Connected Retail was one of the biggest Zalando success stories last year. Over the course of 2020, the number of connected store partners selling fashion items to millions of Zalando customers online has more than quadrupled to more than 2.600. By joining the program, offline retailers - who lost all foot traffic due to lockdowns - were able to maintain cash flow and even grow their sales and customer base. First rolled out in 2018, Connected Retail is an integral part of Zalando’s platform strategy of becoming the Starting Point for Fashion.
As Europe's leading platform for fashion and lifestyle, Zalando strives to be part of the solution, especially in the event of a crisis affecting our industry and society at large. In response to the coronavirus pandemic, Zalando has been waiving all Connected Retail commissions for new and existing partners and switched to weekly instead of monthly payouts to help partners maintain a continuous cash flow.
Thanks to Connected Retail, many retailers did not have to send any employees into short term work. Instead, they turned their stores into warehouses from which they now ship their products directly to Zalando customers. Some of Germany’s most traditional retailers are now fulfilling up to 2.000 orders per day through the Connected Retail program. And there are more and more retailers onboarding to Connected Retail every day who continue to benefit significantly from the offer. However, the extremely high number of new partners joining Connected Retail due to the continued lockdown in Germany also creates challenges for our growing team and network of partners.
“Since the onset of the pandemic and the resulting store closures, the number of partners signing up for Connected Retail every week has more than quadrupled,” says Carsten Keller, Vice President Direct to Consumer and Managing Director of the Zalando Connected Retail GmbH. “This high demand for our product shows how valuable it is for our partners. But with skyrocketing sign-up rates, we, together with our technology and logistics partners, are facing challenges that are slowing down the onboarding process of store partners. Our growing teams are working tirelessly on resolving this issue.“
The process of onboarding new partners to the Connected Retail program involves third party providers alongside Zalando’s in-house teams, which adds complexity and interdependencies. Zalando works with logistics partners and Enterprise Resource Planning (ERP) system providers who set up the necessary software and infrastructure for our retail partners to connect their inventory to our platform. On average, this process takes 14 days. Due to the extraordinarily high demand, the process currently takes up to six weeks at peak times.
“We understand that the waiting period can be very frustrating for store owners now that lockdowns are even prolonged,” Carsten Keller says. “We are prioritizing this issue and work hard on speeding up the onboarding process as much as we can on our end, and support our logistics partners and ERP service providers wherever possible. We’d like to kindly ask all store owners that are affected by these longer onboarding times for a little more of their patience. We fully understand the situation and hope we can be part of their solution very soon.”
A large part of Connected Retail’s success is based on our strong relationships and collaboration with logistics partners. DHL and Zalando have worked together closely over the last years, onboarding over 2.600 partners to the program. To better meet the needs of new store partners signing up to the program, Zalando is now adding a second carrier to Connected Retail. Starting this week, Hermes will join the program as a second logistics powerhouse. With this step, Zalando is actively increasing capacities and flexibility in the onboarding of new partners to Connected Retail.