Frictionless services tailored to fashion

Transcription

1 Convenience: Frictionless services tailored to fashion Capital Markets Day 2018 David Schröder Jan Bartels June 5, 2018

2 Table of Contents 1. Where we want to go 2. How we make it happen 2.1 Deep dive payments 2.2 Deep dive delivery 2.3 Deep dive returns 3. Q&A 2

3 Our mission is to offer our customers an unmatched level of convenience, tailored to fashion Customer centricity Sustainable growth Operational excellence 3

4 Zalando Convenience delivers five key services to our customers Transactional Core Payments Logistics Customer Care Cart Check-Out Return Flow Transaction Handling Payment processing Risk management & fraud prevention Receivables accounting Dunning & collection Warehouse logistics (inbound, storage, parcel outbound) Returns handling Transportation & shipping Network planning Mail & phone support Chat Social Media Self-help / Smart FAQ Warehouse engineering 4

5 Clear customer centricity focus leads to significant increase in customer satisfaction NPS +13 points (2014 to 2017) Payment Logistics Customer Care + 6 % + 7 % + 4 % CAGR 5 Note: Customer satisfaction in percent of customers evaluating service as 1 or 2 on a scale of 1 to 5 with 1 = very satisfied, 5 = not satisfied.

6 Accelerated capacity expansion in logistics enables business growth Logistics % Number of shipments in m 6 CAGR

7 Continuous improvement culture drives quality up Quality Costs + 3 % - 13% Contact rate in % of orders Adj. fulfillment costs per order in 7 CAGR

8 We have strongly invested into building our European logistics network to create a strategic asset Brieselang Start in 2011 STOCKHOLM (Brunna) Start in 2018 Erfurt Start in 2012 Szczecin (Gryfino) Start in 2017 Mönchengladbach Start in 2013 Lodz (Gluchow) Start in 2018 Lahr Start in 2016 Verona (Nogarole Rocca) Start in 2019 Paris (Moissy-Cramayel) Start in 2017 Milano (Stradella) Start in

9 and Zalando Fulfillment Solutions now enables our brand partners to directly benefit from our unique fashion logistics capabilities Enable partners internationally & ensure consistent customer experience 8 international warehouses 17 domestic carrier integrations, 2 express carrier, 14 same day destinations Economies of scale and unfair order economics 9

10 Table of Contents 1. Where we want to go 2. How we make it happen 2.1 Deep dive payments 2.2 Deep dive delivery 2.3 Deep dive returns 3. Q&A 10

11 Illustrative Payments, delivery and returns are the main friction points in today s customer journey Browse & shop Check-out & pay Await delivery Unpack & try on Return A C B 11

12 Considering payments, there are two leading satisfaction drivers that are of importance for our customers A 1 Payment options Local payment options to tailor to individual customer preferences 2 Ease of payment Frictionless Try now, pay later payment experience for our customers 12

13 Payment Ease of options payment We offer a broad range of payment methods to satisfy local customer preferences A Countries Payment Methods Deferred Payments INVOICE PREPAYMENT Our presence in 17 countries requires localization 22 different payment methods >60% deferred payment share 13

14 Payment Ease of options payment We recently turned every living room into a personal fitting room with try now, pay later A Traditional e-commerce customer flow New Zalando Pay Later experience 14 *One week to try at home and only the amount of the articles kept is captured on the card

15 Payment Ease of options payment Try now, pay later has led to rapid adoption and very high satisfaction among our French customers A ~35% Adoption Rate +3% Increase in Basket Size +9% +3% Retention Rate (existing customers) Retention Rate (new customers) A very strong NPS for Try Now, Pay Later 81% Customer would use this payment method again 96% The value proposition is appealing for our customers 93% 15

16 Payment Ease of options payment and more customers across Europe have the opportunity to enjoy it! A Try Now, Pay Later was launched in Italy and Denmark, and we are once again first movers in those countries. In addition invoice as a very popular deferred payment option is already live and widely used in eight more markets. 16 Invoice offered as a payment method

17 Considering delivery, there are three leading satisfaction drivers that are of importance for our customers B 1 Delivery options Premium delivery options to tailor to individual needs 2 On time delivery Precise delivery time prediction to increase reliability 3 Delivery time Expansion of our European network to increase speed 17

18 Delivery Ease Ease of options of payment We piloted and analysed premium delivery and see positive impact on loyalty and order behaviour B More loyal customers More valuable customers Lifetime value +25% NPS +13 Basket size +16% Return rate -2% 18 Customer satisfaction survey Berlin Customer insights analysis, top 3 customer segments

19 Delivery Ease Ease of options of payment We optimized it technology driven delivery platform B ORDER PLACED AT ZALANDO ZALANDO LOGISTICS CENTER LINE HAUL URBAN PARCEL HUB SAME DAY DELIVERY ON DEMAND DELIVERY NEXT DAY DELIVERY Asset free orchestrated via technology 19

20 Delivery Ease Ease of options of payment Now we are scaling it as part of our premium membership program Zalando Plus B Premium delivery for Zalando Plus 13 cities, more to come Hamburg Bremen Hannover Gelsenkirchen Brunswick Berlin Essen Dortmund Magdeburg Duisburg Bochum Leipzig Duesseldorf Dresden Cologne Bonn Aachen Frankfurt a.m. Mainz/ Wiesbaden Nuremberg Stuttgart Munich Network active Planned network 20

21 Delivery On Ease time options of delivery payment We are leveraging the power of AI for precise dynamic delivery promises for individual customer orders B From fixed window Italy (from Sicily to Milan) 2-5 working days for every order Me, Lu, Consegna standard Milan 1 day window Me, Consegna standard To personalized window Naples outskirts 2 day window Me, Gi, Consegna standard Sicily 4 day window (working days) Ve, Lu, Consegna standard 21 Enabled by AI

22 Delivery On Delivery time options delivery time We are building a truly European network to get closer to our customers and reduce delivery lead times B Achieved delivery speed increase Stockholm (Brunna) Start in 2017 Szczecin (Gryfino) Start in 2017 Italy -30% Mönchengladbach Start in 2013 Lahr Start in 2016 Brieselang Start in 2011 Lodz Start in 2018 Erfurt Start in 2012 France Effect on NPS Hub -21% Spoke Paris (Moissy-Cramayel) Start in 2017 Milan (Stradella) Start in 2016 Verona Start in 2019 Italy France Hub Spoke

23 Delivery On Delivery time options delivery time We continue to focus on warehouse automation to reduce lead time and costs B Generation III (testing) Generation II (live) Generation I (live) Conveyor, linesorter, outbound sorter Bag sorter Warehouse robotics <3 hours <1 hour <30 minutes 23

24 Considering returns, there are two leading satisfaction drivers that are of importance for our customers C 1 2 Ease of return Reimbursement time First mile convenience to make returns as easy as calling a cab Network optimization to speed up reimbursement time 24

25 Ease of of return payment We have come a long way C Free returns & 100 day return policy Easy return parcel Return label in parcel 25

26 Ease of of return payment and continue to innovate by offering home pick-ups within 15 minutes in major French metropolitan areas C min Click a button in your Zalando App Wait min and prepare your return Handover to driver at your door step pick-up record! 26

27 Ease Reimbursement of return time And we are also making reimbursement even faster C International return network Direct reimbursement

28 Illustrative Making complex things simple Browse & shop Check-out & pay Await delivery Unpack & try on Return A B C 28

29 At Zalando Convenience we are delivering frictionless services tailored to fashion to make our customers smile

30 D I S C L AI M E R Certain statements in this communication may constitute forward looking statements. These statements are based on assumptions that are believed to be reasonable at the time they are made, and are subject to significant risks and uncertainties. You should not rely on these forward-looking statements as predictions of future events and we undertake no obligation to update or revise these statements. Our actual results may differ materially and adversely from any forward-looking statements discussed in this presentation due to a number of factors, including without limitation, risks from macroeconomic developments, external fraud, inefficient processes at fulfillment centers, inaccurate personnel and capacity forecasts for fulfillment centers, hazardous material / conditions in production with regard to private labels, lack of innovation capabilities, inadequate data security, lack of market knowledge, risk of strike and changes in competition levels. 30