DR. CARSTEN KELLER: HOW PLATFORMS FUEL THE HIGH ST.
(Zalando’s Dr. Carsten Keller speaking at Retail Without Borders 2019.)
The Retail Without Borders 2019 summit saw some of the worlds largest marketplaces and retailers come together in London to discuss the state of retail on a global scale. The Smartzer team were lucky to catch Zalando’s Vice President of Direct to Consumer, Dr Carsten Keller as he kicked off the day with his talk on how online platforms are actually fuelling the high st.
Dr. Keller opened with the fascinating case study of John Mcpheters’ sneaker store Stadium Goods. Last year the sneaker company only had one store and yet it was selling over 40 million shoes. How you may ask? Stadium Sneakers also sells on some of the worlds biggest online marketplaces, and it sells a lot. Having snapped up by $250m to Farfetch last year, Sneaker Stadium is a great example of the power of mastering online in an evermore interconnected landscape.
ONLINE TO OFFLINE (O2O)
Tmall and Alibaba were also pulled upon as great examples of how to navigate online and offline retail effectively. In China, they have created a new ecosystem of connected ‘offline’ stores that sell on their platforms. Leveraging offline in partnership with online is part of the reason why Tmall and Alibaba have built such vast businesses. Keller also pointed out that the ‘offline’ retail landscape in Europe is not also a healthy one with 35,000 stores closing since 2008, which inevitably has raised a few eyebrows.
In particular, Fashion is positioned in Europe with 88% of sales coming through offline. Therefore, it could potentially be at risk to the growing online landscape. Furthermore, one of the big problems online Fashion is availability, with an estimated 8.6 million people per quarter unable to find the item they want online in 2018. The combination of established bricks and mortar and growing demand for online availability in fashion has really fuelled Zalando’s solution of ‘Connected Retail’.
Zalando’s Connected Retail solution realises that through connecting with physical stores you gain access to the biggest warehouse on earth. By integrating their system with stores, items can be shipped/collected/returned in store, thus creating a much more efficient and localised way of online shopping for customers. Stores majorly benefit not only from increased revenue but also from footfall and consumer data. Keller described it as a ‘3x win’ as Customers, Stores and Zalando all can make serious gains. With 700+ Stores connected to Zalando in 2018 it truly is a business model fit for online and offline retail.
(Cartoonist impression of the talk.)