Last month, Berlin-based e-retailer Zalando closed a partnership deal with Adidas, making it the first international brand partner to join its platform, with stock from its Tauentzienstrasse store in the city, allowing same-day free delivery. We had the chance to sit down with Philipp Erler, SVP Technology at Zalando, to discuss his vision on the future of fashion & technology.
As Amazon now sells fashion goods, with the help of international influencers like Chiara Ferragni from The Blond Salad, and Premium same-day delivery service (and even 2h-delivery with their new Prime Now service), retailers have to capitalize on a seamless shopping experience if they want to keep their market shares in the long-term.
So merging online with offline is now one of their biggest challenges; and on this topic, we like the way Zalando imagined its new shopping experience: giving shoppers a single touchpoint where they can find all apparel items. With the long-term goal of establishing a network linking stock held in stores and warehouses for shoppers across Europe. The idea is based on a simple insight: customers are now mostly online, but stocks remain in local stores. Zalando‘s Berlin customers can now shop Adidas products on the retailer’s ZipCart app, with a delivery from the store on the same day between 7pm and 9pm, if the order is placed before 3pm.
Could you tell us more about your job, as Zalando SVP of Technology? What is your role in the company? And could you describe a typical day of work?
As SVP Technology at Zalando, I lead a team of more than 1,200 technologists within the company. I work in tandem with our senior leadership team to establish OKRs (Objectives and Key Results) for the technology team and set long-term goals for the department’s technological contributions to the company. I ensure that our technologists have the right tools, environment, and working methodologies to help grow Zalando to be Europe’s leading fashion platform.
How does data help taking decisions for a fashion business?
For Zalando, every piece of information we can gather is valuable, meaning data is integral to making informed business decisions. We have a wide range of data sets that we obtain information from, which offers us greater business value. Collecting and analysing data enables us to better react to change, and also contributes to our development of a deep understanding of our customer’s preferences.
By analysing the online behaviour of our customers, we can consistently deliver customised recommendations that are tailored to how our customers shop, giving them more of what they want. Data analysis is therefore all about making informed decisions, rather than participating in guesswork.
And why do you think it is important to have a mix of human + machine to use it well?
Customers shop at Zalando because they enjoy the act of shopping itself, as well as how Zalando frames the experience. Thus, it’s important to include the human element in the way we use data to better deliver this experience. While the sheer amount of data that machines can process is unparalleled in human terms, the comprehension of said data should be analysed by those who understand the insights that we’re trying to achieve.
Machines alone don’t have the capacity to know what type of information is valuable to Zalando, which is why our Data Scientists and Engineers spend their time analysing various data sets, be it click-through rates, average order value, product impressions, etc. It makes sense to leverage the benefits that machines provide us with data collection and comprehension. It is then our job to take this information and make it impactful for the business.
What do you think about AI and fashion, is it compatible? How could AI help fashion brands?
AI will have a big role to play in the future of fashion, with many avenues available to explore for companies like Zalando. We see great potential for online fashion stores to embrace AI in the form of virtual shopping assistants and chatbots.
Fashion brands will soon be turning to AI for the same reason we currently use data: gaining customer insights. It might not be feasible to connect with every potential customer if you’re a global brand, however AI gives us an option to help bridge that divide.
please tell us more about your working methodology, how do your teams keep being agile while being in a big company?
Zalando’s technology department has implemented an entirely new working methodology that has drastically improved our delivery time of features, on top of fostering a better tech culture internally overall. It’s called Radical Agility. Our developers work in autonomous teams, bound by organisational trust, and use the technologies they think will best fit the job, as well as the company as a whole. This all happens amongst team members without the restraints of a traditional, hierarchical management structure.
The implementation of Radical Agility has allowed us to speed up delivery time and improve on the quality of our features, which is best exemplified by the relaunch of our mobile Fashion Store app earlier this year. For a project that would normally take around six months, we were able to complete it in 66 days, with small sub-teams working in parallel to deliver the features required. Our feature cycles are now concentrated within four-six week intervals.
Finally, could you tell us what are the key principles a brand should keep in mind when it wants to innovate?
Innovation is intricately tied to customer experience, which means the success of your business is heavily reliant on your relationship with customers. To thrive over time, a brand must be in a constant state of flux, just like their customer’s tastes and preferences would be. But innovating is also about looking at the big picture and thinking ahead, creating solutions that customers never realised they required.
This involves creativity and the capacity to think big, which isn’t possible in your run of the mill office environment. Employees need to be given the space to be innovative, in order for your customers to reap the benefits. Employees should be trusted, have real responsibility, and feel valued. If you’re able to give your employees your trust, the possibilities for innovation are endless.
Post written by Noémie Balmat, Founding editor-in-chief
Interested in the future of fashion through innovation, Noémie Balmat has a valuable four-year experience in international advertising agencies and works with brands as a FashionTech consultant. Currently working for Soon Soon Soon as an Innovation consultant, she launched Clausette.cc in November 2014 to gather inspiring projects linking fashion & innovation in one place. Sensitive to the technological and scientific evolutions, Noémie often speaks at international events, such as the Hyères International Fashion Festival.