Delivery a Battleground for Fashion Ecommerce in Europe

Zalando stressing convenience against Otto's price play

Author: Cliff Annicelli

September 11, 2017

European pure play fashion ecommerce retailer Zalando has begun offering one-hour delivery slots bookable up to 10 days out for buyers in Berlin—the latest convenience-focused order fulfilment option tested by the company in its various markets this year as it looks to keep pace with regional leader Otto.

The Berlin effort is facilitated by bicycle-based delivery service Hoard. It follows a similar program the retailer launched in May in Brussels, Antwerp and Ghent in Belgium with local bike-based startup delivery service app Parcify.

The Parcify program is notable for allowing customers to change their delivery time and address to an alternative location within the general delivery area on short notice, with couriers then homing in on the customer via the geolocation data on the recipient's smartphone.

"Our customers want speed and flexibility when it comes to the delivery of their parcels," said Jan Bartels, Zalando's vice president of logistics products. "They want to have some say over when the parcel is delivered instead of the parcel dictating their lives."

Zalando's programs with Hoard and Parcify look to tap into the generally large segment of the ecommerce market for whom delivery options have been a deciding factor when making digital purchases.

In a September 2016 survey by MetaPack of ecommerce buyers in several of the more than a dozen countries in Western Europe where Zalando has a localized digital presence, majorities of respondents agreed additional delivery options had swayed them toward a retailer.

What's more, for some ecommerce shoppers, more flexible fulfilment options trump the lure of lower shipping prices. An August 2016 study by Tryzens found that was the case in the UK—one of Zalando's many markets—with the largest share of digital buyers polled there saying anytime delivery to a home or work location was their largest consideration when choosing a delivery method, and delivery to those locations at a set time ranked a close third behind seeking the cheapest option.

The UK isn't the only market where the cheapest delivery option isn't always immediately best. In July, Zalando rolled out an Amazon Prime-like loyalty program, Zalando Zet, that offers premium services like faster delivery and same-day pickup of returns for a monthly fee to shoppers in several cities in Germany.

However, one of Zalando's largest competitors, Otto Group, is putting that convenience-beats-price attitude to the test. Earlier this month, Otto—the only player with a larger share of fashion-related ecommerce sales in Europe than Zalando in 2016, according to Euromonitor data cited by Bloomberg—began offering free next-day delivery in most of its home country for orders placed before 8 pm, according to a report by Ecommerce News Europe citing German marketing industry news site OneToOne.

Photo by Viktor Kern on Unsplash