Platforms represent both the future of the digital world and the present. Today, we see in our customers’ behavior and in the wider e-commerce ecosystem that the shift to a platform-based model is a trend that will continue to grow. Through the Partner Program, we offer brands the opportunity to connect directly to millions of customers in 15 of our 17 European markets, who in turn benefit from increased assortment choice and the ability to shop multi-brand through a single destination with maximum convenience. This is why the Partner Program is the backbone of our platform strategy.
In a conversation with Belen Sienknecht, Head of Sales and Key Account Management Partner Program, we dive deeper into the past development and future ambitions of our Partner Program.
In the Zalando company strategy, we continue to set ambitious goals of 20 to 25 percent GMV growth. Where do you see this growth coming from?
Our Partner Program will play a significant role in driving growth. While we plan to double our wholesale business by 2023, an ambitious target on its own, our plan for the Partner Program is actually 14-fold growth. We believe that in the digital space, platform economics represent the future. Customers want to buy all the brands that are relevant to them via a single destination and across all categories as conveniently and affordably as possible. We see in our data that the average customer buys around 13 different brands per year and almost every second order is a multi-brand order. The Partner Program is key in providing the assortment, availability and convenience the customer of today demands. Equally, it aims to empower brands to be more in control, from merchandising to pricing.
Today, we have more than 290 partners with over 900 brands in the Partner Program, and our target is to break the thousand mark this year. In addition, we just hit the milestone of 100 brands using Zalando Fulfillment Solutions (ZFS). Are you satisfied with the current numbers?
It’s a great development; the Partner Program started out in 2014 as an innovative idea, and has now become a key pillar of the Zalando business. ZFS launched in 2017, so it’s a proud moment for us to have reached the 100 brands milestone so quickly. Together with our brand partners, we have been able to significantly improve and scale ZFS to now operate in all 12 non-custom markets in Europe. Looking to the future, we see even more room for innovation and growth.
Your position puts you in direct contact with a wide range of brand partners. If you look at success cases in the Partner Program, what would you say these brands are doing right? What can others learn from them?
We’ve collected some great success stories over the years. From global brands to local heroes, brand partners of every size have been able to either increase profitability or leverage overall business processes and cut costs. For example, the Greek young fashion brand Funky Buddha managed to optimize their logistics processes by using ZFS. A main premise all success stories share, is the openness to drive innovation, internationalization, and investments.
How is what we do in Partner Program different from other marketplaces?
We are a curated fashion platform; an environment that allows brands to not only sell their products, but also bring their stories to life with us. By utilizing Zalando Marketing Services, for example, partners can take an active role in driving visibility and pushing their products to their target customers, be it through creative or performance campaigns. We also want to protect our partners’ brand equity and so we don’t engage in price competition or interfere with pricing.
In scaling the Partner Program, is there a limit that you are setting yourself?
There are no technical or capacity limits for the Partner Program. This makes it even more important that customers are guided through the ever-increasing assortment on Zalando in an inspiring and personalized way.