ZALANDO PARTNERS WITH UNIBAIL-RODAMCO-WESTFIELD
©Zalando
Zalando continues to push its Connected Retail program and has signed its first partnership with a mall specialist. The mail-order company has signed an agreement with Unibail-Rodamco-Westfield (“URW”), which is Europe’s biggest mall owner after its acquisition of Westfield around three years ago.
Following the likes of Amazon, Alibaba and JD.com, Zalando’s moves is underlining the trend for "bricks and clicks" blurring the division between online and in-person sales, as well as the importance of having fully-integrated ERP system to manage the inventory. Alibaba has previously invested nearly USD 3 billion for a 36% stake in China hypermart operator Sun Art Retail, which looked like the Chinese e-commerce titan was copying a page from Amazon’s strategy plan, after Jeff Bezos’ company stunned U.S. supermarket operators by acquiring high-end grocer Whole Foods for more than USD 13 billion. "The partnership enables URW to connect to Europe's largest online fashion platform, reach new customers via Zalando and improve stock turnover for participating brands," says a URW statement. The cooperation has been in the planning stage for some time, but has now been swiftly brought to a conclusion due to the current considerable challenges for the stationary trade caused by the Corona crisis.
Zalando’s Connected Retail platform connects stationary retailers with the Zalando marketplace. If a customer orders a product online, the order can be forwarded to a connected retailer who has it in stock. The employees in the store or a local warehouse of the retailer take care of shipping. URW takes on the role of sales partner to the stationary retailers and is intended to support them in connecting to the platform. In return, URW receives a commission from Zalando.
Similar to the Farfetch or The RealReal, as well as Amazon Marketplace, business model, via the partner program, brands and retailers can integrate their own e-commerce stock into the Zalando marketplace. Once an order has been placed, the product is shipped directly from the partner to the end customer in accordance with Zalando’s delivery standards. “By connecting our partners’ stock to our platform, we widen our assortment in depth and width, and can offer better product availability for the consumer,” says Carsten Keller, Vice President Direct-to-Consumer.
Digitizing stock from these local stores and connecting their warehouse to the Zalando platform is one more step in creating the best customer experience by increasing product availability. In the long term, customers will be able to benefit from this approach through further services, such as location-based or same-day delivery. Leveraging technology, Lululemon sees inventory accuracy as foundational to their primary goal, delivering the optimum customer experience with their brand. By implementing an RFID solution, Lululemon has access to real-time, accurate inventory visibility and the ability to easily locate products, whether in-store or online. It also the company to streamline store operational processes.
Previous investments in RFID inventory tracking will enable the flexible e-commerce fulfillment model and allow Lululemon to proactively manage inventory trough this dramatic drop in consumer demand. "Our technology with the use of RFID we can access product at any point across our network," said CEO Calvin McDonald. "So it allows us to just regulate demand that we are seeing today." Given that the "assortment is less seasonal in nature as many of the core styles are relevant year-round and can be held for future use," the inventory has a longer shelf-life than anything seasonal or trend-dependent.
The orders the company does feel compelled to change will be easier than many competitors thanks to what McDonald called a "vertically integrated business model." Meaning the company works directly with manufacturers instead of working through several levels of intermediaries, as well as runs its own retail stores, which offers a different way of managing, especially in times of crisis like this. Between closely managing incoming inventory and using RFID-enabled visibility to optimize the inventory currently trapped in closed stores, McDonald said he expects to be "less dependent on the need to flush out inventory," which is key for Lululemon's luxury-like brand positioning, as off-price channel is not an option.