35-45 billion Euros worth of excess Spring Summer 2020 stock. That is how much overstock McKinsey & Company estimates will be floating around in the industry due to the Coronavirus situation.
On Thursday, May 30, at 12:30 CET, Andreas Rödl, VP Category Mens, was joined by Zalando experts to dive into what the significant excess stock in the market means for the imminent future, what today’s bargain hunters care about and how Zalando can help you manage your stock position.
For those who missed it, you can watch a recording of the session below, and if you continue to scroll down, you will also find the key takeaways as well as a summary of the key themes that came up during the Q&A.
Words left unsaid
How does Zalando Lounge work?
- Customer-facing, Zalando Lounge is an exclusive members-only shopping club for fashion and lifestyle products.
- Sales campaigns run for 65 hours and stock quantities are limited, encouraging impulse buying on the customer side and enabling substantial sell-through in just a few hours on the partner-side.
- On the partner-side, Zalando Lounge works in a wholesale model, i.e. we buy your products and then sell these to customers through sales campaigns.
- To protect our partners’ brand equity, sale campaigns are accessible to shopping club members only and are not visible in any search engines. Likewise, email communication and app push notifications are only sent to members.
What do customers particularly like to shop on Zalando Lounge?
- Multiple factors play into the level of success a sales campaign will have. High brand awareness, for example, is a major plus given customers are primarily buying upon impulse. Sufficient levels of stock and size range are also required to support impulse-driven buying behavior.
- Category-wise, we see higher shares of Accessories and lifestyle-related products selling well on Zalando Lounge. Furthermore, Premium fashion has a huge pull and here it is particularly interesting for us to see where absolute and relative savings intersect to drive impulse buying. Given the current Coronavirus situation, home and casual everyday-wear are also performing well.
How do I successfully manage Zalando Lounge as a further channel?
- We see that there is a dedicated black price phase during the season that should be used for exactly this: selling newness at full price. Starting ideally with the Mid-Season Sale (MSS), however, partners should make a first risk stock assessment and kick off early clearance. Zalando Lounge enables partners to extend a given season, given the winning combination of offprice business model and its customers’ impulse buying behavior, allowing for current season sales well into the end of season sale phase.
- In terms of which stock to prioritize, it is less a question of product “age” (i.e. current season vs. old season), and more a combined matter of assortment mix, product seasonality, and discount. Ultimately, our ambition is to create exciting fashion moments for Lounge customers.
- The minimum stock level needed is specific to each campaign, and hence discussed on a case-by-case basis with each partner directly.
I am already live on the Zalando Fashion Store - are there any synergies I can leverage when partnering with Zalando Lounge?
- Zalando Lounge is open to all Zalando partners who are interested in running a sales campaign, whether you already work with us through wholesale, Partner Program, or are a Connected Retail partner.
- Since the beginning of 2020, Zalando Lounge is able to buy partners’ stock through a wholesale transaction when it is located in our warehouses via Zalando Fulfillment Solutions. Once such a transaction has been agreed on, stocks are transferred electronically without physical movement, thus saving logistics costs for that partner.
Who can join the Partner Program and what will it cost to internationalize?
- All brands and retailers are eligible to join the Partner Program, independent of whether you already work with Zalando via one of our other business models or not. You can read more about the Partner Program here.
- Besides the compensation see, we do not charge any additional costs for internationalisation. However, potential channel setup fees for integrators, VAT registration(s) (we require a valid VAT number for each country you want to sell in) and carrier setup costs need to be considered on your side.
Connected Retail - how do I connect my offline stores to the Zalando platform?
- The integration to Connected Retail is free and without any fixed fees. All you need is a computer with internet access and a contract with DHL for Germany and/or PostNL for the Netherlands. Zalando takes care of marketing, item entry, customer service, and payment processing.
- You decide which items you want to sell on Zalando and control pricing. You also have full control over the maximum number of orders you want to ship per day and set the minimum stock levels of the items you want to sell online.
- For items that are sold through Zalando and are not returned, we normally retain a commission on the gross sales price of the item. Returned sales are of course not charged. Besides the commission, you only pay the logistics expenses.
Sign me up!
Get in touch with our teams to kick start your partnership with Zalando Lounge, Partner Program and/or Connected Retail.
- We encourage all partners who are interested to reach out to our Zalando Lounge Supply team directly via firstname.lastname@example.org to look into joint opportunities.
- For brands and retailers currently not working with Zalando in any shape or form, please fill out our Brand Prospect form to get in touch with our Partner Program Sales team. Please note that given the high number of requests currently, it can take up to a week for us to get back to you - but we are on it and look forward to hearing from you!
- For current wholesale partners looking to join the Partner Program, please reach out to your respective Buying team to discuss the next steps.
- Read more about the unique proposition behind Connected Retail: click here for Germany or click here for the Netherlands (these are two markets in which this business model is currently available). Already know the deal? Get in touch with the Connected Retail Sales team directly at email@example.com
See you next time!
We will be pausing our Stronger Together webinar series this week, and instead, David Schneider, Founder and Co-CEO, and Boris Ewenstein, SVP Supply, will be taking your questions around how we are tackling the Coronavirus situation as a company, and what it means for our strategy, this Thursday, May 7, at 13:00 CET.
Invites were sent on Monday, May 4, so check your inbox for the details - we’re looking forward to having you join the conversation!
Please note that our digital events are exclusive to Zalando’s fashion, beauty, and lifestyle partners only. Interested in joining the platform? Check out our partnership models to understand how.