At Zalando, we work with over 3000 fashion, beauty and sports partners. With such a wide partner base, we see a huge amount of diversity in categories, history, target customers, geographies, company size, as well as in terms of absolute sales and growth rates on Zalando. Despite the accelerated customer demand on Zalando during the first wave of Coronavirus, we saw that the tide did not raise all boats equally.
This begs the question: what sets apart the partners who were able to really drive e-com success this year, despite challenging market conditions? The key for many of them was close collaboration.
5 Winning Moves
Working even more closely with our partners over the past year has given us deep insights into what sets apart truly successful partners from others. In essence, we observed five winning moves:
1. Prioritize digital – this is crucial in all areas of your business from management attention and planning to budgets.
2. Ensure stock flexibility – adapting to demand patterns was vital, especially as stores went into lockdown at various times across Europe.
3. Manage availability – digital stock keeping is key for success, but it can be difficult, particularly for categories with higher return rates. The strongest partners managed to ensure their assortment was always available for customers to shop.
4. Focus on customer experience – customer-centricity is more important now than ever as we rethink the ways in which we reach our customer base.
5. Invest in market share – while it may feel intuitive to act cautiously in times of crisis, we saw our strongest partners adopt a “the time is now” mentality in terms of investing in marketing to drive growth.
Listen to Florian Jodl, VP Partner Strategy at Zalando, as he shares in more detail some insights into the various partner types we work with at Zalando, and why the five points above mattered more this year to drive e-commerce success than ever before.
Florian Jodl, VP Partner Strategy, Zalando
Winners really prioritized digital in all aspects from management attention to budget planning, they had a quick shift to digital as we saw the lockdowns happening.”
But listing five things to focus on is easy. Actually making it happen in practice is the challenging part. While there is no blueprint to e-commerce success, or one-size-fits-all solution that we can lay out for you, listen in to the video below to hear from other partners about how they prioritized those winning moves in practice this year. Florian is joined by Tim Seelmann, Team Lead Key Account Management Partner Program, to walk through some best practice examples.
Tim Seelmann, Team Lead Key Account Management Partner Program, Zalando
We believe that the prioritization of digital, at least to an equal level as your offline business, is key to future growth.”
Engelhorn didn’t miss a beat in prioritizing digital
Faced with store closures, nationwide lockdown measures and higher business risk in the beginning of the year, Engelhorn, a traditional family-owned German retailer, acted fast. As online demand picked up and business continuity in the offline channels was unsafe, Engelhorn distributed the existing store stock to its online warehouse. Only through this move did the company manage to rethink the existing inventory distribution of all online channels and adapt to the situation.
The result? By adjusting the warehouse flow and ultimately the stock information in Tradebyte, stock levels provided to Zalando increased + 63%. A wider and deeper assortment showed an immediate positive impact on Zalando sales, which grew by +48%!
Mango ensured stock flexibility in order to shift supply quickly to meet demand
An early adopter of digital, Mango won 900K new digital customers, grew visits by 20% and sales by 50% in the first month of the lockdown. With many stores locked down, Mango was faced with the following challenge: Stock was spread out in different locations, including stores with low or no rotation due to the impact of Coronavirus, while demand in online channels grew into double digits. In the course of a couple of weeks, Mango was able to collect stock from different locations and fill up the points of sales with highest demand, including their own digital channels and Zalando. As a result, they increased their stock in Zalando Fulfillment Solutions by 85% within 6 weeks. The high demand on Zalando backed by sufficient availability both in depth and width, led to a sustainable increase in Net Merchandise Value by 60%.
WE Fashion leveraged Zalando'd expertise and tooling to manage availability
WE Fashion is one of the largest Dutch fashion companies and has a strong retail presence in Europe. As demand increased for their assortment on Zalando, WE Fashion had to quickly replenish availability of their stock and increase their overall merchandise shipment size to Zalando. The company managed to quickly adapt to the changing demands by:
1. Increasing their overall stock supply to Zalando.
2. Extensively analyzing their lead time flow for Zalando Fulfilment Services deliveries and identifying which parts of the shipment process consumed more time than expected.
3. Leveraging zDirect and collaborating with Zalando to obtain insights on seasonal items and increase availability on fast sellers.
As a result, stock supply to Zalando increased by 27%, sales increased by 75%, and the brand is growing by 300% YoY on Zalando
Learn more about Zalando Fulfillment Solutions in general here, and dive into how Zalando Fulfillment Solutions helped partners, including WE Fashion, during the first wave of the Coronavirus pandemic here.
Delivering a stellar customer experience with Massimo Dutti
Massimo Dutti has a strong focus on ensuring exceptional customer experience. However, the company recently started experiencing an impactful drop in their Net Promoter Score. Zalando’s Customer Experience Model revealed an increasing customer service contact rate. With the help of the Customer Satisfaction Operations Manager at Zalando, the company identified the underlying reason – customers raising long reimbursement times.
After a deep dive by Massimo Dutti and various Zalando teams, the root cause was identified and quickly resolved, resulting in higher sales by up to 25% in the following weeks, and proving again the importance of customer-centricity in e-com.
Mammut treated marketing as an investment in market share
Mammut, a Swiss outdoor brand, is a prime example of a company which took the opportunity during lockdown to make a decisive investment in market share. At times when other companies put the brakes on marketing expenditure, Mammut ran multiple campaigns via Zalando Marketing Services, focusing both on performance marketing and brand marketing. By acting decisively and treating marketing as an investment, Mamut grew their visibility and experienced more than 3x faster customer growth.
Learn more about Zalando Marketing Services in general here, and dive deeper into what we at Zalando and what VF Corporation learnt this year in terms of how to best connect with customers in these challenging times here.