BERLIN: Amazon is making inroads in Europe, having signed up more than 350 brands in the past year, but German rival Zalando is fighting back by growing its already extensive partnership initiative.
Zalando, which has grown into an online fashion giant since its formation in 2008, sells around 2,000 brands across 15 European countries, but its partnerships with about 700 brands has been an important source of revenue.
These partnership brands currently account for nearly 10% of the total value of goods sold on its site, but the retailer plans to increase this to between 20% and 30% in the long-term.
Carsten Keller, Zalando’s Managing Director of Partner Solutions, told Reuters in an interview that the partnership scheme also helps to cement relationships with brands, some of whom have reservations about listing on Amazon.
“The brands are put in the front seat. They keep control over the assortment, prices and brand representation,” she said. “It is a very different environment to other market places like eBay or Amazon.”
Zalando’s partnership charges brands a commission for selling on its site, but allows them full control of pricing, presentation and stock.
And similar to Chinese e-commerce giant Alibaba, the company also offers its partners valuable data about consumer purchasing habits, as well as support with marketing, online content, logistics and inventory management.
“In an Amazon or eBay environment, brands lose contact with their consumers because they do not get their hands on consumer data,” Keller said.
Nike is just one leading fashion and apparel brand that has found the arrangement mutually beneficial. “Our partnership with Zalando is creating growth and shaping the digital marketplace in and beyond Europe,” said Elliot Hill, head of Nike’s wholesale and direct-to-consumer businesses.
Exactly how Zalando leverages data as a service for its partners was the subject of a talk given by the company’s head of consumer insights at the recent MRMW Europe conference in Berlin.
Martin Schmidt informed delegates that Zalando has built a two-tier business model around data – one element is a self-service web interface while the other is other is a project-based consultancy service.
“All this [data] helps us to generate insights which then lead to recommendations for specific actions for our brand partners,” he said.
Sourced from Reuters; additional content by WARC staff