The wedding planning industry is well known for being incredibly expensive and difficult to navigate. Time, energy, and money allocated to celebrating nuptials has risen over the years. In 2019, that number hit $33,900 across the U.S., while couples tend to budget for $10,000 less than their actual amount spent . While the market itself is over $55bn, the fragmented industry has no major players with a market share greater than 5% . There is an incredible variety of players in the market that the couple have to seek out and understand well enough to write out the big checks. For example, communicating with venues, caterers, photographers and videographers are only the start of what gets previously excited couples a headache before they’re able to get their vows written down.
In the attempt to ease the wedding woes for planners worldwide, Shan-Lyn Ma and Nobu Nakaguchi, launched the Zola website in 2013. While the founders began with a mission to simplify wedding registries, Zola has grown to be an all-in-one planner, marketplace, and advisor. They saw a need for a platform that includes all aspects of the wedding journey.
Starting with the cornerstone of the Zola platform, the gift registry is incredibly robust. The registry allows users to connect their registries from other places (such as Amazon and Crate & Barrel) so that guests see one collective page of potential gifts. Zola has over 600 brands that they partner with to offer over 70,000 products on the online gift registry .
Moreover, Zola understands that the millennial generation is more interested in experiences when compared to their desire to be given traditional wedding gifts (e.g. blenders, and Tupperware). The offerings to have gift cards and honeymoon funds plays a crucial part in maintaining this customer type.
Social Media groups create important network effects. For example, the Facebook Zola Community, a private group where wedding focused members discuss tips/tricks, has over 13,000 members.
Invites + Paper
In keeping with traditional wedding planning, Zola offers paper products such as invitations, save-the-dates, and even “Change-the-Dates” (a type of notification that became popular during the COVID pandemic). This is one of the first categories where a user will actually pay Zola, excluding the “Change-the-dates” that Zola offered free to brides who were some of the first impacted by COVID rescheduling requirements.
A free website is offered to anyone who creates an account, a major advantage to wedding planners keen on affordable solutions for a temporary web page. The web page is made user-friendly by offering templates to couples who can simply add in their photos and change some wording. For an example, see this bloggers site here: https://www.zola.com/wedding/shekeylaandwilliam.
Guest List Management
For anyone that has planned a sizeable wedding, it is known how much difficult it can be to organize, maintain, and update guest information. From picking who makes it to the guest list, finding the proper mailing addresses, and getting labels completed, this is a tedious process. Zola allows users to not only store guest information in a user-friendly interface, it also allows customers to send automatic reminders to guests, and even labels envelopes automatically (if you buy the cards from Zola). Guest list management is a free service and the only aspect a user pays for would be the option to have envelopes labeled with guest names and addresses.
Zola makes personalized recommendations for vendors based on the couple’s desired wedding characteristics (style, budget, location, guest count, etc.). Listing as a vendor on Zola is free and the company has vowed to keep it free. The vendor part of the platform has grown slowly as it must be targeted to particular areas at a time. See excerpt below :
- Boutique Shop
- Photo Albums
In 2020, the estimated annual revenue for the company has reached $120 million and is valued at over $600 million . While the paper products are growing in popularity, the registry remains the most important revenue generator as Zola takes a cut of all sales made through its site (approximately 20%).
While Zola prides itself on becoming a one-stop-shop for wedding purposes, the captured value does not directly relate to the value provided. Some aspects of what Zola provides simply aids the network effects by making sure customers do not feel the need to seek an alternate service, even if Zola makes no money from that particular use. The free services are used to funnel customers to their online store.
Two areas that Zola intentionally avoids value capture is with the zero ads policy and zero membership costs. While this could be considered as missed value capture, the approaches intend to build on user happiness with the platform by making users feel they are not being sold to at all times.
The Zola platform is divided into scalable and non-scalable capabilities. On the scalable end, we have the products such as registry, website, and guest list management. The non-scalable side includes the personalization of vendor recommendations and one-to-one advisement. Fortunately, Zola’s growth of the scalable side can be independent of the non-scalable personalization.
It can be argued that sustainability is directly related to the scalable features of the Zola Platform. The more scalable the feature, the least sustainable it might be without strong network effects playing in their favor.
Network effects are strong from the free publicity when people share their Zola websites and invites since the logos are always on display. Unfortunately, the customers do not last long in the wedding industry. Often, they are obsessed with their weddings typically for a period of six months to two years. This means that there is a heightened need for the network effects of using Zola to be passed along to future fiancés before the current engaged pair are done with the topic. If Zola can get users to promote their brand (whether knowingly or not), they can benefit greatly from network advertisements.
While Zola may be the first to make a platform as inclusive of wedding aspects, they should keep in mind the ease of which their platform can be copied. Given the short-term usage of the site (engaged to newlywed stage in life), there needs to be a greater emphasis on utilizing the short-term network effects and creating a defense strategy for the low and non-existing switching costs for the platform.