What Zalando has Planned for its Platform and for the UK

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Bloomberg reporting from Zalando’s “Playday” press event:

The German e-commerce player is trying to gain market share and boost profitability by building new systems that can make it easier for brands such as Adidas AG or Nike Inc. to sell through Zalando’s site. It’s also working on ways for its retail partners to fulfill orders right from their stores, managing director David Schneider said at an event at the company’s Berlin headquarters Friday. The efforts could help it reach 10 billion euros ($11.2 billion) in sales by early next decade.

“That’s probably their biggest competitive advantage, their relationship with the brands,” said Claire Huff, an analyst at RBC Capital Markets in London. If brands like Adidas handle the inventory themselves, leaving Zalando to just process the payments, “that’s less capital and higher margin” for Zalando. (…)

An alliance with Uber, which managing board member Rubin Ritter briefly mentioned on a call earlier this month, could make it easier for customers to return unwanted merchandise, Huff said. Zalando executives didn’t specifically address the possibility of any venture with Uber at Friday’s event, only saying that they’re testing new methods of express deliveries.

Vienna is the latest city Zalando is bringing free returns getting collected at home to. (The company is also running tests in Cologne and Berlin.) A collaboration with Uber, a service with significant inventory (fleet sizes) in European metropolitan areas, is a logical potential next step. Right now Zalando is working together with Liefery, a German startup.

Reuters reporting from the same event:

Delivering items ordered online directly from a retailer’s store, rather than from one of Zalando’s warehouses, would rapidly speed up dispatch times and increase the availability of stock.

Christoph Lange, vice president of Brand Solutions, said at an event at Zalando’s Berlin headquarters on Friday that the company had launched a pilot project to deliver directly from fashion store Bodycheck in the city’s Alexa shopping mall to customers the same day.

Using retailers’ own stocks could help reduce logistics costs in the long term. However, Jan Wilmking, a senior vice president at Zalando, said the concept was still in the early stages since European retailers have very fragmented stock systems at present.

In one-on-one interviews with executives at this event I had the chance to get a better insight into how exactly Zalando is looking at the company’s future as a platform provider. An article on this will come later this week.

Drapers on Zalando’s UK plans:

Tomasz Ebbig, country sales manager for UK and Poland, told Drapers Zalando sees the UK as the most developed ecommerce market in Europe and is looking to the UK for trends that will appear in its other territories a year or two later.

“Over the last few years we have been improving our customer service in the UK and gaining more insight into the market,” he said. “We’ve also introduced brands that we sold in other territories to the UK such as Miss Selfridge and Whistles which gives us credibility.

“Now we’re focusing on customer acquisition through performance marketing such as display advertising and search.”

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