Why It’s Not About Saving Stationary Trade with Companies Like Amazon and Zalando

Screen: Zalando Recap & Business Outlook 2014

What makes Zalando so exciting? That they keep finding and inspiring investors without ever showing any profit? No. It is exciting to see how they have developed a feel for the internet which you rarely find outside of the usual US digital giants.

The Power of the Platform

Zalando has understood that in the future, having a platform will be decisive. Infrastructure, not traders will be a big topic. In the face of the digital changeover, who wants to lay all their eggs in one basket?

The principle of access rather than ownership also plays a role here. After all, the biggest market hype is currently happening on platforms which don’t offer products or services themselves – they only mediate these. The world’s biggest room broker, AirBnB, owns as many hotels as the largest taxi company, Uber, owns cars.

It’s not about saving stationary trade

Screen: Amazon Fresh is already cooperating with local businesses

Those who automatically think of saving stationary trade when they hear things like “Amazon opens grocery market” are following the wrong train of thought. In contrast to eBay, which actually understands itself as a partner to individual traders, companies like Google, Amazon or Zalando use the infrastructure which is already there. If it happens to be about stationary trade or shop-like concepts, this has nothing to do with recycling old business models.

For instance, Amazon’s “grocery market” is no normal shop, but is full of pick-up scenarios. Apart from that, their locations close to the city provide the basis for fast delivery and so function more like warehouses than stores.

Zalando brokers fashion, including via retail stores

Europe’s largest fashion shipper is now working on applying this way of thinking to the online fashion trade. They have been opening themselves to external traders since 2011. In spring 2015, they opened up to developers.

In the future, they want to focus even more strongly on external partners, which also include stationary traders. Stephan Meixner sketched out Zalando’s platform strategy on neuhandeln.de recently:

» In practice, it should work like this: a customer contacts Zalando service because they noticed a nice handbag on the facebook fan page of a celebrity. The support staff member looks to see if Zalando currently has that bag in stock. If the article is out of stock for instance, Zalando wants to give the customer the name of an alternative trader where they can purchase the bag. Zalando for instance, could recommend the business of such traders which are close to the customer and can be reached quickly.

If the customer requires the product immediately, Zalando wants to even deliver the desired product via express courier to the customer’s house in just a few minutes. «

They want to realise this vision by 2020.

Product selection has already occurred online. Now it’s about access

So it’s not about Zalando showing everyone how to set up a stationary store in 2015, but getting the desired product to the customer.

In a typical online driven purchasing processes, the customer has normally already made this decision before they select the “procurement channel”. From that point on it is only about getting the product.

The selection made when actually purchasing a product is often the fastest and cheapest trader. Or will it be the closest one in the future?

Within this way of thinking, stationary trade is no longer the focal point, but (as is often said about online shops) is just a channel. E-Commerce and stationary retail shops still work together in some conditions.

This rather kitschy video by Oasis Fashion provides a good summary of this way of thinking:

» At Oasis, when we’ve sold out online, our Seek & Send service searches high and low to ensure we find what you want, even if that means sending it from one of our stores. «

How long it will take for enough traders to build-up proper omnichannel warehousing is a question for another day.

In any case, the shop landscape of the future will not necessarily be an inspiration landscape, as some “Future Store” initiatives would like to make you believe, but the tough and thorough fulfilment of customers’ desires.

A shop becomes a quick pick-up point, city warehouse or mini-shipping centre. The online thinker decides on the direction stationary trade will take in the future.

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