Saturday, June 19

Zalando’s Latest Step in Race to Become World Leading Fashion Platform – WWD

European online fashion platform Zalando is launching a tool for apparel brands that sell via their site. Called “Brand Homes” it is, in effect, a way for a brand to set up a small, more curated site-within-a-site on Zalando’s platform.

The project can also be seen as Zalando’s latest step in the race to become the fashion retailing platform of choice in Europe.

The new program will work like this: North Face clothing, for example, is already sold on Zalando. Up until this week, when customers searched on the name they would usually get either a catalogue-style list of products or land on a fairly simple shopfront for the brand. Brand Homes takes the idea of a shopfront on the platform up a notch, explained Christoph Lütke Schelhowe, vice president for demand and customer acquisition and engagement, who oversaw the project at Zalando. The so-called brand homes will offer the opportunity for companies to showcase different kinds of visuals, as well as curate their own collections-for-sale as they wish, Lütke Schelhowe told WWD. Video will be included next and in the more distant future, it may even be possible to livestream events like launches or a runway show.

Behind the scenes, brand managers will do all this themselves via their own content management system. Perhaps more importantly, the new system, which is free of charge to use, will allow external users insight into Zalando’s customer data and analytics.

“Most of our shopping carts have more than one brand in them and brands are very interested to know how consumers discover them [on Zalando],” Lütke Schelhowe, who is based at Zalando’s Berlin headquarters, noted. “With this, they can see customer engagement — how often people were interested in certain products, how many times certain things were clicked on. And at the same time, Zalando can tailor the experience better to the customer.”

Forty brands piloted the project, which has been in development since 2019, including the likes of Calvin Klein, Puma, L’Oréal, Ugg, Pepe Jeans and Puma, among others.

Asked why they would put effort into a homepage on Zalando when they already had their own web site, Nadine Puka, responsible for trade marketing e-commerce at Puma, said, “Next to our own online shop, brand homes provide an excellent opportunity to connect with our consumer at a one-stop shopping location … we have already managed to build a strong presence and visibility on Zalando. [This] will elevate our game to the next level.”

This week another 150 brands were invited to join the program and Zalando’s eventual goal is to convince 800 brands, all of which currently have shopfronts on the platform, to move to the new format by the end of the year.

Zalando is certainly not the first platform to try this kind of thing. Since early 2019, Amazon has offered some registered sellers insights to their brand analytics; this was information sellers previously had to pay for. And Amazon’s newly launched invitation-only Luxury Stores app for mobile phones also allows high-end brands like Oscar de la Renta to control their own virtual stores, while at the same time leveraging Amazons’ logistics services and potentially winning over new customers.

Just as with Amazon, this move can be seen as Zalando’s answer to several big trends in online retailing.

Many of those trends are part of what industry analysts at management consultancy McKinsey describe as the “digital landgrab.” The phrase refers to the fact that the largest platforms — like Zalando, Amazon, Asos and others — are competing to become the platform of choice for both fashion consumers and producers. “The ‘holy grail’ of the industry will be integration of value-add services that remove friction in the consumer’s and supplier’s journey through effective use of data analytics at scale,” McKinsey analysts concluded.

There is also a race for platforms of all kinds — from fintech to fashion — to become more like social media, to evolve into online venues where users will simply hang out and browse, and in the process, discover new products and shop more.

Customers already spend around 80 minutes on Zalando every month on average, browsing around 150 different products. Zalando gets 430 million visits a month, and almost 80 percent of these are via mobile phone. By adding more content, the clothing brands and Zalando are increasing the entertainment and browsing potential.

“You need to think about different modes of interaction,” Lütke Schelhowe noted. “People could be hunting something specific or just browsing to see what’s new. Or they could just want to meet up with some friends and stroll around the city, window shopping. The question is how do we translate that window shopping kind of behavior into the digital world? Brand homes is one answer to that.”

In the end, both the platform and the brands will work with the resulting data to analyze users’ behavior and desires; the brands get access to the data of customers who might never have made it to their own proprietary web sites and Zalando earns extra insights, as customers react to the brand’s changing management of their own shopfront. These can then be used by Zalando to further personalize users’ shopping experiences and to potentially introduce them to other products — and, one assumes, brand homes — they might be interested in. “It’s a win-win,” Lütke Schelhowe said.

If successful, it could also eventually equal more income for Zalando: “In order to get extra visibility, brands will also be able to connect their brand homes to Zalando’s marketing services,” Lütke Schelhowe added.

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