Zalando has its sights firmly set on becoming the leading fashion destination for Europe, which is why the German e-tail is focusing on offering a new array of services, namely B2B. During Zalando's press day, PlayDay in Berlin, Germany, the online giant announced it was sent to roll out its new service, Zalando Fulfillment Solutions.
"We want to expand the business model, rather than the business itself," said co-founder Rubin Ritter at Zalando Fashion Hub in Berlin. "Our goal is to become the leading fashion destination in Europe, which is why we are strengthing our infrastructure." The new service is set to offer fashion brands access to Zalando's existing logistics infrastructure and sees the online giant take over the brand's order fulfillments logistics.
"We want to expand the business model, rather than the business itself"
Zalando's fulfillment solutions see the company taking over the order fulfillment for partners in the partner program from inbound to return, and will offer simple and individual solutions catered to each partner's needs. This new service is set to complement digital services Zalando already offers, such as its Brand Solutions and Media Solutions.
"We have expanded a lot, from home to abroad, to offering more categories and now business to business. We will use our platform for other brands, including media services. We want to become the operating system for the fashion industry," added David Schneider, co-founder and board member at Zalando.
Zalando rolls out Fulfillment Services
At the moment 5 brand partners are currently using the Zalando Fulfillment Solutions, including Bestseller, ELvi, Evita, Motion Fashion, and Surf4shoes. Zalando's Fulfillment service is now available in all 11 European markets where the partner program is live and aims to help partners improve customer satisfaction and to scale their business internationally, without them having to worry about the increasing service demand and corresponding logistics complexity.
"The Zalando platform is an operating system for the fashion world, with multiple ways of integrating all sorts of fashion contributors and stakeholders, catering to their specific needs. It offers not only digital services such as analytics or advertising but from now on also fulfillment solutions and thus, becomes the business strategy for brand and retail partners," explained Jan Bartels, VP Logistics Product at Zalando.
"Zalando has set industry-wide delivery standards and keeps developing innovation for the last mile. Moreover, within the last six years, we built up a strong logistics network and gained deep logistics expertise. All of that is now accessible for external partners," concluded Bartels. In addition to launching its new service, Zalando also announced that H&M brand Weekday and Nike had joined its partner program.
Weekday, Nike & Tommy Hilfiger join Zalando Platform Services
The new partnership sees Weekday and Nike offer a curated selection of their collection on Zalando. Weekday is set to offer its collections on the Zalando Fashion Store, a move which follows on from Zalando's latest collaboration with vertical fashion player Inditex. "We are very happy to continue our digital expansion with our new partnership with Zalando and we believe we will be a great compliment to their assortment," said Weekday in a statement.
Nike is set to sell its own e-commerce stock to Zalando customers without any intermediary party by integrating its items directly to the Zalando catalog. Zalando's partner program currently counts over 170 brands, including Adidas, Mango, Hallhuber and Superdry. "This changes Zalando into a shopping mall, which also includes an H&M store," said David Schröder, Senior Vice President of Operations at Zalando, who underlined Zalando's fashion focus as a core strength as it goes head to head with US giant Amazon.
"Our assortment is a key element of our business and one of the main reasons why consumers perceive Zalando as a top fashion destination," said Delphine Mousseau, VP Markets at Zalando. "We believe they expect the same choice and availability of Fashion products as they experience with other products on other platforms like Spotify or Netflix. The initiatives that we have announced at Playday, are exemplary for how offline and online commerce will merge closer together in the future."
"Our assortment is a key element of our business"
Zalando also announced another key step taken in its integrated commerce approach, which sees Zalando connecting local stationary stocks from four Tommy Hilfiger stores in Berlin to its platform. The store's assortment is digitized and offered online to Zalando's customers, who benefit from additional services, like same-day delivery. Delivery, in particular, remains a central focus for Zalando, as the e-commerce company dreams of offering 20 minutes, or 30-minute delivery options in the future. Co-founder Robert Gentz highlights his own experiences with Facebook and Über, adding the fashion industry should follow in suit.
"They know what you want even better than your own friends do. Such experiences must also be available in the fashion industry," he said during Zalando's PlayDay. Returns is another major issue Zalando is focusing on, as nearly half of all orders are sent back. 30 to 40 percent of these returns are down to incorrect sizing. But seeing as Zalando offers free returns, this is a big expense for the online giant. "There must be a seamless return policy," said Ritter. Zalando is currently working with its partners to set up an improved return strategy and has created a dedicated testing team to help solve its issues with fit.
Photos: Courtesy of Zalando and FashionUnited NL