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Customer convenience and sustainability: David Schröder on the success of Zalando

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It’s no stretch to call Zalando’s origins humble. Founded in 2008 in a Berlin apartment, Zalando is now Europe’s biggest fashion retail site and the fastest company on the Continent ever to pass $1bn in annual revenue. Now the e-commerce giant has launched ‘My Returns’ a  feature which allows customers to return goods within 24 hours of delivery, using a one hour courier service. ‘My Returns’ is currently being trialled in London, and Retail Gazette spoke to Senior Vice President Operations, David Schröder to talk about it and Zalando’s other plans.

Zalando, originally known as ‘Ifansho’, was founded by university friends David Schneider and Robert Gentz. The pair started off selling sandals - a long stretch from the variety offered today. 

Like most e-tail success stories, the core of Zalando’s strategy is customer service. At the start, the ‘customer service line’ would connect directly to Schneider and Gentz’s phones. “Why do we care about customer centricity so much at Zalando? It’s our key priority,” says Schröder. “For us, it is the only way to ensure long term sustainable success for our company. Only happy customers will return.

We were the first online retailer in Germany to offer free deliveries for customers regardless of their purchase. Our model from the very beginning has had a huge focus on customer satisfaction and convenience, and this is something we want to strengthen,” he continued.

So what next? Zalando is piloting a number of services around Europe, but has chosen London to launch ‘My Returns’. Schröder predicts that it will be welcomed in the capital because busy Londoners are “in need of this kind of service.”

By using ‘My Returns’, customers will be able to have their parcels picked up “wherever they are”, without the need to go out of their way or “alter their daily routine.”

Despite competition from the likes of Amazon and Google, who are expanding their own repertoire of delivery and customer services, Schröder insists that revised innovations will help the online pureplay “keep on top of the game.”

For Zalando, the focus now will be on strengthening its core. As Schröder points out, “offline retailers remain stronger than us” although he insisted that as traditional retailers make the move online, Zalando has “a strong combination which puts us in a good position in this competition.”

One of the reasons for that is the business’s heavy focus on technology which Schröder insists is an important part of customer satisfaction. The “experience on the app and website is as important as delivery or returns.”

In the current market investing in mobile e-commerce is crucial, something the 33-year old German agrees with. “Customers are increasingly using mobile channels. In London we are approaching 60% of visits being mobile traffic.” As such, “having a great mobile sight and great apps is an absolute necessity.”

But going back to customer service, which Schröder maintains as the constant topic of conversation, Zalando’s own research outlines that almost all customer queries can be resolved with the first point of contact.

“We’ve tried to increase the interaction of all employees with customers. Just recently we launched a program where employees can sit next to customer care agents for a few hours: they listen to live calls, get live customer feedback – we see it as very important to hear the voice of the customer and not look solely at data.

There are also schemes where employees take part in deliveries, and even spend time working on logistics so they can understand each stage of the delivery experience,” Schröder explains.

Despite their growing success, Schröder told Retail Gazette that Zalando has no immediate plans to expand overseas. “Our focus is very much in Europe, (our growth rate is very high), we still have work to do to drive customer satisfaction and manage the growth.”

This is demonstrated in the expansion of Zalando’s logistics network, which currently includes three distribution sites. Zalando is in the process of adding a fourth in South-West Germany, and is also experimenting with “smaller regional warehouses” that will not only help them reach customers faster, but will also ease the utilisation of local retailers: a key factor of delivering people what they want, based on where they are.

Zalando already has partnerships with British high street brands such as Wallis and Miss Selfridge, which are becoming increasingly popular both abroad and at home. “We see potential in combining the strength of local retailers with the strength we have as an online retailer,” explains Schröder.

This goes hand in hand with the e-tailer’s personalisation.

“Fashion should be more like a democracy than a dictatorship. Sometimes high class fashion magazines feel like a ‘fashion pope’ telling people what to wear. We like to help people wear what they want and bring out the best in them,” he adds.

With features like online fashion advisors on the horizon, there is still a lot to look forward to with Zalando – very much the retailer for the non-elites of fashion. 

Published on Thursday 17 September by Philip Gallagher

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