the credit card company.
Key takeaways
Zola is a North American wedding retailer that also offers registry and planning services. The company was created after co-founder Shan-Lyn Ma discovered buying wedding gifts online to be inconvenient, impersonal, and outdated.
Zola makes money by selling over 100,000 items and experiences in its eCommerce store. The company does not hold physical inventory, instead taking 20% of the total price of experiences and 40% for products.
Zola also charges a fee for processing cash gifts. Ostensibly, this offsets the transaction fee charged to Zola by the credit card provider.
A platform business model generates value by enabling interactions between people, groups, and users by leveraging network effects. Platform business models usually comprise two sides: supply and demand. Kicking off the interactions between those two sides is one of the crucial elements for a platform business model success.
A marketplace is a platform where buyers and sellers interact and transact. The platform acts as a marketplace that will generate revenues in fees from one or all the parties involved in the transaction. Usually, marketplaces can be classified in several ways, like those selling services vs. products or those connecting buyers and sellers at B2B, B2C, or C2C level. And those marketplaces connecting two core players, or more.
A network effect is a phenomenon in which as more people or users join a platform, the more the value of the service offered by the platform improves for those joining afterward.
In an asymmetric businessmodel, the organization doesn’t monetize the user directly, but it leverages the data users provide coupled with technology, thus have a key customer pay to sustain the core asset. For example, Google makes money by leveraging users’ data, combined with its algorithms sold to advertisers for visibility.
In an asymmetric businessmodel, the organization doesn’t monetize the user directly, but it leverages the data users provide coupled with technology, thus having a key customer pay to sustain the core asset. For example, Google makes money by leveraging users’ data, combined with its algorithms sold to advertisers for visibility. This is how attention merchants make monetize their business models.
The wholesale model is a selling model where wholesalers sell their products in bulk to a retailer at a discounted price. The retailer then on-sells the products to consumers at a higher price. In the wholesale model, a wholesaler sells products in bulk to retail outlets for onward sale. Occasionally, the wholesaler sells direct to the consumer, with supermarket giant Costco the most obvious example.
A retail business model follows a direct-to-consumer approach, also called B2C, where the company sells directly to final customers a processed/finished product. This implies a business model that is mostly local-based, it carries higher margins, but also higher costs and distribution risks.
A B2B2C is a particular kind of business model where a company, rather than accessing the consumer market directly, it does that via another business. Yet the final consumers will recognize the brand or the service provided by the B2B2C. The company offering the service might gain direct access to consumers over time.
The term “crowdsourcing” was first coined by Wired Magazine editor Jeff Howe in a 2006 article titled Rise of Crowdsourcing. Though the practice has existed in some form or another for centuries, it rose to prominence when eCommerce, social media, and smartphone culture began to emerge. Crowdsourcing is the act of obtaining knowledge, goods, services, or opinions from a group of people. These people submit information via social media, smartphone apps, or dedicated crowdsourcing platforms.
While the term has been coined by Andrew Lampitt, open-core is an evolution of open-source. Where a core part of the software/platform is offered for free, while on top of it are built premium features or add-ons, which get monetized by the corporation who developed the software/platform. An example of the GitLab open core model, where the hosted service is free and open, while the software is closed.
Open source is licensed and usually developed and maintained by a community of independent developers. While the freemium is developed in-house. Thus the freemium give the company that developed it, full control over its distribution. In an open-source model, the for-profit company has to distribute its premium version per its open-source licensing model.
The freemium – unless the whole organization is aligned around it – is a growth strategy rather than a businessmodel. A free service is provided to a majority of users, while a small percentage of those users convert into paying customers through the sales funnel. Free users will help spread the brand through word of mouth.
A freeterprise is a combination of free and enterprise where free professional accounts are driven into the funnel through the free product. As the opportunity is identified the company assigns the free account to a salesperson within the organization (inside sales or fields sales) to convert that into a B2B/enterprise account.
In a franchained businessmodel (a short-term chain, long-term franchise) model, the company deliberately launched its operations by keeping tight ownership on the main assets, while those are established, thus choosing a chain model. Once operations are running and established, the company divests its ownership and opts instead for a franchising model.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
