Zalando gives insights into the company’s strategy

Zalando platform

In its annual report Zalando gave some insights into the company’s (platform) strategy with its four pillars:

Right now the company is feeling its way towards implementing the concepts and models introduced in 2015. See logistics and same-day-delivery for example:

What were the major developments in Zalando’s logistics in 2015?

[DAVID SCHRÖDER, SVP OPERATIONS]: In logistics, we are currently focusing on the trend towards faster deliveries, easier returns and a greater variety of delivery and return options. The trend is not exactly new, but is set to have a big impact over the next few years.

[CHRISTOPH STARK, VP LOGISTICS]: Especially with regards to delivery speeds, quite a lot has already happened in 2015. One example is our test run for Same Day Delivery, which lets customers receive their goods on the day they order them.

Are there any other projects in the pipeline?

SCHRÖDER: Our pilot program for Instant Returns leads the way too. Our customers in Amsterdam and London were given the chance to have their returns picked up from a location of their choice within 60 minutes. Using test runs like this, we get a detailed picture of the feasibility of these kinds of innovations for returns.

STARK: At the same time, we analyze how faster delivery speeds affect our logistics network. One consequence is that we will be getting closer to our customers with our sites abroad, as well…

SCHRÖDER: … and that our logistics network is becoming increasingly international. (…)

SCHRÖDER: We are also looking to offer our services to third parties as part of the Zalando platform strategy. Which brings us to Smart Logistics. In each of our operational areas1, we will be working with strong partners much more than we have in the past. Centrally coordinating and managing this highly complex fashion network with our IT, and developing a toolbox which will benefit all of our platform partners, and thus ultimately our consumers – that’s our task right now.

On Zalando Media Solutions:

We put together a dedicated Zalando Media Solutions team to take care of this service area after the acquisition of Metrigo GmbH. With the acquisition of GmbH (Closing in January 2016), we further added to our expertise in target group marketing.

We also launched the website Here, brands can learn how to place their messages and campaigns on our platform most effectively, taking advantage of its wide reach.

On turning the store into a platform with brands running their own microstores:

Over the past few years, thanks to our technological insights, we have found new ways to offer our customers diverse fashion choices from top international brands and an amazing shopping experience. A milestone in our development was the opening of more than 1,000 individual brand shops as part of our fashion store: this is where our brand partners have been telling their story since 2015, interacting directly with their customers, and managing their own campaigns. Using Content Management Systems and statistical analysis, they have full control over their portfolio and enjoy detailed data-driven insights into the online shopping habits of their customers. Over the past year, top brands such as Adidas, GAP and Nike have signed up to this model and launched their own brand shops. The partner program also allows brands to sell their merchandise in our fashion store while processing the orders hemselves. The inventory control systems are linked up and Zalando customers can choose from an even broader range of products.

See also the accompanying slides to the Q4/15 earnings call. In it Zalando laid out an unsurprising multi-year-overview:

Zalando platform strategy multi-year

Zalando: strategic investments support multi-year strong growth corridor

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