Amazon is a secondary technology company
Zalando plans delivery in 30 minutes
In order to be able to deliver within 30 minutes, Zalando has announced that it intends to work with local dealers in the future. The technical effort behind this is enormous and will require further investments at the expense of profitability.
At Zalando, board member Robert Gentz is currently pushing two major projects. The development from an online retailer to a technology company and same-day delivery within half an hour after receiving the order.
Company founder Gentz explains how the latter should work as follows: Instead of accessing stocks in a local regional warehouse, a close-knit network of local partner shops should be built up in the future. If the ordered items are in stock there, they will be shipped directly from there.
“The second step would be to make goods from connected local stores available to our customers. Then things can be delivered within half an hour. "
The transparent dealer
In order to actually develop this plan to series production, a gigantic technical feat is necessary. Because Zalando will have to track both the stock levels and the products presented in the showrooms in real time at the local dealers.
The project cannot be implemented without an immense investment in the necessary systems. The local dealers also have to go along with them and will be rewarded for this cooperation at an attractive rate.
For the local retailer, this means that they would have to lower their pants to Zalando and thus become a transparent retailer. Because by accessing a retailer's inventory, Zalando could pretty much determine the turnover rate down to the individual product and also the associated sales.
Delivery service instead of shipping
If this strategy is also successful in the mass market, many other financially strong traders will certainly try to use the system for themselves. Of course, this also means that the large shipping service providers such as DHL, Hermes or UPS would lose part of their sales.
Because a 30-minute delivery cannot be achieved on the dispatch route. This only works in the form of a delivery service. The established service providers will have to adjust to this if they want to earn money from this business.
Tech instead of trade
The fact is that online trading has been strongly technology-driven right from the start. Due to the rapid development in this area, the proportion and relevance of technical systems will continue to increase.
In order to be able to take advantage of a Vorsprung durch Technik, Zalando and many other big players are developing into technology companies. To this end, Zalando is opening a tech hub in Helsinki in which, among other things, mobile applications for fashion shopping are developed.
“80 percent of the time people spend on their smartphones is spent in apps. What does a fashion app look like that delivers the best consumer experience? That is one of the biggest tasks that we want to solve in Helsinki. "
Essentially, Zalando is setting out to translate the conceptual considerations developed in the recent past for the design of successful shopping apps into concrete applications. This includes, for example, location data, voice recognition or the use of the camera built into smartphones.
Zalando is taking a major strategic step into the future. It remains to be seen whether they will succeed in creating industry-wide global standards, as, for example, Amazon has done in parts.
The decision to redefine certain limits in online trading shows the entrepreneurial pioneering spirit and is certainly also due to economic success. Because one thing is clear: the future will cost Zalando a lot of money and investors a lot of patience. But if in the end the plan works and the profits start to bubble up, many will say: "They got it right"
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