Company:Zalando

Zalando now offers an online selection of over 150,000

types of clothing products and shoes for women, men, and

children as well as accessories and sports gear. This range of

offerings includes everything from well-known trend brands

to hot designer labels. Zalando works with over 1,500 brand

manufacturers. Robert Gentz and David Schneider founded

the Berlin-based company in 2008 and are already servicing

15 European markets. To sum it up, the company has gone

from nothing to 1.8 billion EUR in sales in just five years.

Yet the company’s sense for e-business and fashion trends is just one of its

many facets. Behind the scenes, high-powered technology is also responsible

for the company’s success: the “Zalando Technology” department is one

of the business’s core divisions with over 400 employees in the areas of

product management, engineering, and quality assurance. In addition to the

shop platform, the team also develops the entire IT platform, the interfaces

to the individual specialty departments such as purchasing and content

creation, as well as the whole logistics system. The team also happens to do a

considerable amount of this work on its own.

Where it makes sense, professional, experienced service providers are

selectively brought in as strong partners. Zalando significantly benefits

from their expertise and experience in further developing the company.

One such partner is the business analytics service provider MicroStrategy,

whose solution is being implemented at Zalando as a BI front end.

A detailed look at the company’s processes makes it clear just how

important an analytical tool is for Zalando. Zalando’s customers can choose

from multiple payment methods such as by invoice, by advance payment,

or by credit card. They are also given a live tracking option to follow their

order, which in many cases is sent out from the logistics center the very

same day. Not only are there no shipping costs, but the Internet shop is also

famous for its free returns.

As one might imagine, this all produces large volumes of data – both

from customer transactions as well as through communications with

logistics partners. Zalando also wants to maintain an overview of its

inventory and suppliers, as well as keep track of its customer relationships

as a whole. For this purpose, the fashion company generates analyses

and reports, such as on sold items and return rates. “We are always

scrutinizing our processes, measuring our success and efficiency

CUSTOMER SUCCESS STORY: RETAIL

based on the value-added chain, and constantly improving as a result.

Accordingly, business intelligence is pivotal and crucial for Zalando since

it is one of the key tools,” says Eric von Czapiewski, Head of Business

Intelligence at Zalando. This begins with a comprehensive, high-quality

database and extends through to high-performance end applications

and fast analysis processes. “This way we make it possible for Zalando

to reach the next steps in its development and uncover optimization

potential along the way,” von Czapiewski continues.

While these processes are now perfect, getting them that way was a rough

journey. One challenge was the subsequent modification of already existing

reporting processes in the specialty departments and integrating reporting

and BI solutions into the Internet retailer’s operational processes. Much of

this was difficult to comprehend in the follow-up phase, which made it

accordingly complicated. Ultimately, however, the system has very good

interactive capabilities for users and gives specialty departments the option

to quickly integrate their own data into reporting solutions.

The process for introducing the BI solution was divided into three large

phases. In the first phase, the Zalando team documented the central

requirements and analyzed the business processes that were to be

supported. In the second phase, the core elements of the metadata were

developed and minor changes were made to the underlying data model.

In the third phase, the metadata were further expanded in short iterations in

collaboration with the specialty division. The teams additionally generated

reports and dashboards and gradually expanded them while also verifying

the correctness of their content and reviewing their technical efficiency.

Although it was very complex and required additional time and effort

alongside everyday business activities, the project went smoothly.

The overarching goal of introducing the BI solution was to give the specialty

departments a faster decision-making process. “This was to be done by

reducing the number of manual work steps, providing simpler access to

relevant data, and creating easier, data-supported coordination processes

with neighboring specialty departments,” Eric von Czapiewski says. The BI

team made this possible by involving the specialty departments early on

and by working closely together during the entire duration of the project.

The result is that the fashion retailer can now adapt its product range ad hoc

to customer preferences thanks to analytical BI, optimize revenue streams,

and identify future sources of revenue even faster. Zalando is thus “à la

mode” – not only for its customers, but also in-house by getting the most

benefits out of its use of technology.

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