Updated: May 27, 2019
Last week I went to Zalando on a field trip arranged together with KEA.dk/ehandel. Since my visit I have been trying to understand the company better. It is always easy – from the outside – to say “well, with all the money in the world it is easy” or “they don’t make money and maybe they never will!”.
Zalando is the first company in the world to reach a turnover of 1 billion euro’s in 4 years and they keep the pace, expecting to double again in 2013. They keep attracting new investors and it tells me that – all though their bottom line was red in 2012 – they are delivering results in their mature markets.
What are they doing right and can we learn from them in web shops of a more “normal” size?
Lot's of people helps!
The employees of Zalando are very skilled and very dedicated and more important there is a lot of them.
The headline of this blog post was “they do as we plan to do”. This means that we all plan to do things the right way, but we are also extremely busy and often we have to move on to something else before the task is handled perfect or have to choose between to equally important tasks.
At Zalando they also move forward with a high pace, but they seems to leave two people behind every time to finalise the task and monitor the results. This is possible with lots of ressources, but it gives them both knowledge and strong results.
Being a smaller web shops without that many people available I think there are still several things to learn.
Zalando is very good at monitoring results. They don’t invest time in things they don’t plan to monitor and evaluate. If you do the same you might not be able to do as much, but you will get smarter while doing it and increase you rate of successes.
They hire students and trainees at low cost and use them as assistants to their specialists. In this way the specialist has a “right hand” to help and the “right hand” are getting trained while working.
The P’s (Prior planning prevents piss poor performance)
They have a clear strategy when they go into a new country and it prevents them from wasting money and getting off track.
They localise in order to meet the expectations of the local customers
They monitor that they actually succeeded localising before they move forward
They increase media pressure to accelerate new customer acquisition
They work intensively with CRM (look in your inbox and you will see) in order to optimise your buying frequence and average order
They monitor local competitors and evaluate their new initiatives
No matter the size of a company, planning is a good idea and I am sure everybody will agree. Create your own plan, add important milestones to make sure you don’t get side tracked and be ready to change it when the world changes.
Maybe you shouldn’t compete “head to head” with Zalando?
All though you can copy some of the things Zalando do, it might not be a good idea to compete head to head with them. It is an mindblowing “machine”.
Our advice to web shops in this competitive environment (because there are other players than Zalando and they are also doing well) is to work with their own strategy and find a position where their edge are valuable and there is a valuable group of potential customers.
Maybe you should change your home market to the Nordic countries (see blog post about this subject here), maybe you should narrow your product offering to fewer brands/product lines and deeper assortment, maybe offering financing of the products should be your edge.
There are many options and this is of course a difficult discussion to take during a busy day, but it is important.
MakesYouLocal would love to give input and adding insights from other countries to your considerations. Don’t hesitate to ask.
Call Max Riis Christensen direct +45 3017 3950.