By Christoph Lange
Every brand, whether selling online or in stationary stores or both, has a vision of being accessible and available to as many potential customers as possible, but the online landscape is vast and hard to navigate. How can retailers make their mark in the already crowded online world? How can they be connected to a platform where their items are seen and recognised?
Retailers who want to make an impact have all taken steps toward the online world. The next challenge they face is to connect with customers in a meaningful and successful way over all channels in a seamless experience.
What the customer wants
Customers want to have a single point of contact, where they can find all relevant fashion items, no matter where they are. Smartphones allow customers to be online most of the time, while approximately 90 percent of the fashion stock is still situated in local stores and shops. This creates a gap between the customer presence online, and the digital range of products.
Challenges for the retailer
The Zalando platform offers a new way to connect our brand partners and their own stock to new customers online. It will allow partners to directly plug into the platform to upload products and receive orders. How does this happen from a technical standpoint?
While the process behind Integrated Commerce sounds easy, its implementation requires a wide range of technological expertise, and confronts retailers and Zalando with major challenges. The first challenge is at the information level:
We need access to a store’s inventory to know what is available right now. After conducting research and initiating user studies, the biggest challenge we’ve identified is ensuring the accuracy of stock levels in real-time.In many cases, the inventory systems of brands and retailers are not online, while only a handful are using a digital inventory holdning system at all.
For these cases, we have to build indexing solutions without interfering with the retailer’s processes. There’s also the challenge of dealing with older, legacy systems, which are far from the technical standards required to be viable in an online market.
The next obstacle touches the content side. When we talk about content, we’re referring to specific information related to stock: descriptions, pictures, sizes, colours etc. If the retailer integrates products that are already available on Zalando, then there is no problem with the content – it is already there, digitalized on Zalando.
But what if it is not there yet?
While we may have a price and a unique barcode or identifier, we have no other content to push this stock online.Creating content can be a huge undertaking, thus we need to communicate effectively with retailers in order to create useful content for the customer out of the data layer of their stock systems.
Furthermore, once we offer a product from a stationary store online, another question arises:
How does Zalando connect the information from a potential customer wanting to buy or reserve a product back to the the retailer’s system?
How do we make sure that each system is connecting to one another, that the communication goes both ways?
Taking into account the variety of indexing systems among stores, we are also looking for different solutions in order to better serve retailers.
Let us think about the logistic concerns that connecting local stores to Zalando presents:
If a customer makes an order from a local store, somebody has to pack the parcel. This is not a problem for bigger stores with multiple employees and enough space, time, and packaging that is required to pack the parcel. But what about small stores that have one person standing at the counter?
We have been talking to many interested stores and this scenario is clearly an understandable concern. We’re constantly thinking about the manual process for stores behind Integrated Commerce.
What about the difference between accounting systems?
In store, as soon as a product is payed for and the customer leaves happy, the books are closed on the accounting of that product. For online purchases, this differs and comes in effect when a customer receives their parcel.
This could pose a problem for next day delivery, for example, where the retailer takes an item of their assortment, but the transaction technically occurs on the next day, when the customer receives the parcel. Difficulties could arise when the following day occurs in a different month or even year when dealing with accounting systems.
To reduce complexity, we have worked with our partner stores to offer same day delivery, which assures the books are accurate and keeps our customers satisfied.
Benefits for Brands and Partners
Becoming digital is no longer a question of if, but when. Together with brands and stationery stores we are working on solutions that will enable customers to have access to any fashion item they desire, anytime.
In the future, our partner brands will have the possibility to operate the technological components required to onboard products, define prices, quantities, and its location on our platform.
They will also be able to complete general order fulfilment, customer returns, and financial processes such as payments. This gives brands independence within the platform, rather than relying solely on Zalando to be integrated and individually positioned.
Supporting our partners on a technological level is important, with the main aim of making Zalando and our brands the go-to option for customers searching for fashion. Accessing every possible piece of stock for every potential customer is strengthened by building partnerships, and providing the technological landscape to make it happen.